Gov. Gretchen Whitmer and Democratic leaders in the legislature have reached a deal on a series of tax cuts, according to a press release from the Governor’s office.
“Today, we are excited to share details on the Lowering MI Costs plan, which is a bold relief plan that delivers the largest tax cut in decades to all taxpayers in Michigan,” Whitmer, House Speaker Joe Tate, D-Detroit and Senate Majority Leader Winnie Brinks, D-Grand Rapids, said in a joint statement.
Details of the plan were not immediately offered, however. The release said the framework of their deal would “deliver inflation relief checks to all Michigan taxpayers” without providing specific amounts.
Their statement intimated that the package would include the long-planned repeal of income taxes for most retirement income and an expansion of the Earned Income Tax Credit that have been objectives for the legislature since the beginning of the year. Versions of those policies passed both chambers late last week, but have since stalled amid disagreements over the particulars.
MLive had previously reported that Whitmer’s office had proposed diverting about $800 million this year into an economic development fund in order to avoid a trigger built into a 2015 law that would automatically roll back the income tax.
Response from some Democrats in the legislature to the idea had been tepid, and sources close to the negotiations said a transfer to the Strategic Outreach and Attraction Reserve fund were no longer being considered, and that the deal would involve either paper checks or a direct deposit to taxpayers’ bank accounts.
Direct payments hadn’t been part of negotiations before Friday, another source told MLive, claiming the approach was broached in order to reach agreement between legislative chambers. Democratic majorities are razor-thin, requiring the full caucus to be on board for some votes that don’t have bipartisan support in the House.
“Right now, inflation has driven the cost up on everyday goods, which is squeezing household budgets and forcing families to forego necessities,” the leaders said in the release. “That’s why they sent us to Lansing to lower costs and put more money back into people’s pockets.”
Senate Minority Leader Aric Nesbitt, R-Porter Township, said in a statement his caucus is “cautiously optimistic” following the announcement of the Democrat’s tax deal, but are hesitant to believe Whitmer will follow through with the plans in the future.
“When it comes to lower taxes, her actions have too frequently failed to match her words,” Nesbitt said. “Michiganders have too often played Charlie Brown to the governor’s Lucy as she yanks away her promises of tax relief at the last second.”
House Republicans, however, seemed slightly more pessimistic on the process.
Rep. Sarah Lightner, R-Springport, said in a statement that Whitmer had a history of “proposing superficial ideas that sound good on the surface” that lacked follow through, seeming to take a dig at the $500 tax rebate floated by Democrats last term as a method of financial relief for residents.
She called the inflation relief checks a “ploy to distract people from the permanent income tax rollback she’s blocking.”
“The governor and the Democrat majority crafted this deal behind closed doors and announced it to the public without many details,” Lightner said. “I would be very interested in having a committee hearing to discuss it in public and give others the opportunity to weigh in. Unfortunately, with a shell bill already in place, I think the Democrat majority will bypass the traditional process again and force a vote without a chance for others to thoroughly review the details.”
Reporters Alyssa Burr and Jordyn Hermani contributed to this article.
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