Michigan’s Revenue Will Be Less Due To 2023 Tax Cuts But Surplus Remains High

Michigan’s revenue fell by nearly $900 million compared to January forecast because of the 2023 tax cuts according to the state officials on Friday, leaving lawmakers with less money to spend as they work toward the state’s next budget.

Michigan’s Budget Will Be Less This Year Due To Tax Cut But Surplus Remains High (PHOTO: Manistee News Advocate)

Michigan’s Revenue Will Be Less Due To 2023 Tax Cuts

Friday, the new projections were released at a revenue estimating conference, which represents Michigan’s revenue will be an estimated $883 million dipping this year and $1.8 billion more inferior than previously predicted next fiscal year, leaving lawmakers with less money to spend as they function toward the state’s successive budget.

The state’s economy “continues to perform well,” and the loss in revenue was a result of intentional policy changes according to State Treasurer Rachel Eubanks.

Moreover, Eubanks also added her statements after the new estimates were released claiming that they are projecting revenue growth for the coming years, even with the responsible tax relief, due to the state’s strong economic position, thriving businesses, and low unemployment.

State Budget Director Chris Harkins said that the Michigan state will go into the next fiscal year that begins in October with a surplus of an estimated $7.5 billion.

Detroit Free Press reported that Democratic Gov. Gretchen Whitmer proposed his budget this year worth a $79 billion spending plan that she presented in February but Haskins said to lessen the budget due to the new projections.

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Michigan House Passed A $80 Billion Budget

Last week, the Michigan House passed an allocation worth $80 billion budget before the Senate approved its own $79 billion budget. The two chambers will have until July before the deadline which is a self-imposed date to reach an agreement on a final budget.

Democrats have full control of the process but still, they need full support from Republicans for the budget to take effect by the end of the fiscal year in October, even with a two-seat majority in both chambers. The two-thirds immediate majority is needed to approve a vote in the state Senate.

An income rate 2023 tax cut triggered earlier this year by high revenues will cost the state an estimated $647 million in revenue over the next two years.

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