gov. Gretchen Whitmer vetoed the latest GOP-led measure that would reduce the state’s income tax rate while creating new tax breaks for seniors, families and others.
The move was not unexpected, as the measure was largely similar to a proposal already vetoed by the governor earlier in the year.
When she vetoed a comparable proposal in March, Whitmer argued the ideas were shortsighted and could hamstring crucial state programs in the future. But this time, Whitmer said the legislative tactic the Republican majority in the statehouse used to fast-track the bill through both chambers may render it unconstitutional.
“The constitutional defects of this hurried process are both glaring and obvious. The bill was passed in open disregard of the constitutional rules that are meant to protect Michiganders’ rights to evaluate proposed laws and make their voices heard before those laws are adopted,” Whitmer wrote in the letter to lawmakers informing them of her veto.
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Republicans blasted the move, calling the governor out of touch with struggling Michiganders who are trying to fend off the challenges posed by historic inflation.
“Whitmer’s words ring hollow as she actively works to prevent economic aid from reaching families as a recession approaches and inflation hits new highs. She is clearly unserious aboutlessening the burden of her and Joe Biden’s economic failures and unwilling to work in a bipartisan manner to get this done,” said Gustavo Portela, a Michigan Republican Party spokesman, in a statement.
The move comes as both the executive and lawmakers grapple over how best to return tax dollars to Michiganders as the state enjoys a massive budget surplus, thanks in large part to the influx of federal COVID-19 relief. Legislators and the Whitmer administration are set to continue budget negotiations next week, with something of a de facto end-of-month deadline for a deal looming.
The $2.5 billion plan would have rolled back the personal income tax rate from 4.25% to 4% — the last plan cut the rate to 3.9%. The latest plan also created a $500 annual child tax credit, increased the personal tax exemption from $4,900 to $6,700 per taxpayer and expanded eligibility for the Earned Income Tax Credit. That last proposal, created to help families that earn some of the lowest incomes in the state, is directly incorporated from the governor’s original plan.
Although the governor’s reason for veto is more technical than on the substance of the bill, Senate Minority Leader Jim Ananich, D-Flint, said the move rightly ensures lawmakers don’t try to pull confusing tricks with massive, last-minute changes to bills .
“This isn’t some kind of technicality, it’s a foundational principle and Gov. Whitmer’s veto is proof of her commitment to transparency and integrity in our legislative process,” Ananich said in a statement.
In her latest letter, Whitmer did highlight her own tax cut proposal. That includes a pause on the collection of sales tax on fuel purchases, plans to roll back retirement taxes and expanding eligibility for the Earned Income Tax Credit.
“With billions in additional revenue and a growing economy, we have a historic opportunity to negotiate a balanced, bipartisan budget that offers real inflation relief right now. Let’s work together to invest in our shared priorities like getting our kids back on track, funding local police, and fixing our crumbling roads and bridges,” Whitmer said.
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The big question is whether Whitmer and Republican leaders can find common ground before the end of the month on some kind of deal. While realistically legislators and the governor have until the end of the financial year in September to agree to a broader budget plan, technically everyone is supposed to find an agreement by the end of June.
Any agreement on sweeping tax cuts would be unlikely without at least the framework for a larger budget plan in place.
One area where it appeared Whitmer and lawmakers had some agreement was around gas taxes. Although the governor previously vetoed a cut to the 27-cent-per-gallon state tax, she has since indicated her openness to a pause on collecting sales tax.
In May, Senate Republicans and Democrats approved a summer tax pause plan. The measure would ensure the state temporarily stopped collecting the 6% sales or use taxes on gas and the per-gallon gas tax from mid-June through mid-September.
But, as of this week, the House had yet to take up the proposal. That’s because the administration is not on board with the current plan, said Sen. Aric Nesbitt, R-Lawton, one of the architects of the plan.
The Legislature has nine more planned days of House and Senate sessions before the start of its annual summer break.
Contact Dave Boucher: email@example.com or 313-938-4591. Follow him on Twitter @Dave_Boucher1.