Analysis: Michigan Beats Most States in Tax Revenue Growth

The U.S. Census Bureau recently released state and local government quarterly tax information that shows Michigan's tax revenue continues to outperform the rest of the state economy. Policymakers should keep these figures in mind as Lansing cries poverty over this year's budget.

From the first quarter of 2009 to the first quarter of 2010, tax revenue in Michigan increased by 0.9 percent. While this may not sound like much, consider that the state lost 2.7 percent of its jobs and that the unemployment rate increased from 12.0 percent to 14.2 percent (it has since fallen from first quarter 2010 averages).

And Michigan's 0.9 percent revenue increase is more growth than in 35 other states.

Legislators are struggling to fill holes in the state budget for this and next year and may be tempted to increase taxes. But overall state tax revenue is up and the economy is down. The state should refrain from further burdening the economy in a desire to balance its budget.