May 15 Michigan officials on Wednesday raised their revenue estimate for the current fiscal year by $483 million, citing an improving state economy.
General fund revenue for the fiscal year that began Oct. 1 is projected at nearly $9.2 billion, up $397 million from a forecast in January. School aid fund revenue is expected to climb $86 million to $11.21 billion from the previous forecast.
"Michigan's economy continues to improve and is currently experiencing its third straight year of renewed employment growth," said State Treasurer Andy Dillon in a statement.
He added that continued growth is expected in vehicle sales - a staple for Michigan's automotive-dominated economy - and housing starts.
However, state officials warned that risks loom, including federal fiscal woes, higher oil and gas prices in the future and the European sovereign debt crisis.
Some Democratic state lawmakers called for using the extra revenue to increase school funding or help cash-poor cities pay for police and fire protection. About $200 million of the higher estimate is one-time revenue caused by taxpayers accelerating capital gains in 2012 to avoid potentially higher federal income taxes in 2013, according to Terry Stanton, a spokesman for the Michigan Treasury Department.
For fiscal 2014, the new forecast pegged general fund revenue at $9.44 billion, up $182 million from the January estimate. School aid fund revenue in the upcoming year was projected to be $38 million higher at $11.47 billion.
Credit rating agencies have noted Michigan's improved finances with Fitch Ratings upgrading the state to AA from AA-minus last month, while both Standard & Poor's Ratings Services and Moody's Investors Service revised the state's rating outlook to positive from stable.