Advocacy News – January 27, 2022
Last night, on Michigan’s 185th birthday, Governor Gretchen Whitmer provided her fourth State of the State (SOTS) address. The speech, which occurred virtually for the second year in a row, covered a range of less contentious “kitchen table” topics, many of which have been part of bipartisan conversations and initiatives over past legislative terms. However, as is typical with these types of addresses, there wasn’t a lot of details or any specificity regarding her plans for the massive surplus of funding available in the state’s upcoming budget.
Wednesday night’s address placed tax policy on the main stage. The Governor began her remarks discussing her plans to eliminate the state’s tax on pension income, in exchange for how pensions were treated prior to 2011. Her proposal could provide older Michiganders up to $1,000 more in their pockets annually and likely provided legislators hope that she is open to tax relief initiatives going forward. However, the pension tax elimination, as well as her other outlined proposals, were not accompanied by an explanation as to if or how she plans to backfill the missing revenue.
Governor Whitmer also proposed increasing the Earned Income Tax Credit (EITC), a refundable tax credit for low or moderate-income workers, to 20% of the federal credit from the current 6%. With the goal of expanding the middle-class, Michigan leaders have largely fluctuated regarding the amount they have been willing to provide since the early 2000’s.
On the heels of a bipartisan economic development package that resulted in an almost $7 billion investment from General Motors in electric vehicle production in Mid and Southeast Michigan, the Governor posited a $2,000 tax credit to incentivize the purchase of electric vehicles (EV) as well as a $500 credit for at-home charging stations. The tax credits mirror those provided at the federal level, which offers a $7,500 rebate for such purchases. Together, the federal refund and the Governor’s proposals would result in a $10,000 credit for those purchasing EVs.
In terms of healthcare initiatives, Governor Whitmer discussed expansion of mental health care in addition to lowering the cost of a necessary insulin. The Governor emphasized the need to ensure Michigan has quality mental health care providers, specifically in schools. To do so, she plans on utilizing, and likely expanding, the Michigan’s Loan Repayment Program which provide an incentive to recruit providers in the medical, dental, and mental health professions. The Governor firmly stated her desire to cap the cost of insulin.
The Michigan Chamber of Commerce looks forward to working with both the Governor and Michigan Legislature on both policy and budget proposals in the year ahead. We will be focused on pragmatic, bipartisan solutions that help address the most pressing needs of our state’s businesses while ensuring accountable government and fiscal responsibility.
Read our statement on last night’s SOTS address here.
For questions or more information, please contact Leah Robinson at lrobinson@michamber.com.