LANSING, Mich. — Senate Republican Leader Aric Nesbitt, on Thursday, blasted Senate Democrats for punishing Republican senators and signaling future rule changes after they voted against legislation to divert billions of tax dollars into corporate handouts and stop an automatic income tax rollback for all Michiganders.
“You don’t punish the opposition and change the rules because you aren’t getting your way in pushing higher taxes on Michigan families and small businesses,” said Nesbitt, R-Porter Township. “Democrats’ accounting gimmicks, income tax increase, corporate handouts, and refusal to provide two-thirds of seniors with tax relief is bad enough, but they decided to also change Senate rules instead of simply governing with transparency.”
Senate Democrats voted to strip two Republican members of committee assignments and eliminated the minority held position of associate president pro tempore after the Senate was adjourned early last week in accordance with chamber rules in order to delay voting on House Bill 4001. They also have signaled other rule changes.
“This bill was rushed through the Legislature without committee hearings, without bipartisan negotiation and without any debate allowed in the House — the people of Michigan deserve better,” Nesbitt said. “Not only does this proposal miss that mark on the things that should have been easy to get done, but it also includes a bait and switch scheme to cheat all Michigan taxpayers out of the long-term tax relief that they were promised.
“Unfortunately, our Republican plan of a $500 per child tax credit, tax relief for all seniors, and upholding the law to lower the income tax was rejected because the governor and Democrats have big spending plans.”
Under a 2015 law, an automatic and permanent reduction to the state income tax rate is triggered if revenues in Michigan’s general fund increase past a certain point. The House and Senate fiscal agencies estimate that Michigan was $700 million over the trigger’s threshold in fiscal year 2022, which would reduce the income tax rate from 4.25% to 4.05%.
HR 4001, as enrolled, would stop that cut by retroactively moving $800 million from the general fund to a new fund to provide one-time $180 rebates in 2023 and then directing over $1.4 billion over the next three years to the Strategic Outreach and Attraction Reserve (SOAR) Fund removing legislative spending authority. It would also increase the state’s Earned Income Tax Credit (EITC) from 6% to 30% of the federal EITC beginning with the 2022 tax year and phase-in over four years an exemption on certain retirement income from the state income tax, such as public retirement or pension benefits.
“The state budget director revealed last week that the governor’s proposed 2024 spending plan will wipe out the state budget’s $9.2 billion surplus, leaving just $250 million,” Nesbitt said. “HB 4001 and the process that hatched it wreaks of Washington — handouts for corporations, smoke and mirrors to deceive the public, accounting gimmicks, and higher income taxes. Michigan taxpayers can see through this game.”