Michigan lowers revenue projections for FY 2014, 2015
May 15 (Reuters) - Michigan officials lowered their revenue forecast for the current and next fiscal year by $617 million on Thursday, citing weaker income tax collections among other factors.
State Treasurer Kevin Clinton, State Budget Director John Roberts, Senate Fiscal Agency Director Ellen Jeffries, and House Fiscal Agency Director Mary Ann Cleary agreed to drop fiscal 2014 general fund revenue projections by $253 million to $9.319 billion, and school aid fund revenue by $64 million to $11.496 billion, from estimates made in January.
"Individual income tax annual payments have been weaker than what was projected in January, primarily as a result of pending federal tax policy changes and the so-called, 'fiscal cliff' in late 2012," Clinton said in a statement.
Other factors cited by the officials included newly enacted policy changes to some tax collection procedures and the severe winter weather.
For fiscal 2015, which begins Oct. 1, general fund revenue was pegged at $9.826 billion, down $221 million from the January estimate, while school aid fund revenue was revised down $79 million to $11.853 billion.
Still, the officials noted that total revenue is expected to grow by more than $800 million in both fiscal years.
"While the numbers change, the key point is that we are continuing to see a budget surplus, which comes from our improving economy, as well as responsible financial management," said Republican House Speaker Jase Bolger in a statement.
Ari Adler, Bolger's spokesman, said the lower forecast would not impact a proposal to allocate state funds for Detroit's plan to adjust $18 billion of debt and exit the biggest municipal bankruptcy in U.S. history.
A package of bills introduced in the House last week would authorize nearly $195 million from Michigan's rainy day fund for the state's share of a $816 million so-called grand bargain, which would ease pension cuts for Detroit retirees as a result of the city's bankruptcy and save city-owned art works from being sold to pay Detroit creditors. (Reporting by Karen Pierog; Editing by Tom Brown)