Whitmer: Pension tax rollback and EITC should be 2023’s first laws
Governor Gretchen Whitmer would like the first two public acts of her second term to be lifting the income tax on pensions and expanding the earned income tax credit. That’s as the state Legislature controlled by new Democratic majorities has started sending bills to her desk.
The Legislature approved a batch of bills Thursday that included those two measures – although negotiations on final versions continued into the night.
“Targeted tax relief like the working families tax credit and the repeal of the retirement tax are great steps to get more money in the pockets of people who are struggling right now,” Whitmer told Michigan Public Radio.
Whitmer said working with new Democratic majorities in the Legislature will allow her to accomplish things left undone in her first term.
“It’s time to take it to the next level, whether it’s workforce training or investment in education and improving outcomes or making our communities safer from gun violence, supporting law enforcement,” she said. “These are things I’ve been working on and I want to continue to move forward on.”
But the first bill sent to Whitmer’s desk was a nearly $1.1 billion spending bill left lingering from last year, as control of the Legislature was about to shift from GOP control to Democratic majorities.
Some of that money would close the books on the state’s previous budget for the 2022 fiscal year. Lawmakers had expected to get that done in December, but a deal fell apart before the legislative session ended.
It was up to the new Legislature to re-assemble those pieces, said Representative Sarah Anthony (D-Lansing), who chairs the Senate Appropriations Committee.
“Members in our (Democratic) caucus and in our Republican caucus took the time to actually find some projects that we want to make sure to invest in right now. But -- so this is actually the very first month of the Legislature, so we’re also going to have this expanded budget process,” said Anthony.
Around $946 million of the new appropriations are to finalize the state’s current budget. Those items include $200 million for an Upper Peninsula paper mill that were part of last year’s discussions.
The project is near Escanaba, which is represented by Senator Ed McBroom (R-Waucedah Twp). He said the century-old mill desperately needs upgrades. And he said long term jobs are at stake without state assistance.
“This isn’t the only location where this could happen. There are other places that could be done and if that takes place, the opportunity for Michigan, and for Escanaba in particular, are in serious jeopardy,” said McBroom.
The appropriations bill also includes:
- $150 million for the Strategic Outreach and Attraction Fund, which is doles out large amounts of money for incentives packages.
- $150 million for a new affordable housing tax credit program and $25 million for a new Michigan Treasury initiative to prevent water shutoffs.
- $3.1 million for the Michigan Independent Citizens Redistricting Commission, which is currently suing the Legislature for funding
Republicans complained this spending bill was rushed through by Democratic leaders with details kept secret until very late in the process.
“Another point of contention is this measure was originally positioned as a book-closing supplemental. But the measure before us today goes well beyond a book closing,” said Senator Thomas Albert (R-Lowell).
One bill that passed the state Senate, but has not been approved by the House, would move up Michigan’s presidential primary to February 27 in a bid to gain more influence over selecting the nominees. This comes a little over a month after the Democratic National Committee moved to allow Michigan to vote earlier in the primary process.
Senator Jeremy Moss (D-Southfield) sponsored the bill. He said moving the election up benefits both Democrats and Republicans.
“Our electorate has a lot to offer,” he said. “Michigan is important and it is way more reflective of the mix of urban, suburban, and rural residents around the country, and has a more complex economy than other traditional early states.”
Republicans said it’s already too late to move up the GOP primary without costing the state party delegates to the national convention.
Senate Minority Leader Aric Nesbitt (R-Porter Twp) said he still believes there’s a compromise possible with Democrats. He said with President Biden likely seeking re-election in 2024, the Michigan Republicans would like more influence in choosing the GOP challenger.
“On the Republican side, it sounds like it’s going to be a fight, a really competitive race. I mean [former President Donald] Trump’s in the driver’s seat but there’s a lot of other candidates that are high quality candidates and I think it’s important to make Michigan relevant. But let’s do it in a way that’s fair for both Republicans and Democrats,” Nesbitt said.
He said moving the proposed date later to March would solve the issue.
Democrats will need to gain some Republican support for the bill to take effect in time to meet party deadlines for 2024.