Updates About Revenue Reports

In September, the state’s major tax revenues and net lottery earnings reached $3.7 billion, marking a 1.7% increase over September 2023 and exceeding the Senate Fiscal Agency projections by $106.1 million. The General Fund saw tax collections surpassing projections by $165 million, while School Aid Fund collections fell $60 million short of expectations. Overall, fiscal year-to-date revenue for the General Fund stands $475.4 million above forecasts, and the School Aid Fund is $66.7 million over target.

¶Key Highlights:

• Individual Income Tax: Up 20.2% year-over-year, with record breaking withholding collections at 20.6% above last year.
• Corporate Income Tax (CIT): Surpassed predictions by $42.2 million, despite a 7.8% year-over-year decline.
• Sales and Use Taxes: Sales tax dropped 5.1% from last year, falling $4.7 million below the forecast, while use tax grew 11.6% but remained $8 million below predictions.
• State Education Tax (SET): Down 18.6% year-over-year and $86.2 million under predictions.

Overall, Michigan is showing strong fiscal performance driven by higher-than-expected income and corporate tax collections, with some under-performances in education-related revenues and lottery earnings.

The House Fiscal Agency’s (HFA) August revenue report indicates that both Michigan’s General Fund and School Aid Fund revenues are exceeding earlier projections from the May Consensus Revenue Estimating Conference.

General Fund revenues reached an estimated $1.15 billion in August, $12.1 million higher than previous forecasts, with year-to-date revenues increasing by $319 million. Similarly, the School Aid Fund brought in $1.4 billion, surpassing projections by $59 million, and showing a $128.4 million year-to-date increase compared to the previous fiscal year.

The recent November Revenue Report released by the Senate Fiscal Agency (SFA), revealed that Michigan’s General Fund and School Aid Fund tax collections fell short of the projections outlined in the May 2023 Consensus Revenue Estimating Conference (CREC). The General Fund taxes were reportedly $25.9 million below the estimated figures, while the School Aid Fund collections lagged by $41.6 million compared to the forecasts.

This shortfall was attributed to lower-than-expected sales tax collections and individual income tax withholding. Despite this, the report noted higher revenues in lottery revenue, use tax collections, and net Michigan Business Tax collections. Overall, the data shows a deficit in revenues for November compared to previously forecasted levels.