Governor Rick Snyder and Republican leadership in the State House and Senate appear to be close to a deal on the budget.
From the Associated Press:
Gov. Rick Snyder and Republican state lawmakers are reporting "significant progress" on proposals related to business and pension taxes for the fiscal year starting in October... Two people with knowledge of the talks tell The Associated Press that the proposals include many elements of Snyder's original business tax plan. They spoke on the condition of anonymity because the deal hasn't been finalized. The Republican governor wants to replace the state's main business tax with a 6 percent corporate tax applied to corporations with shareholders. The plan would include taxes on pensions and other retiree income but it would be modified from Snyder's original proposal. The new proposal calls for phasing in or scaling back the tax.
Some lawmakers have been loathe to accept any taxes on pensions, but it appears a plan to phase in a pension tax may be more palatable.
Peter Luke of Booth Newspapers reports on some of the details of the agreement:
Under the phased-in alternative, the status quo would apply to those 67 and up, whose pensions would continue to be tax exempt. A middle group of retirees 60 to 66 would be subject to a pension tax, but the first $20,000 of pension income for single filers - $40,000 for joint filers - would be tax exempt. Those younger than 60 would pay tax on all their pension income.
An AARP spokesman said they remain opposed to a tax on pensions, whether its phased in or not.
A public announcement of the agreement is expected to come this afternoon.
