Legislators will have roughly $1.5 billion less revenue to appropriate during the budget process for the 2024 Fiscal year. Principals from the House and Senate Fiscal Agencies and administration met for the biannual Consensus Revenue Estimating Conference. After hearing from experts, and utilizing the most up-to-date revenue figures, they came to an agreement on the various revenue numbers for upcoming fiscal years.
The two key revenue fund projections were changed from January’s numbers. Revenue earmarked for the General Fund is estimated to be $1.85 billion less than previous projections, while School Aid Fund revenue was increased by $42 million. The largest driver behind the revisions is the reduced income tax rate and changes made to retirement taxes and the Earned Income Tax Credit.
- General Fund dollars for the current fiscal year were lowered by $989 million, while School Aid Fund dollars were increased by $105 million.
- This year, Michigan will recover all jobs lost during the pandemic.
- Michigan’s unemployment rate should remain steady this year, increase to 4.5% next year, and turn back down to 4% by the end of 2025.
- Inflation should reach 3% by 2025.
- Individual income tax collections last month fell short of their target by $450 million.
- No pay-ins or pay-outs to the Budget Stabilization Fund are projected through the next three years.
- The House Fiscal Agency and Department of Treasury project a recession, however, the Senate Fiscal Agency does not.
The agreed upon revenue numbers will be used to finalize the state budget for the upcoming fiscal year, which begins on October 1.
To read the Consensus Revenue Agreement, please click here.