Advocacy News – February 24, 2022
Once again, tax relief for Michiganders proves to be at the forefront of this year’s budget discussion. As previously reported, Governor Whitmer proposed a budget plan that would eliminate Michigan’s pension tax, increase the Earned Income Tax Credit (EITC) and provide a tax credit for purchases of electric vehicles. The Michigan Senate, however, considered and passed Senate Bill 768, sponsored by Senator Aric Nesbitt, that would roll-back both the income and corporate tax rate to 3.9%, as well as provide a $500 income tax credit for qualified dependents.
Today, a joint committee between the Michigan House of Representatives Appropriations Committee and Tax Policy Committee presented the House’s version of what tax relief should look like in this year’s budget. The joint committee meeting considered House Bills 5838 and 5054.
House Bill 5838, sponsored by Representative Matt Hall, would roll-back the income tax from 4.25% to 3.9% beginning January 1, 2022, and provide a tax exemption for Michigan seniors and retirees. Under the bill, Michigan residents ages 62 to 67 would retirement income would be exempt from income tax up to $20,000 if filing individually and $40,000 if filing jointly. To read the House Fiscal analysis of the bill, click here.
Also considered before the joint committee today was House Bill 5054, sponsored by Representative Thomas Albert. The bill makes a one-time deposit of $1.5 billion dollars into pension funds for local municipalities and the Michigan State Police (MSP), as well as a $900 million investment for pension systems that are less than 60%.
The Michigan Chamber of Commerce will continue to keep you up to date as the budget process continues and will ensure that you know what to expect in the coming fiscal year. For questions or more information, please contact Leah Robinson at lrobinson@michamber.com.