LANSING, Mich. — State Sen. Jim Runestad on Thursday voted against a Democrat scheme that would increase the tax burden on Michiganders by stopping an automatic state income tax rollback from going into effect.
“Today, I said no to the governor’s continued game of choosing winners and losers in her efforts to squander the state’s budget surplus; I said no to this dishonest shift-and-shaft tax grab,” said Runestad, R-White Lake. “All Michiganders deserve the ongoing permanent tax relief they’ve been promised, not to be handed a measly $180 appeasement check to look the other way while their pockets are picked.”
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%.
“Michiganders were promised the income tax rate rollback when Gov. Granholm signed her tax hike in 2007; that never happened. Last year, Gov. Whitmer vetoed bipartisan tax relief that was sent to her desk. Now, state law is set to initiate an automatic income tax cut and Gov. Whitmer and the Democrats are pulling every trick they can to stop it in order to pillage the state’s $9.2 billion surplus to grow the size of state government,” Runestad said.
House Bill 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. 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.
“This scheme is nothing more than a brazen attempt to prevent the automatic income tax rollback in order to fund the Democrats even bigger, and more expensive, future spending bonanza,” said Runestad. “I will not stand silently by as our governor swindles Michiganders out of their hard-earned dollars and irresponsibly blows through more than $9 billion that isn’t hers.”