Michigan House Speaker Matt Hall says there will be a floor vote this week on a bill to roll back the state income tax rate. That would reverse a determination by the state Treasury and the Attorney General’s office and upheld by court decisions that a 2023 reduction was for one-year only.
The reduction was based on a formula that includes revenue increases and inflation. Gov. Gretchen Whitmer and Michigan Attorney General Dana Nessel said the rollback to 4.05% was a signal of Michigan's strong economy.
“In total, we have put $1.6 billion in tax relief back in people’s pockets without cutting any critical services or programs,” she said at the time in a statement released by her office at the time.
Republicans say the rollback was essentially a reset and the rate should have remained at 4.05% instead of returning to 4.25%. Hall said that would require the
Legislature to set its top priorities and then make tough decisions, including budget cuts.
“What programs get the best return on investment?” he asked Friday. “We’re going to fund those, we’re going to fund the income tax rollback and we’re going to fund the roads, and then the rest of the stuff is not going to make the cut. We can do that within our existing budget if we set good priorities.”
But Democrats said the GOP tax cut plan is a shell game without a list in advance of roughly $540 million in spending cuts in this fiscal year and $700 million in future years to keep the budget balanced.
“I would like to know the plan,” Rep. Kelly Breen (D-Novi), who serves on the House Finance Committee, told the Michigan Public Radio Network. “I’m happy to see that it is the first probably honest and sincere effort to put money back into the hands of Michiganders, but the question is, is the juice worth the squeeze?”
The tax rollback bill was adopted last week by the finance committee without Democratic support.
If adopted by the House, the rollback would also have to be approved by the state Senate, which is controlled by Democrats, and by Governor Whitmer.
