The $7 billion still available after the state’s largest budget agreement in history is being considered as part of the discussion to provide Michigan residents with some sort of tax reduction. But it’s still unclear as to when that might happen.
Early on Friday, lawmakers approved $75.7 billion in spending for the state’s various agencies and institutions, $19.6 billion of which will go into the School Aid Fund.
The budget allocates $9,150 per student as a foundational allowance for schools, $2.65 billion to pay down the public employee pension systems, and a total of $6 billion for local road and bridge repairs, airport and transit system upgrades, and local road and bridge reconstruction.
But the spectre of a discussion that has been going on throughout this legislative session—taxes—was not mentioned in the conversation that took place on Thursday night into early Friday morning.
But that doesn’t mean that the discussion won’t take place.
The chair of the House Appropriations Committee, Rep. Thomas Albert, R-Lowell, said early on Friday that there was still “plenty of running room” in the legislative year and that he was not frustrated by the lack of progress on a tax cut as part of the budget.
We still have $7 billion on the balance sheet, if you look. Therefore, tax relief is still an option, he said.
Although not all of that money will be used for tax cuts, Albert predicted that some of it might be used to lower revenue projections because he was concerned that the state might experience a mini-recession.
One of the main reasons, he claimed, that he did not want to use up the entire state’s surplus funds at once was out of fear that it would put Michigan “in a bad spot” and force us to alter our revenue projections.
The head of the Senate Appropriations Committee, Sen. Jim Stamas, R-Midland, echoed worries about a recession.
He told reporters early on Friday that he thought the discussion about tax policy would take precedence when it came to the $7 billion surpluses Michigan was currently experiencing.
He continued by saying that more concrete decisions about how and where to spend the money can be made as a result of those conversations.
Read more:-
- Infrastructure for a 23-acre Old Irs Facility in Covington Will Be Designed by a Team Headed by Kzf Design.
- Mexican National and Six-year Fugitive From Taxation Is Apprehended
- Illinois Establishes a Scheme Offering Up to $4k in Rebates for Electric Vehicle Purchases
A recession could be on the horizon, according to Stamas. “So… should we stick with only reinvesting the one-time funds, or do we continue to invest recurring dollars? One-time funds that we are certain we have on hand. The estimated future funds are those that will continue to be spent.
Governor Gretchen Whitmer has vetoed both attempts by Republican lawmakers to provide some form of a tax cut to Michigan residents this term.
A first attempt at the proposal, made late last year, was vetoed in March. It would have reduced the state’s income tax rate to 3.9 per cent, expanded retirement income exemptions, and established a $500 per-child tax credit.
