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untanglingwebs
El Supremo
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January 5, 2014 at 1:00 am
Michigan lawmakers call for state income tax cut
David Eggert
Associated Press
Lansing— Anticipating a sizable budget surplus, Republican lawmakers want to enact a broad-based tax cut for residents this election year — most likely a reduction in Michigan’s income tax.
While talks continue and no deal is imminent, the top tax writer in the GOP-led Senate said he soon will propose cutting the personal income tax rate from 4.25 percent to 3.9 percent over four years, which would return the levy to where it was in 2007. Republicans who control the House also hope to pass an income tax reduction.
The push for lower taxes comes a month before Gov. Rick Snyder unveils his proposed budget and after the state has collected hundreds of millions of dollars more than projected eight months ago. Legislators will return to session Wednesday after a monthlong break and on Friday will get a consensus estimate on revenues.
A surplus carrying over from last fiscal year and higher amounts expected to come in this budget year and next total nearly $1.3 billion thanks to an improving economy and factors such as lower-than-expected business tax refunds, according to the nonpartisan Senate Fiscal Agency.
Rep. Jeff Farrington, who chairs the House Tax Policy Committee, said it’s time to help individual taxpayers after lawmakers previously voted to reduce business taxes. He declined to release specifics but said an income tax change should be both “significant” and lasting, “not some gimmick.”
“It’s their money. I think some of it needs to go back to them,” the Utica Republican said.
The income tax rate dipped from 4.35 percent to 4.25 percent in 2012. It had been increased in 2007 under a budget-balancing deal and was scheduled to gradually drop back to 3.9 percent by late 2015.
When Snyder took office in 2011, however, he and fellow Republicans offset their $1.6 billion business tax cut with a $1.4 billion increase on individuals, which included taxing retirement income and not letting the income tax rate drop as much as planned.
“That was a promise we made to people in ‘07. I think that promise should be honored,” said Sen. Jack Brandenburg, a Republican from Macomb County’s Harrison Township. He plans to introduce tax cut legislation in the Finance Committee he chairs in January. The bills will call for dropping the rate a tenth of a percentage point each year starting in 2015 until it hits 3.9 percent in 2018.
Taxpayers could save more than $200 million in year one, which equates to about $45 on average per individual tax return.
The size of a tax cut will depend on the extent to which lawmakers emphasize other priorities such as public education funding and road and bridge maintenance.
Another unknown is Snyder, who may look warily at a major tax reduction after stabilizing the budget but also is up for re-election in November. With likely Democratic opponent Mark Schauer and critics highlighting his tax hikes on individuals, an election-year tax cut could prove helpful.
Snyder spokeswoman Sara Wurfel said he will wait until after the revenue-estimating meeting to talk specifics about any potential tax cut. She added that he’s “always open to and looking for ways that could best help Michiganders” while staying fiscally responsible.
Republican House Speaker Jase Bolger of Marshall hopes to cut taxes and boost spending on transportation and early childhood education.
“The first place I look when I hear the word surplus is returning it to taxpayers,” he said in a Thursday interview. Bolger said no tax plan has been finalized and he’s open to various options, but reducing the income tax is “certainly something I can support.”
Republican Senate Majority Leader Randy Richardville of Monroe, who in 1999 sponsored a law that gradually cut the income tax, said Friday that “it’s definitely time to consider a similar type of giveback.” He also listed education and roads as budget priorities.
To address concerns about putting the budget out of whack, legislators could add triggers to automatically pause a tax reduction if economic growth slows in the future or phase the cut in over more years.
“We need to make sure we can keep that promise over a long term of time,” Richardville said of steadily lowering the rate.
Democrats also have called for more investment in schools and lower taxes, though typically in the form of targeted relief. They want to reverse the decision in 2011 to tax residents’ pensions and other retirement income. They also are asking to restore credits, deductions and exemptions for low-income earners, children and middle-class homeowners that were reduced or eliminated by the GOP.
Key Republicans in the majority, however, say it’s fair to ask retirees to pay income taxes and prefer a broader-based tax reduction.
“I would hope that the governor would also be on board,” Brandenburg said. “It’s good policy and it’s good politics.”
From The Detroit News: http://www.detroitnews.com/article/20140105/POLITICS02/301050015#ixzz2pXATHS00 |
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Sun Jan 05, 2014 9:26 am |
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untanglingwebs
El Supremo
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Many years ago the cities agreed to cut certain business taxes in return for revenue sharing. Now after years of reductions, revenue sharing has been replaced with EVIP. The state proposes to eliminate the personal property tax for businesses which will cut even more into the ability of cities to generate income.
What are Flint's opportunities to raise their income tax when the state is moving to cut the state income tax?
How many more cities will slide into bankruptcy and how will these bankruptcies affect the credit and image o the state? |
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Sun Jan 05, 2014 9:33 am |
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untanglingwebs
El Supremo
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As the state continues to cut into the revenue stream of the cities, the state solution seems to be to cut away at retirement and retiree benefits.
Also, how can municipal employees save for retirement when their salaries and benefits continue to be cut. |
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Sun Jan 05, 2014 9:36 am |
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untanglingwebs
El Supremo
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The Ugly Truth Behind Michigan's Budget Surplus | The Nation http://www.thenation.com/article/166293/ugly-truth-behind-michigans-budget-surplus - 69k - Cached - Similar pages Feb 15, 2012 ... Gov. Rick Snyder's ruthless austerity measures have made the state a bleak
The Ugly Truth Behind Michigan's Budget Surplus
Gov. Rick Snyder’s ruthless austerity measures have made the state a bleak place to live, work and go to school.
Patricia J. Williams February 15, 2012 | This article appeared in the March 5-12, 2012 edition of The Nation.
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Michigan is a model of fiscal recuperation. At least that’s what the headlines said as I stepped off a plane in Detroit recently: its spending was slashed so ruthlessly in the past few years that the New York Times quoted a former state budget director as moaning, “We were so far down that the floor looked like up to us.” But now there is a budget surplus projected for 2013, of anywhere from half a billion to a billion dollars, with yet sunnier fiscal predictions ahead. This apotheosis is generally credited to the enactment of Republican Governor Rick Snyder’s stern austerity policies, which include replacing “a business tax with a corporate income tax that is expected to save businesses $1.5 billion a year,” according to the same Times article. “To make up lost dollars, lawmakers agreed to tax public workers’ pensions, reduce the state’s Earned-Income Tax Credit for the working poor, and remove or reduce other tax exemptions and deductions.”
On the ride from the airport, my friend Dee gave me an earful about what he described as “Snyder’s for-profit governance, while for us ordinary non-corporate humans, things just get bleaker.” The schools are decimated, he told me. Infrastructure is crumbling, zoos and parks are being eliminated, libraries closed and daycare all but nonexistent. Snyder has slashed funding for the state’s colleges and universities by 15 percent in the past year alone.
Moreover, Detroit is on the verge of financial ruin, in no small part because since 1998 it has been hobbled by a law requiring all cities to cut personal income taxes every year, for residents as well as nonresidents. Exemptions are given only if a city is in financial distress—a status virtually guaranteed by such cuts. “Financial distress” in turn triggers Public Act 4, an insidious law—detailed by Chris Savage on page 6 of this issue—that permits the governor to appoint an “emergency manager” (EM) whose job is, no joke, to displace elected officials and run local governments as though they were private, profit-driven corporations. Yet for all their considerable power, EMs lack the one thing that cities like Detroit need most (Republican dictum notwithstanding): the power to raise taxes. (Not that one would want a trickle-down executive branch boss like an EM tackling taxes, in addition to disappearing local legislative structures like city councils and school boards.)
EMs are balancing budgets by gutting government itself: selling off water and sewer lines (Flint), “redeveloping” public parks into private golf courses (Benton Harbor) and threatening to dissolve school districts (Highland Park). Detroit public schools, 80 percent of which fail to graduate any students with a college-qualifying ACT test score, have been taken over by GM’s former vice president for North American vehicle sales.
Meanwhile, in response to Governor Snyder’s recent intimation that funding for public universities may eventually depend on their graduation and student retention rates, the third-largest school in the system, Wayne State University, hastily revamped its admissions policy to include what a corporation might call “dashboard” measures that evaluate learning and retention as a matter of “value added.” “Value added” is a term widely introduced to the world of education as part of the Bush administration’s determination to turn learning into a business. Derived from economics and contract law, it ordinarily refers to the difference between production costs and sale price. While such arithmetic works well in the manufacturing of steel ball bearings, it’s somewhat less utile when grading an archaeology seminar or the translation of a poem.
“Value added,” snapped Dee, “is the ultimate emblem of a ‘knowledge economy’ rather than regard for actual knowledge.” He fears it will push Wayne State further from its mission as the only urban campus in the system, one that has historically served predominantly blue-collar students who may be working multiple jobs and supporting families while going to school. Like the City University of New York, Wayne State has served as a portal for generations of strivers whose circumstances might constrain them to a trajectory of eight, ten or even fifteen years to earn enough credits to graduate. Such hard-working students will now be written off as failures for dragging down the value-added goal of four-year graduation rates. The Detroit Free Press reports that in screening for applicants most likely to graduate in the requisite amount of time, Wayne State plans to create three groups: “those accepted, those who first need to complete an eight-week summer ‘bridge’ academic program, and those who will be counseled to attend a community college, trade school or even the military.”
Not surprisingly, many fear that students in Detroit’s already underserved public high schools will be passed over in even greater numbers as university seats are outsourced to wealthier students from out of town, from out of state or from other countries—from anywhere primary education is better funded.
But what of the budget surplus? I asked Dee. Surely that found money could be put to the rescue? Alas, no. Of more than $1 billion in cuts to school budgets last year, Snyder is restoring less than half—and not to per capita expenditure on pupils but for incentive programs. Schools that perform best will get the most money; those that “fail” could be eliminated. In other words, those with the most troubled students or least experienced teachers or children who speak little English or with high percentages of learning disabilities—those are the schools most likely to be assigned less assistance, less investment, less hope.
“Michigan’s future is dependent upon the education system,” says Michigan State Representative Jeff Irwin, who has called for funds taken from K-12 to be reappropriated. And to those in the Snyder administration who would prefer to squirrel the bulk of the surplus away for a rainy day, Peter Spadafore, who sits on Lansing’s school board, has a curt riposte: “It’s raining.”
Patricia J. Williams February 15, 2012 | This article appeared in the March 5-12, 2012 edition of The Nation. |
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Sun Jan 05, 2014 9:44 am |
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untanglingwebs
El Supremo
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Michigan State Legislators have a budget surplus this year
Saturday, January 04, 2014 11:02 a.m. EST by John McNeill
WKZO Radio
LANSING (WKZO) -- Members of the Michigan Senate Fiscal Agency say the state has an estimated one-point-three billion dollars more than it had last year to spend, thanks to higher than expected tax revenue.
Senate leader Jase Bolger of Marshall wants a tax break.
Others want to spend it on roads or schools. The governor will reveal his plans later this month or early next.
Kalamazoo City Commissioner would like to see a little of that money come their way, given that they have seen their revenue sharing from lansing cut dramatically, and the fact that they are having to trim jobs and programs to balance this year’s budget.
They will consider their spending plan for 2014 at their meeting Monday night. |
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Sun Jan 05, 2014 9:52 am |
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untanglingwebs
El Supremo
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Detroit Free Press
Michigan Gov. Rick Snyder takes heat over $500-million surplus in state's Rainy Day Fund
February 4, 2013 |
Gov. Rick Snyder is expected to recommend Thursday that the state add $50 million to $100 million more to its emergency fund.
Gov. Rick Snyder is expected to recommend Thursday that the state add $50 million to $100 million more to its emergency fund. / PAUL SANCYA/ASSOCIATED PRESS
By Paul Egan
Detroit Free Press Lansing Bureau
LANSING -- Most people agree that it makes sense for a state -- or a household -- to have savings set aside in case an emergency arises.
But as Gov. Rick Snyder prepares to deliver his third budget address on Thursday, the size of Michigan's Rainy Day Fund has become a subject of controversy.
The fund, more formally known as the Budget Stabilization Fund, contains slightly more than $500 million. And when he presents his 2014 budget to lawmakers, Snyder is expected to recommend that the state sock away $50 million to $100 million more.
Many liberals say tens of thousands of Michigan residents are still suffering following a historically drastic recession. They say now is the time draw on the state's savings account, not add to it.
"For lots of families, it is raining right now," said Gilda Jacobs, president and CEO of the Michigan League for Public Policy. "There really is the opportunity to take a portion of the money that is in the Rainy Day Fund and use it for families that are experiencing hardship."
At the same time, some conservatives say every dollar added to the Rainy Day Fund can be seen as a missed opportunity for reducing taxes. They say Snyder certainly should not be adding to the fund at a time when he's asking Michigan residents for more than $1 billion more a year to fix the state's roads and bridges.
"If you have $500 million sitting there in a bank account, why are you asking citizens to pay more taxes?" asked Scott Hagerstrom, state director of the Michigan chapter of Americans for Prosperity.
Budget Director John Nixon plans to stay the course, and he and Snyder won't be swayed by protests from the left or right, spokesman Kurt Weiss said Friday.
"You have to have a healthy Budget Stabilization Fund in order to show fiscal responsibility," Weiss said. "The credit agencies," whose ratings affect the cost of borrowing for the state, "look at that."
After a decade-long recession that tapped all of the state's savings and forced significant cuts in many areas, a debate over whether Michigan is putting too much into its main savings account is a good one to have. The fund, created in 1977, peaked at nearly $1.3 billion in 2000 and is now healthier than it has been since 2001, when it contained $994 million. It dipped to zero in 2003 and held $2 million through most of the years former Gov. Jennifer Granholm was in office.
Nixon wants a Rainy Day Fund equal to 6% of the combined revenues of the state's general fund and School Aid Fund, which now total about $20.8 billion, Weiss said. That means the administration's current target for the fund is about $1.2 billion, a goal that will not be reached this year, he said.
Rep. Joe Haveman, R-Holland, chairman of the House Appropriations Committee, said Nixon's approach of building up the fund makes sense.
"Don't we wish we had had it in 2009 and 2010?" Haveman asked. "That was a real rainy day."
He advocates a continued "slow and steady" growth in the fund.
House Minority Leader Tim Greimel, D-Auburn Hills, said that in an ideal world, the state would add as much to its savings as possible. He wouldn't necessarily draw on any of the $500 million that's now in the fund, but he said he's opposed to adding more to it for the 2014 fiscal year.
"The Rainy Day Fund is there for difficult budgetary times, and we're still in difficult budgetary times," Greimel said.
Instead of putting more money aside, Snyder should use excess funds to eliminate the pension tax or restore the $600 per child tax deduction, the Earned Income Tax Credit or the homestead property tax credit, he said.
"It doesn't make sense to be stockpiling money for the future when we need it now."
Thomas Wilson Jr., 65, a recently retired physical education teacher for Detroit Public Schools, said some of the $500 million the state has set aside should be spent immediately to improve education.
Concerns about a future economic downturn are hypothetical, but the state faces real problems today, and "people are suffering," Wilson said.
"I would spend it ... probably most of it," he said of the Rainy Day Fund.
Not all conservative voices outside state government agree with Hagerstrom's criticism of the Rainy Day Fund.
Michael LaFaive, director of fiscal policy for the Mackinac Center for Public Policy, said he agrees with budget officials in both state government and private industry who advocate setting aside a reasonable percentage of annual operating expenses as a reserve fund.
The danger, he said, is that when money is set aside, bureaucracies will create a rationale to spend it.
"All too often, that Rainy Day Fund looks like a drawer full of candy to children," LaFaive said.
He said he thinks Snyder could find other ways to cut spending in state government to come up with the money needed to fix Michigan's roads, meaning the state would neither have to raid the Rainy Day Fund nor hike gas taxes or registration fees.
Snyder and Nixon should stay the course and continue to rebuild the state's savings, he said.
"If it's raining, it's not raining like it has been, or could be again," he said.
Contact Paul Egan: 517-372-8660 or pegan@freepress.com |
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Sun Jan 05, 2014 9:58 am |
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untanglingwebs
El Supremo
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'Balanced budget,' 'surplus' gloss over many states' financial woes ... http://watchdog.org/5141/wirep-balanced-budget-surplus-gloss-over-many-states-financial-woes/ - 69k - Cached - Similar pages Mar 15, 2012 ... MADISON — What's in a “surplus” or a “balanced budget”? ... States will have to
Excerpt:
Michigan balanced its fiscal 2012 budget similarly to how lawmakers dealt with the Wisconsin budget and now has a projected $627 million surplus for the year that ends Sept. 30. But Michigan’s unfunded pension liability to its teachers alone is $18 billion, and that doesn’t include the cost of other retiree benefits or any pensions and benefits owed to state employees, said Craig Thiel, state budget expert for the Citizens Research Council of Michigan, a nonprofit that studies finance and government issues.
“Those are the big long-term liabilities that the state has,” Thiel said. |
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Sun Jan 05, 2014 10:04 am |
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twotap
F L I N T O I D
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| We all know that the libs would prefer dumping any surplus into lost causes like Detroit. If their is a surplus it means that the taxpayers are being taxed too much and should receive a refund. |
_________________
"If you like your current healthcare you can keep it, Period"!!
Barack Hussein Obama--- multiple times. |
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Sun Jan 05, 2014 10:24 am |
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untanglingwebs
El Supremo
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Michigan Republicans ready to buy votes by lowering taxes before the 2014 election
By Eclectablog on January 3, 2014 in GOPocrisy, Michigan Republicans, Taxes
They think you’re stupid and gullible. Don’t prove them right.
In February of 2012, I penned a piece titled “The tax timebomb that explodes in Michigan in 2012 is MUCH worse than you thought”. In it, I showed how Michigan Republicans raised taxes on over half of the people in our state. Worse than that, the brunt of the tax hit was borne by those at the lower end of the economic scale including our seniors.
My piece was based on a report by the Michigan League for Human Services (pdf) that had a couple of very telling charts in it.
Like this one that shows how business taxes plummeted by over $1.6 billion while personal income taxes went up by $1.4 billion:
There was also this one that shows the disparate impact on the poor:
[W]hen you look at the total state and local taxes as a percentage of income of those making $334,000 or more per year vs. those making $17,000 year or less, the poorest people pay 1000 times more than those at the top of the food chain. The poorest Michiganders pay 1.0% of their income vs. 0.001% for the top earners.
Other things from the report that you should know about the tax time bomb that explodes in Michigan in 2012:
•Despite continuous Republican screeching about “simplifying the tax code”, this new budget decidedly does NOT make it less complicated.
•Reduces the Earned Income Tax Credit (EITC) for the working poor from 20% to 6% of the federal credit – a 70% cut.
•Lowest 20% of income earners pay 9.1% of income in state & local taxes, top 1% pay only 5.6%.
•All major tax credits except the Homestead Property Tax Credit are now gone. Donations to food banks, shelters, and food kitchens: gone. Donations to charities: gone.
•Taxes are instituted or increased on private and public pensions for certain groups of senior citizens/retirees.
•Deduction for children in the family has been eliminated
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•Homestead Property Tax Credit (HPTC) has been taken away for over a quarter million Michiganders with incomes between $50,000 and $82,650. Seniors with incomes between $30,000 & $50,000 will have this credit reduced by 40%. Only half of the working poor that qualify for the EITC will also qualify for the HPTC.
At the end of the day, here’s a very important thing to remember: Thanks to the new Republican budget, 51% of all Michigan tax payer will pay MORE in personal income taxes in 2012 and beyond. Read that again. Over HALF of Michiganders will pay MORE TAXES because of the Republican budget. This is not Democrats. This is not even the Republicans of yesterday. This is, in fact, a mostly tea party-driven legislature who came in on a small government, less taxes bandwagon, tooting horns and banging tambourines.
The average tax hike on Michigan residents by the Republicans in their first year in office after the 2010 wave election was 23%. The spring before the 2012 election, they decided, in a act of benevolence only a true corporatist could love, to give back a bit and cut personal income taxes. By how much?
0.1%.
Heading into 2014 the state government, not surprisingly, finds itself with a budget surplus of $1.3 billion, almost exactly the amount they took from Michigan residents their first year. And, since it’s an election year, guess what? Yup, they’re talking tax cuts.
Michigan residents could be in line for an election-year tax cut, as the Senate Fiscal Agency estimates the state’s revenue picture has brightened by close to $1.3 billion over three years.
House Speaker Jase Bolger, R-Marshall, said the money belongs to taxpayers, not the state government, and lawmakers should look at tax relief ahead of any spending plans. He wouldn’t specify any tax cut plans, except to say cuts should be broad-based and benefit individuals as opposed to corporations.
Bolger said he wanted to first discuss the issue further with his caucus. Lawmakers return to the Capitol on Wednesday from their holiday break.
“I believe the House Republicans will look for tax cuts as we see signs our economy is improving,” Bolger said in a recent interview.
“We are talking about personal tax relief,” he said, listing investment in early childhood development and improving Michigan roads as other top priorities.
It’s interesting that Speaker Bolger thinks “the money belongs to the taxpayers” after he and his crew took that money — almost to the dollar — from taxpayers in the first place. In an election year when they will be slammed every way from Sunday for screwing over the middle class and the poor in our state, this pandering move is nothing more than a ploy to buy votes. They don’t need to give corporations tax cuts; they’ve already done that to the tune of over $1.6 billion. But, I can guarantee you that the poor and middle class folks in our state will not be seeing tax rates restored to their original rates. No, the Republicans will pull their same “fake concession” BS and give just enough back that they can point to it and say, “Look, we cut your taxes!”
But you’ll still be in the hole.
Don’t count on them returning the whole thing to taxpayers. That’s not how they roll. They’ll return a tiny percentage of it and claim that they are tax cutters despite reality. It’s GOPocrisy, pure and simple.
Don’t let them fool you. |
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Sun Jan 05, 2014 1:07 pm |
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untanglingwebs
El Supremo
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Sun Jan 05, 2014 1:09 pm |
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henryperr
F L I N T O I D
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| The latest fight over the CFPB involves a charge card hotline. The hotline would take grievances and other information directly from customers. The agency would compile the information and decide to act when appropriate. However, that is the kind of information is easily misused, which is why banks and card issuers want some restraints placed on how it could be used. This would help keep all
payday loan
data private. If you would like to avail a credit card and you can't decide what type, try visiting our website today. You will surely like a lot of information about the credit cards in our site. So visit our website today and choose what type of credit card you like. |
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Sat Jan 11, 2014 3:35 am |
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