LANSING (WKZO AM/FM) — The Governor has come to terms with legislative leaders on a tax cut deal that clears the way for budget talks to go forward.
The negotiated agreement settles what the state will do to address a quirk in the Federal Tax Reform bill that would have eliminated the personal exemption from Michigan Taxes.
Enhancing it has been the goal of majority Republicans anxious to provide a tax cut to voters in an election year.
The Governor wanted it set at $4500, the Senate wanted to raise it to $5000 and the House to $4800. They split the difference and set it at $4900, but it will be phased in over the next three years
In 2018, the exemption would be $4,050. It would increase to $4,400 in 2019, to $4,750 in 2020 and finally to $4,900 in 2021.
Included in the deal; the elimination of the Driver Responsibility Fee this October, settling another difference between the two chambers. Anyone still owing the state fines and fees will have the bill wiped out.
Speaker Tom Leonard thinks it’s a good compromise.
Kalamazoo Democrat Jon Hoadley says this has more to do with fall elections than good public policy. Hoadley supports doing away with the Driver Responsibility Fees however.
Governor Rick Snyder and Senate Leader Arlan Meekhof have both issued news releases supporting the deal.
The Michigan League for Public Policy says the loss in state revenue could mean future cuts in state programs that the public relies on. Those losses won’t kick in until after all the Lawmakers who approved them are long gone.
MLPP CEO Gilda Jacobs says the “juice is not worth the squeeze”.
Votes on parts of the deal have already begun to take place.
