LANSING, Mich. (WXYZ) — On Friday, the state of Michigan will hold a conference and share estimates of just how much tax revenue it expects to take in this year.
It is an unusual situation. Between pandemic-inspired federal funding increases and inflation’s higher prices increasing sales tax revenues, the conference is expected to show the state has billions more than at one time expected.
It is leading to a fight? What should be done with the money?
Democratic Gov. Gretchen Whitmer sent a letter to the Legislature Thursday morning proposing what she calls the “Michigan Tax Rebate Right Now” plan. She wants to send $500 to Michigan’s working families.
The Republican-controlled Legislature passed a bill Thursday afternoon that would not include the one-time $500 tax rebate.
“Who would have thought we would have billions in the bank and that is causing problems?” state Rep. Joe Bellino, R-Monroe, said.
Bellino represents parts of Wayne and Monroe counties. He said Republicans want a long-term income tax rate cut from 4.25% to 4%.
“The $500 check is going to look very good to a lot of people. But me, as an addict in recovery, if you offered me years ago 1 gram today or 5 grams tomorrow, I would take the 1 gram today That is how we are in America. We want the excitement right now. But if we take our time, pass this tax cut. We are going to save a lot of money over the years,” Bellino said.
The governor vetoed a similar, but larger, income tax cut rate before saying the short-term surplus didn’t warrant that long-term cut. She warned it could create fiscal problems for the state.
Republicans say lower taxes lead to economic growth.
“We need to put money back in people’s pockets and grow our economy,” Bellino said.
