The Senate Fiscal Agency reported that
December tax collections were approximately $231.7 million below the estimate
from the May consensus revenue estimating conference. Additionally, Michigan’s
unemployment rate remains constant.
Tax collections remain lower mostly
due to higher than expected Michigan Business Tax refunds and lower than
expected sales tax collections. General Fund collections were $137.4 million
below expected and School Aid Fund collections $83.1 million below. Net income
tax revenue was 2.2 percent higher than last year, meaning a 3.3 percent
increase in withholding payments. This reflected a 26.5 percent increase in
income tax annual payments, however high income tax refunds, which were $17.5
million above prediction, offset these gains. The sales tax revenue decreased
8.4 percent and $109.8 million below expected levels in part due to a decline
in vehicle sales and other taxable sales. Both the combined business tax
collection from the Single Business Tax, MBT, and Corporate Business Income
Tax, and the State Education Tax were below expected collections and real
estate transfer tax collections were up.
The unemployment rate remained at 5.1
percent for December, down 1.3 percent from December 2014. Michigan’s labor
force grew by 22,000 people and had 4.54 million people working. The number of
unemployed was 246,000, up from November but down 60,000 from December 2014.