Budget Process Moves Ahead
This week was a newsworthy one here at the Capitol. The Senate, with a necessary tie-breaking vote by Lieutenant Governor Brian Calley, passed House Bill 4361, the legislation that makes a number of reforms to Michigan’s business and income taxes.
The bill contained a number of provisions, with the business and pension tax receiving the most attention. The bill passed by the Senate contained $1 billion in tax relief for small businesses by repealing the Michigan Business Tax and replacing it with a six percent income tax on C-corporations. The other major component, which will raise $300 million in revenue, was the changes to the income tax exemptions on certain types of retirement and pension income. Under current law, only private pensions and unmatched income on 401(k) plans over $45,120 for an individual or $90,240 for a couple are taxed. For a detailed look at these changes, click on Pension Chart, which was developed by Senator Bruce Caswell.
This Monday, the Consensus Revenue Estimating conference will be held. It is predicted that for FY 2012 there will be a surplus of $500-$600 million. With these estimates, Coalition staff expects House and Senate leadership to set revenue targets with conference committees to meet soon after. Will the Legislature have a budget in place by Governor Snyder proposed May 31st deadline? The Coalition will continue to keep you updated.
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