LANSING – Michigan’s April income was up compared to the year before, and the month marked the third in a row that revenues from the state’s major taxes had increased. While good news, one state official said Michigan must still cope with a $1 billion deficit for the next fiscal year starting Oct. 1.
The news also comes a week before the heads of the Senate and House fiscal agencies along with Treasurer Jay Rising meet to craft the estimated revenue proposal Gov. Jennifer Granholm and the Legislature will have to use to complete the budget.
In April, total state revenues from the major taxes amounted to a net of $1.6 billion, an increase of 3.4 percent. But gross revenues were actually down – $1.625 billion, a drop of 4.3 percent – because of the change in collections on the state’s education property tax. All year long that change, with the entire tax collected in the summer has skewed revenue figures. In April total collection of the education property tax was down by 86 percent from the year before.
With April’s figures, the state has raised so far this fiscal year $8.6 billion in gross revenues, a decline of 5.7 percent from the year before. But if the state education property tax is backed out, the state has raised $8.3 billion, an increase of 0.9 percent.
The income tax provided the biggest spark, netting $578.1 million in April, a boost of 12 percent from the year before. Gross income taxes were $955.3 million, an increase of 7.2 percent (April is when income tax collections are due), but refunds totaled $377.2 million. Refunds were up 0.6 percent compared with April 2003. For the year, the income tax has raised $2.9 billion, an increase of 1.8 percent.
The income tax helped offset a decline of 3.2 percent in the sales tax. The tax netted $516.4 million, and for the year has raised $3.1 billion, a drop of 0.4 percent. The tax in April was hurt by slow car sales as related taxes dropped by 17.1 percent to $81.4 million. All other sales taxes were also down slightly, by 0.1 percent to $435 million.
The use tax was up by 16.7 percent, which raised $111.9 million for the month, and $2.7 billion for the year. The yearly figure is up by 1.1 percent.
Collections of the single business tax were down by 9 percent for the month, netting $256.8 million. For the year collections are flat, netting $903.3 million.
However, the insurance tax was up a whopping 67.6 percent compared to April 2003, raising $31.5 million. For the year tax collection is up 10.8 percent at $137.9 million.
And, reflecting strong housing sales during the month, the real estate sales tax was up by 19.9 percent, raising $21.7 million. For the year, the tax has raised $144.9 million, an increase of 21.5 percent over the previous year.
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