CREC adopts pupil counts, childcare and Medicaid caseload estimates and a revised consensus revenue forecast

State and legislative fiscal staff presented revised enrollment and program caseload estimates and the conference principals approved each recommendation by voice vote during the May 2025 Consensus Revenue Estimating Conference in Lansing.

State Treasurer Rachel Eubanks opened the session noting the meeting is required under Public Act 72 of 1991. The conference then heard a sequence of technical presentations from the State Budget Office and the House and Senate fiscal agencies and voted on the staff recommendations.

Votes at a glance - K-12 pupil estimates (Fiscal 2024-25 through 2026-27): Approved by voice vote. Staff recommended a fiscal-year 2024-25 membership blend of 1,384,500 total pupils (1,230,000 in local districts; 54,500 in public school academies), a projected decline of about 6,400 pupils from FY 2023-24. The FY 2025-26 projection was about 1,377,800 and FY 2026-27 projection about 1,370,100. Pupil adjustment factors were 1.0049 (2025-26) and 1.0056 (2026-27). - Child Development and Care (CDC) caseloads and cost estimates: Approved by voice vote. Staff reported current-law CDC funding of $499 million and projected increases in caseload and cost: staff estimated about a 14% caseload increase to roughly 26,800 cases in 2025 and a 12.6% increase in cost per case; total CDC costs were projected at about $511 million in 2025 and a further rise in 2026 with an estimated caseload near 29,400. Staff said about $30 million of the incremental 2026 cost would be general fund, and the net projected increase over current-year spending was roughly $93 million in general fund across the biennium compared with current appropriations and earlier executive proposals. - Medicaid and human services caseloads and costs: Approved by voice vote. Staff presented current-year recommended adjustments of about $896.0 million gross and $234.2 million general fund for the Department of Health and Human Services, with most growth ($875.7M gross; $212.5M GF) on the health services side. For fiscal 2026 staff estimated a gross increase of about $513.0 million and a net small general fund reduction relative to the executive supplemental recommendation. Compared with the executive recommendation released in February, staff reported a net change before the principals of +$163.8M gross and -$41.5M general fund across the window presented. - Adoption of the revised consensus revenue forecast: Approved by voice vote. The principals adopted a revenue agreement that revised the January 2025 consensus: general fund revenue was revised downward (about -$221 million in FY25; -$363 million in FY26; -$400 million in FY27 relative to January), school aid fund revenue was revised modestly upward (about +$85M in FY25; +$40M in FY26 and FY27), and combined school-aid-plus-general-fund totals were reduced in each year. Under the revised economic and revenue assumptions the statutory Budget Stabilization Fund (BSF) calculation indicated a potential payout of up to $538.5 million in FY26; the principals noted that any actual BSF pay-out would still require legislative appropriation and is not automatic.

What staff recommended and why - The State Budget Office and legislative fiscal agencies said K-12 membership blends incorporate newly audited February 2024 counts and preliminary February 2025 counts; they noted continuing downward demographic pressure from lower birth cohorts and recommended modest downward revisions for the next two fiscal years. - CDC presenters said caseload growth reflected eligibility and enrollment trends and that federal funding changes during the pandemic had raised ongoing program costs and rates; staff flagged a portion of 2026 increases as general-fund-exposed and noted the executive recommendation's earlier actions. - DHHS presenters said near-term additional gross spending largely reflects health services trends and caseload growth, and compared their consensus estimates to the governor's supplemental recommendation for context. - Revenue staff (Treasury, House Fiscal Agency, Senate Fiscal Agency) said the revisions reflect weaker-than-expected consumption tax growth, processing and refund timing in the individual income tax season and elevated economic policy uncertainty tied to trade and tariff policy.

At the microphone - Beth Bullion, State Budget Office, presented revised pupil estimates and adjustment factors for school aid calculations. - Joel Durr and Matt Ellsworth, State Budget Office, and their House and Senate fiscal agency counterparts presented CDC and Medicaid caseload and cost consensus recommendations. - Eric Busses (Treasury), Ben Gilchak (House Fiscal Agency) and David (Senate Fiscal Agency) presented the revenue and economic consensus tables and explained adjustments since the January 2025 forecast.

Formal actions and process notes - Each staff recommendation was adopted by voice vote; the public transcript records an affirmative "aye" for each motion and records no oppositions at the time the chair put the question. The transcript does not record a roll-call tally or the names of movers and seconders for each motion. - The conference also published the updated consensus agreement and economic tables; the group noted the importance of monitoring tariff and trade developments that could change these forecasts before final budget decisions.

Ending: The principals closed the conference after adopting the staff recommendations and noting that the updated consensus documents will be posted online for use in the FY 2026 budget process.