LANSING – General Fund and School Aid Fund revenues from the state’s major taxes are below the January projections for March 2019, the Michigan House Fiscal Agency said Friday, pointing to negative business tax collections and lower-than-expected sales tax collections.
The General Fund brought in $298.6 million in March 2019, HFA said, and year-to-date is $258.8 million below the consensus set at the January Revenue Consensus Estimating Conference. HFA said much of it is due to the timing of Single Business Tax and Michigan Business Tax collections, which continue to be heavily affected by when businesses claim credits.
Still, net business taxes are $173.3 million higher through March 2019 than they were a year ago as MBT collections have been “less negative,” by $114.6 million and Corporate Income Tax revenues are $148.4 million higher than last year’s collections, HFA said.
The SBT was negative in March because of a correction for misclassified Corporate Income Tax revenues, HFA said.
The School Aid Fund is estimated to have brought in $893.7 million in March, $40.8 million below projections, HFA said. Year-to-date, School Aid Fund revenue is $131.7 million below consensus estimates. Lower than expected sales tax collections are the primary reason, but HFA also said gross income tax collections are below the target estimate.
Income tax revenue totaled $434.8 million in March and year-to-date collections are $302.3 million lower than one year ago. HFA points to unusually large quarterly (or estimated) payments in December 2017 and January 2018, which increased the 2017-18 amounts. HFA said it is expected to smooth out during the next couple of months.
Sales tax revenues are $99 million higher than last year but still below the consensus estimate, HFA said. A portion of the shortfall can be attributed to harsh weather in January and February, HFA said.
Revenues from all consumption taxes – sales, use, beer and wine, liquor and tobacco – brought in $770.4 million in March, HFA said, which is $53.9 million above consensus estimates. Revenues from the State Education Tax and Real Estate Transfer Tax were $17.8 million and $17 million respectively.
The transfer from the lottery to the School Aid Fund was $90 million. Year-to-date, those transfer are $41.5 million higher than the last fiscal year.
This story was published by Gongwer News Service.