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Snyder tries to chill tax cut fever

More than a dozen state senators have sponsored a bill that would eliminate Michigan's income tax by 2022.
Lester Graham
/
Michigan Radio
The Michigan Senate passed a tax overhaul plan today that rolls back taxes on Michigan businesses by about $2 billion. The Michigan House is expected to quickly concur with the Senate action and send the measure to Governor Snyder for his signature.

Governor Rick Snyder says Republican lawmakers should not be too quick to adopt tax cuts this year.

“I think people should work under that assumption, that it could be very difficult. And, first, let’s make sure we’re being fiscally responsible.”

Nevertheless, some incoming GOP lawmakers say they’d like to cut the state income tax.

Among them are state Sen. Jack Brandenburg (R-Harrison Township), who told The Detroit News’ Chad Livengood he plans to sponsor an income tax rate rollback when the Legislature reconvenes later this month.

“When you look at the last four years, we hardly did anything for working class families as far as tax relief,” he told the paper.

The state income rate was boosted as part of a deal in 2007 to balance the state budget. The rate was supposed to go down automatically, but early in his administration, Governor Snyder asked lawmakers to delay the reduction.

Followings his inauguration for a second term, the Republican governor says he would like to cut taxes, but now is probably not the time.

“I wouldn’t put that as the first thing on the list that’s going to be feasible,” he said. “We could see some budget challenges over the next year, not because of the economy – we’re growing well in Michigan, but past practices. Those old tax credits, battery credits, we have to pay those.”

He says there are still many millions of dollars in unclaimed business tax credits adding uncertainty to the budget picture. A report by the state Senate Fiscal Agency also says tax revenues are not matching projections and the state could be staring at a budget deficit in 2015.

A conference of legislative budget experts and Snyder administration officials will meet on January 16th at the state Capitol to come up with a consensus projection on how much money the state can expect to collect in tax revenue. The Consensus Revenue Estimating Conference will make the official determination on whether a budget deficit looms.

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987.