Fri, Jan 14, 2022 2:08 PM
By Scott McClallen | The Center Square, The Center Square
(The Center Square) – State leaders announced a consensus on revised revenue figures that show $1.7 billion more than estimated in May 2021 for the remainder of Fiscal Year (FY) 2022.
The revenue forecast for the General Fund and School Aid Fund combined was:
FY2022: $27.5 billion, a $1.72 billion swing from the May 2021 estimate.FY 2023: $29.1 billion, a $1.4 billion swing from the May 2021 estimate.FY 2024: $29.8 billion.
“Revenue growth continues to be strong as the economy recovers,” State Treasurer Rachael Eubanks said in a statement. “We are also still seeing the positive impacts of the federal stimulus programs. We expect growth rates to return to more typical levels as the support of the stimulus fades.”
Revenue estimates are updated using forecast models to predict revenue changes over time.
“Michiganders can be excited about the economic picture that was presented today and about the revenues we have available to us to build the budget, especially when you consider it was just under two years ago when the revenue estimates did not look good during those early days of the pandemic," State Budget Director Christopher Harkins said in a statement. "I do want to remind everyone, however, that much of this revenue is one-time in nature and should be used for one-time investments that keep our budget in balance for the long term. I am remaining mindful of the fact that revenues can still fluctuate and change quickly during a pandemic."
FY 2022 spans from Oct. 1, 2021, to Sept. 30, 2022, while FY 2023 spans from Oct. 1, 2022, to Sept. 30, 2023. FY 2024 begins on Oct. 1, 2023.
The state is also sitting on billions of federal COVID-19 funds.
House Appropriations Chair Rep. Thomas Albert, R-Lowell, welcomed the news but warned against creating “ongoing costs that could be difficult to sustain within Michigan’s year-to-year state budget.”
“Revenue projections continue to exceed previous expectations, but it does not eliminate the need to be cautious and smart about how the state invests taxpayer money,” Albert said in a statement. “Year-over-year inflation rose by 7 percent in December, the fastest rate of growth in nearly 40 years. I’m worried that federal government policies, supply chain issues and labor force shortages might exacerbate that trend. It’s unsustainable and could cause serious problems for our economy, so we must be prepared for potential consequences.”
More information about the forecast is here.