LANSING – Revenues to the Michigan general and School Aid funds are up by a combined amount between roughly $500 million to $700 million for the 2011-12 fiscal year from what was estimated in January, according to forecasts released Friday by the House and Senate Fiscal agencies.

There are some significant caveats the numbers. While the House Fiscal Agency took into account the impact of the tax legislation soon to be signed by Governor Rick Snyder, the Senate Fiscal Agency did not.

The projections come ahead of Monday’s critical Revenue Estimating Conference during which the agencies and the Department of Treasury, which does not publish its forecast ahead of the conference, will reach consensus figures on revenues for the 2010-11, 2011-12 and 2012-13 fiscal years.

According to the HFA, revenues are $334.7 million higher for the general fund than projected at the January Revenue Estimating Conference and $149 million higher than forecast for the School Aid Fund for a total upward revision of $483.7 million. That’s based on tax law prior to the overhaul that replaced the Michigan Business Tax with a 6 percent corporate income tax and eliminated most income and business tax credits and exemptions.

However, even when accounting for those tax changes, which were a net tax cut, House Fiscal Agency Director Mitch Bean said there will still be between $400 million to $500 million in additional revenue from January with which legislators and Snyder must decide what to do.

When accounting for the tax plan, the HFA estimated $7.759 billion in revenues for the general fund and $10.653 billion for the School Aid Fund. Those numbers would grow by $119 million and $310 million, respectively, for the 2012-13 fiscal year.

The HFA also estimated year-end balances for the current 2010-11 fiscal year of $262 million in the general fund and $657 million in the School Aid Fund.

Meanwhile, the Senate Fiscal Agency forecast $541.4 million more money than in January for the general fund and $136.1 million more for the School Aid Fund.

However, the Senate Fiscal Agency forecast said it did not account for the tax changes. SFA officials could not be reached for comment about how the tax changes would affect the additional amount of revenues available, but for some time, Sen. Roger Kahn (R-Saginaw Township), the Senate Appropriations Committee chair, has said he expected about $500 million in additional available revenue.

The SFA forecast a year-end balance for the 2010-11 fiscal year of $371 million in the general fund and $645 million in the School Aid Fund.

And when the SFA compared the Senate-passed budget bills to the revised revenue estimate, there was a positive balance of $953 million in the general fund and $361 million in the School Aid Fund. Those numbers do account for the tax changes.

Budget Director John Nixon urged caution.

“The released revenue estimates show positive signs toward economic recovery in Michigan,” he said in a statement. “I am encouraged by this good news and think it demonstrates that Michigan is poised and ready for a bright and prosperous future. I would caution, however, that this bright future we all desire can only happen when we remain committed to a balanced budget. We must proceed prudently and ensure we achieve long-term structural balance. … Decisions to build the 2012 budget with any 2011 surplus would jeopardize that strong position.”

House Speaker Jase Bolger (R-Marshall) sounded a similar theme: “We have made tremendous progress so far this year toward reining in government spending and creating a structurally balanced budget for the first time in many years. The temptation to spend unanticipated money will be strong, but we cannot forget that we have a duty to be fiscally responsible. We need to start addressing the long-term debt that is currently waiting for our kids and grandkids to deal with.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

a>>