Since 1950, the Michigan Legislature has only overridden a governor’s veto four times. This week was one of those times.
In July of 2017, Gov. Rick Snyder vetoed a bill that would speed up the implementation of a tax cut for people who trade in their car for a new one, known as the “sales tax on the difference” bill. This week, the state Legislature voted overwhelmingly to override that veto.
Vicki Barnett, the former Mayor of Farmington Hills and a former Democratic legislator, and Ken Sikkema, Senior Policy Fellow at Public Sector Consultants and former Republican legislative leader, joined Stateside to talk about the political and financial significance of the override.
Listen above for the full conversation, or read highlights below.
What is the ‘sales tax on the difference’ bill?
“Michigan is one of the few states where, when you trade in a vehicle and purchase a new one, you pay a sales tax on the entire cost of the new vehicle and not on the difference between your trade-in value and the new vehicle,” Barnett said.
“So several years ago, the Legislature passed a bill that would phase out that tax on the new purchase and allow you to deduct from sales tax the cost of the vehicle that you were trading in, and [the bill] phased in over several years. This summer, the Legislature passed a bill to accelerate that phase-in so that it would take effect quicker,” Barnett said.
What did Governor Rick Snyder object to?
“This bill override comes on the heels of the Legislature proposing to change the tax code once again to match the cuts and the impact of the federal tax law change on Michigan residents,” Barnett said. “Those things altogether,” she continued, presented too much of a revenue loss to Governor Snyder’s state budget.
Sikkema, however, believes that the impact on the state budget, both in the short term and long term, is “pretty minimal.”
What is the political significance of this override?
“The relationship between the Republican legislature and the Republican governor right now is not the best,” Sikkema said. The fact that the override comes in Snyder’s last year in office, Sikkema said, “is an indicator that the Legislature feels that there’s not a lot of time for repercussions.”
“I wouldn’t blame the entire problem on the governor and his waning power,” Barnett said. “It’s also due to inexperience in the Legislature and a desire of many of the Republicans in the Legislature to keep going on this course of cutting taxes, cutting taxes, and cutting taxes, without realizing that tax money is what pays for road improvements and repair, and education, and quite a few things that we need in the state of Michigan.”
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