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
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.