After weeks of buildup, a Democrat-backed tax plan that’s been at the top of the party’s priority list has made it out of the Michigan House. Though the road has been far from smooth.
The bill breaks down into four parts. One would phase out some taxes on pension income. Another would expand a tax credit for low- and moderate-income workers. Both ideas have gained bipartisan support on their own.
But House Democratic leadership spent two days wrestling to get enough support to pass the bill after a member of their narrow majority took issue with its third part.
Representative Dylan Wegela (D-Garden City) said he didn’t like how the bill would potentially put over $1 billion toward business incentives. Despite hours of pressure from his caucus, he refused to change his mind.
“I think jobs look for things other than just financial incentives. They look for talent, right? They want water that isn’t poisonous and they want schools where people can learn and have mental health professionals there. And they also want infrastructure. Those are all better uses of this money,” he said after the vote.
Meanwhile, Republicans warned a fourth part of the legislation that would send out tax rebate checks to residents could cost the state a projected income tax cut.
That tradeoff comes down to how Democrats plan to pay for the checks.
The expected income tax cut is triggered by law when state revenue far outpaces inflation. But the bill would divert $800 million from the state’s general fund to a new fund to pay for the checks. Preventing that revenue from ever hitting the general fund could cancel out the revenue gains and stop the automatic tax cut.
Republicans have said trading a permanent tax cut for a one-time $180 check is a bad deal.
When Democratic leadership moved to vote on the bill without letting them raise that concern on the House floor, Republicans were furious.
Chants of "let them speak" broke out in the chamber.
Representative Andrew Fink (R-Hillsdale) questioned why he wasn’t allowed to talk.
“They’re one floor speech away from losing the votes on this bill that’s designed to take away a tax cut from the people, to give money to corporations, and take it from main street business. That’s the most important thing happening right now, is that we not allow a person to give a three-page speech?” Fink said.
Democratic leadership vigorously defended their plans as the best and most equitable way to help families and older residents.
Majority Floor Leader Abraham Aiyash (D-Hamtramck) said it’s why they have the majority.
“If my Republican counterparts are frustrated at the fact that we just passed the once in a generational working families tax credit that will put thousands of dollars in the pockets of the working poor across our state, then I don’t know what to tell them,” he said.
Ultimately, Democrats did manage to attract one Republican vote on their bill to make up for losing the vote of Wegela — one of their own members.
House Speaker Joe Tate (D-Detroit) said the most important thing is that it got across the finish line in the House.
“Michigan residents expect us to actually get things done, and we are keeping our promises in terms of what we want to do. So, I think at the end of the day, Michigan residents want to see results and that’s what we just delivered today,” Tate said.
Still, the manner in which the bill got passed in the House could have consequences for its journey in the Senate.
Democrats had planned to get the bill through the Senate and to the governor’s desk on Thursday after its House passage.
But Senate Republicans successfully adjourned session before that could happen.
Jeff Wiggins, the spokesperson for Republican Senate Minority Leader Aric Nesbitt (R-Porter Twp), said the move to adjourn was the result of frustration over how bill negotiations have played out.
“We did that to say we’re part of this process too. Don’t forget that too. So hopefully there can be a hard reset here, hopefully we can all regroup over the weekend, have cooler heads prevail, come back and actually discuss,” Wiggins said.
Without Republican support on a procedural vote in the Senate, the bill wouldn’t take effect in time for the rebate checks to go out.
As it stands, Democrats seem unlikely to get that help.
When asked if she’d consider changing the rules of her chamber after Republicans ended the day’s session, Senate Majority Leader Winnie Brinks (D-Grand Rapids) said her party will respond. But she wasn’t ready to give any details yet.
“There will be a lot of conversation about how we proceed going forward.” Brinks said.
Democrats are planning for their next vote on the bill to take place Tuesday.
