According
to a revenue forecast released this week by the Senate Fiscal Agency,
General Fund and School Aid Fund revenues will total an estimated
$21.5 billion in the current 2014-15 fiscal year, growing revenues
from the previous fiscal year by 4.6 percent.
However, the forecast is
$212.2 million below the May 2014 consensus estimate, and that means
the state would close the year on September 30, 2015 with a negative
balance of $162.2 million based on current revenues and
appropriations.
The
agency's forecast is one of three that will be considered when it,
the House Fiscal Agency and the Department of Treasury come up with
their consensus estimate at January's Revenue Estimating Conference.
To
fix the projected negative General Fund balance, the Senate Fiscal
Agency said the state would have to shift revenue from other fund
sources or reduce spending for the current fiscal year.
Also
estimated to drop is the preliminary revenue estimate for the 2013-14
fiscal year that ended September 30 to $20.5 billion (down 1.5
percent from the previous 2012-13 fiscal year). That decrease
reflects an improving economy that was more than offset by
greater-than-expected refunds under the Michigan Business Tax and
individual Income Tax. Combined General Fund and School Aid Fund
revenue for 2013-14 is also expected to be $301.6 million below the
May 2014 consensus estimate.
Looking
ahead, the agency projected that in the fiscal year 2015-16 budget
Governor
Rick Snyder
and the Legislature will draft in the coming months, combined General
Fund and School Aid Fund revenue will total $22.1 billion, a 3.1
percent increase from the current year, but $372.6 million below the
May 2014 consensus estimate.
If
that General Fund revenue estimate is compared with expected
expenditures freezing ongoing and one-time spending to current fiscal
year levels and is adjusted for caseload changes, there is also a
projected negative General Fund balance of $186.4 million for the
2015-16 fiscal year, the Senate Fiscal Agency projected.
The
agency projects a surplus of $326.5 million for the School Aid Fund
for the 2015-16 fiscal year.
As
for the Michigan economy, it is estimated to grow by 3.4 percent in
2015, 3.1 percent in 2016 and 2.6 percent in 2017. It rose 2.8
percent in 2014. Wage and salary employment is predicted to continue
growing, increasing 1.3 percent during 2015, 1.1 percent in 2016 and
1 percent in 2017, the report indicated.
By
comparison, the U.S. economy - which grew 2.3 percent in 2014 - is
predicted to expand 3 percent in both 2015 and 2016, and then 2.7
percent in 2017.