LANSING, MI – State Treasurer Kevin Clinton, State Budget Director John Roberts, Senate Fiscal Agency Director Ellen Jeffries, and House Fiscal Agency Director Mary Ann Cleary on January 16th, 2015 reached a consensus on economic and revenue figures for the remainder of Fiscal Year (FY) 2015, and for the 2016 and 2017 Fiscal Years.
Net FY 2015 General Fund-General Purpose (GF-GP) revenue is projected at $9.501 billion, down $325 million from estimates agreed to at the May 2014 revenue conference. Net FY ’15 School Aid Fund (SAF) revenue is now estimated at $11.889 billion, up $36 million from May. Combined, GF and SAF estimates are down $289 million for FY ’15.
“Economic activity in Michigan continues to be strong, with employment growth continuing and vehicle production and sales remaining positive, but current and future year revenue estimates are being significantly impacted by outstanding Michigan Business Tax credits,” said State Treasurer Kevin Clinton. “The credits, many of which were awarded as much as a decade ago, have been a serious risk over the last few revenue estimating cycles, but have now turned to reality.”
Moving into the 2016 Fiscal Year which begins October 1st, GF-GP revenue is forecasted at $9.713 billion, down $532 million from estimates last May, again primarily due to outstanding MBT credits. Fiscal Year ‘15 SAF revenue estimates have been revised up $6 million to $12.264 billion.
In FY 2017, GF-GP revenue is estimated at $10.001 billion with SAF revenue estimated at $12.641 billion. These are initial revenue estimates for FY 2017.
“While today’s revenue projections present new challenges for the budget, the news about Michigan’s economy in the coming years remains very positive,” said Budget Director John Roberts. “We will continue to work from the same sound financial principles and investment strategies that have been so instrumental to our state’s strong comeback.”
Roberts adds that he looks forward to working with the Legislature to ensure the current year budget remains balanced and fiscally-responsible.
There are positive and negative risks associated with today’s economic and revenue estimates, including weaker world economic growth, stronger housing activity, and a jump in oil and gasoline prices.