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Unpacking the Consensus Revenue Estimating Conference

In Michigan, state revenues continue to exceed previous estimates. The Consensus Revenue Estimating Conference held a few weeks ago provided an update to the revenue forecast as the Legislature is considering the proposed 2022-23 fiscal budget. 

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In Michigan, state revenues continue to exceed previous estimates. The Consensus Revenue Estimating Conference (CREC) held a few weeks ago provided an update to the revenue forecast as the Legislature is considering the proposed 2022-23 fiscal budget. 

Since the January CREC, revenues have risen by $2.99 billion for the current 2021-22 fiscal year and $2.03 billion for the upcoming 2022-2023 fiscal year. According to the Senate Fiscal Agency, Michigan saw the most revenue ever from sales and use taxes, applied to purchases made outside one's state of residence, in April 2022. 

According to the Senate Fiscal Agency, income tax revenues and business taxes were both higher than expected. Policymakers will work to determine how to spend the excess money from the unexpected growth. 

Governor Gretchen Whitmer has proposed tax cuts of nearly $800 million by repealing taxes on retirement income and boosting the Michigan Earned Income Tax Credit (EITC).  

Last month, the Michigan State Legislature passed bills that would reduce revenues by nearly $2.7 billion which if enacted would:

•    Reduce the individual income tax rate from 4.25% to 4%.

•    Increase the personal exemption by $1,800

•    Increase the EITC from 6% to 20%. 

•    Increase the amount of income certain seniors can deduct. 

•    Eliminate the property tax exemption for certain veterans who are disabled and replace it with an income tax credit.

•    Allow taxpayers to claim a $500 nonrefundable tax credit for qualified dependents. 

Officials continue to work to understand and forecast when the economy will return to pre-pandemic levels. 

As stimulus efforts wane, economic growth is expected to slow while at the same time inflation is at its highest rate in 40 years and is expected to remain elevated for the immediate short-term. 

On June 30, the Office of Foundation Liaison’s Advisory Committee and CMF’s Government Relations Public Policy Committee will be hosting a virtual conversation with Michigan Budget Director Chris Harkins and State Treasurer Rachel Eubanks to debrief the CREC and share the economic outlook for the state and provide estimates for the state budget in future years.

Want more?

Learn more about the Consensus State Revenue Estimating Conference. 

Register for the virtual conversation with the Michigan Budget Director and State Treasurer. 

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