State Revenue Estimates Revised Up

Jan 12, 2024

by Liz Gullett

As MLC’s Communications and Social Media Manager, Liz Gullett keeps clients informed and up-to-date on the goings on in Lansing and the Capitol.

Today, the directors of the House and Senate Fiscal Agencies came together with State Treasurer Rachael Eubanks and State Budget Director Jen Flood to reach a consensus for projected state revenue for the upcoming fiscal year. At the biannual Consensus Revenue Estimating Conference (CREC) the principals heard testimony from various economic experts on the key aspects of the state and national economies that will impact state revenue.

For FY 2024, the agreed upon Net General Fund-General Purpose (GF-GP) revenue is projected to be $13,597.4 million, which is $359.1 million more than the May 2023 estimate but is a decline of 2.6% from the current year budget. The School Aid Fund (SAF) revenue is projected to be $17,946.9 million, which is $58.8 million more than the prior estimate and a small growth of 0.5% above the current year budget. In FY 2025, the GF-GP revenue should grow 3.1% to $14,022.2 million and the SAF revenue is projected to grow 2.0%, which is $41.1 million higher than the prior estimate.

National

    • Real GDP growth will slow due to slowing consumption.
    • The market for existing homes should remain tight, leading to growth in the market share of new construction.
    • Existing housing will likely remain unaffordable as compared to 2010 levels.
    • Manufacturing is shrinking, which is causing some concern.
    • The chance of a recession is low.
    • The unemployment rate is projected to rise to around 4.2% at the end of 2024, after which it should edge down below 4% by the second half of 2026.
    • Mortgage rates should decline to 5.5% by the end of 2026.

Michigan

    • Labor demand is cooling off.
    • Payroll employment is projected to grow at a moderate pace and should be above the pre-pandemic level by mid-2024.
    • The fastest job growth will be in white-collar industries.
    • The unemployment rate is estimated to rise to 4.5% in the first half of 2024, and then will slowly inch down through 2026.
    • GDP is expected to continue growing at trend rates.
    • General Fund-General Purpose revenue is down from historic numbers, but collections remain strong on a nominal basis.
    • The School Aid Fund is projected to grow through the next three years.

Risks to the economic forecast include a number of items, such as a shift in the economic momentum, future monetary policy, inflation, commercial real estate, and geopolitical situations. In Michigan, experts will keep a close eye on changes to consumption levels and inflation, the sunsetting of provisions within the Federal Tax Cuts and Jobs Acts, and state-level economic development tax incentives and their impact on reduced revenue in the future.

The House, Senate, and administration will use the agreed-upon numbers as they begin drafting the state budget for the upcoming 2024-2025 Fiscal Year. The next step in the process occurs when Governor Gretchen Whitmer presents her budget recommendations to the legislature next month, followed by the Appropriations Subcommittees beginning to meet on the budgets under their purview.

To read the full consensus report, please click here.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.

Recent Posts

Minimum Wage Increase Schedule

Minimum Wage Increase Schedule

The Michigan Department of Labor and Economic Opportunity released the schedule of increases to the state’s minimum wage. The information is in accordance with the recent Michigan Supreme Court ruling regarding the Improved Workforce Opportunity Wage Act. Effective...

Supreme Court Kicking Off New Term

Supreme Court Kicking Off New Term

The Michigan Supreme Court is set to begin the 2024 – 2025 session by hearing oral arguments in eleven cases next week. Key Points: The Court will hear arguments on October 9 and 10, beginning at 9:30 a.m. on both days. Continuing a longtime tradition, the first case...

Expungement Streamline Proposal Announced

Expungement Streamline Proposal Announced

A bipartisan plan to reform issues within Michigan’s Clean Slate expungement process was announced. The Clean Slate legislation was signed into law in 2020 and expanded expungement eligibility. Under that law, a person must not have an additional conviction in the...

Looking for older articles?

We’ve recently made improvements to our blog to provide a better user experience. If you’re searching for older posts, click here to search our archive.

Michigan Legislative Consultants
110 W. Michigan Avenue
Suite 500
Lansing, MI 48933
517.372.2560
517.372.0130 fax

1001 Woodward Avenue
Suite 500
Detroit, MI 48226

MLC is proud to be the Michigan member of NASL