Whitmer vetoes GOP bill that would cut Michigan’s income tax rate

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Governor Gretchen Whitmer vetoed the latest GOP-led measure that would lower the state income tax rate while creating new tax breaks for seniors, families and others.

The move was not unexpected, as the measure was largely similar to a proposal already opposed by the governor earlier in the year.

When she vetoed a comparable proposal in March, Whitmer argued the ideas were short-sighted and could cripple crucial state programs in the future. But this time, Whitmer said the legislative tactic used by the Republican majority in the State House to fast-track the bill through both houses could render it unconstitutional.

“The constitutional flaws in this rushed process are both glaring and obvious. The bill was passed in defiance of constitutional rules that are meant to protect the right of Michiganders to evaluate proposed laws and have their voices heard before these laws are passed,” Whitmer said. wrote in the letter to lawmakers informing them of his veto.

After:Michigan Legislature’s New $2.5 Billion Plan Cuts Income Tax, Creates $500 Child Tax Credit

After:Michigan Senate Approves Proposal That Would Suspend Gas Taxes This Summer

Republicans blasted the move, calling the governor out of touch with struggling Michiganders trying to fend off challenges posed by historic inflation.

“Whitmer’s words ring hollow as she actively works to keep economic aid from reaching families as a recession approaches and inflation hits new highs. She is clearly not serious about the ‘relieving the burden of his economic failures and Joe Biden and does not want to work in a bipartisan way to do so,’ Michigan Republican Party spokesman Gustavo Portela said in a statement.

The move comes as the executive branch and lawmakers grapple with how best to return taxpayers’ money to Michiganders as the state enjoys a massive budget surplus, thanks in large part to the influx of the federal COVID-19 relief. Lawmakers and the Whitmer administration are expected to continue budget negotiations next week, with a de facto month-end deadline for a deal looming.

The $2.5 billion plan would have cut the personal income tax rate from 4.25% to 4% – the latest plan cut the rate to 3.9%. The latest plan also created an annual child tax credit of $500, increased the personal tax exemption from $4,900 to $6,700 per taxpayer and expanded eligibility for the earned income tax credit. . This latest proposal, created to help families earning some of the lowest incomes in the state, feeds directly into the governor’s original plan.

While the reason for the governor’s veto is more technical than the substance of the bill, Senate Minority Leader Jim Ananich, D-Flint, said the move rightly ensures lawmakers aren’t trying not to do confusing stuff with massive last-minute changes to bills. .

“This is not some kind of technicality, it is a fundamental principle and Governor Whitmer’s veto is evidence of his commitment to the transparency and integrity of our legislative process,” Ananich said in a statement.

In his final letter, Whitmer highlighted his own tax cut proposal. This includes a pause in the collection of sales tax on fuel purchases, plans to reduce pension taxes and expanded earned income tax credit eligibility.

“With billions in additional revenue and a growing economy, we have a historic opportunity to negotiate a balanced, bipartisan budget that delivers real inflation relief now. Let’s work together to invest in our shared priorities like getting our kids back on track. the right way, fund the police and fix our crumbling roads and bridges,” Whitmer said.

After:As Election Approaches, Governor Whitmer’s Enthusiasm for Tax Cuts Grows

After:Whitmer offers $500 rebate checks to Michigan working families

The big question is whether Whitmer and Republican leaders can find common ground before the end of the month on some sort of deal. While lawmakers and the governor realistically have until the end of the fiscal year in September to agree on a broader budget plan, technically everyone is expected to reach an agreement by the end of June. .

Any agreement on sweeping tax cuts would be unlikely without at least the framework of a broader fiscal plan in place.

One area where it appeared Whitmer and lawmakers had a deal was on gasoline taxes. Although the governor previously vetoed a state tax cut of 27 cents per gallon, she has since indicated openness to a pause in sales tax collection.

In May, Senate Republicans and Democrats approved a summer tax break plan. The measure would ensure that the state would temporarily stop collecting the 6% gasoline sales or use tax and gasoline tax per gallon from mid-June through mid-September.

But this week, the House had not yet adopted the proposal. That’s because the administration disagrees with the current plan, said Sen. Aric Nesbitt, R-Lawton, one of the plan’s architects.

The Legislative Assembly has scheduled nine more days of House and Senate sessions before the start of its annual summer break.

Contact Dave Boucher: dboucher@freepress.com or 313-938-4591. Follow him on Twitter @Dave_Boucher1.


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