MI income tax rollback bill voted out of House committee

Feb 16, 2017

State House Republicans are aggressively pushing through an income tax cut and rollback, despite numerous questions raised during a committee hearing about what funding cuts could happen in other areas if the bill passes.

A bill that would cut the state income tax and eventually phase it out altogether over 40 years was voted out of committee Wednesday. This happened after an hour and a half of testimony and over requests to hold off on a vote from some Democratic members.

Republican Rep. Martin Howrylak is on the Tax Policy committee, which OK’d the bill. He says he’s in favor of tax reform, but the bill is moving too fast. “We need to have more than, you know, an hour’s worth of testimony,” Howrylak says. “And more importantly, I think there’s a better way of balancing out tax relief.”

But committee chair Jim Tedder said the issue of tax cuts is philosophical, and he doesn’t think additional time for testimony or deliberations would change any minds. “The sooner we can rollout this policy plan, the better our colleagues in the House, the Senate, and our friends in the governor’s office can work toward achieving meaningful cuts that deliver meaningful reform to Michigan’s tax payers,” Tedder says.

Supporters of the plan like Tedder say they aren’t worried about balancing the budget down the road.

The looming budgetary question comes after the nonpartisan House Fiscal Agency determined that the plan would save taxpayers (and remove from the budget) $1.1-billion during its first full fiscal year in 2019.

State treasurer Nick Khouri says the tax cuts need to be discussed in tandem with appropriations committees to figure out how to fill that hole in the budget during the first full year the cut would take effect, as well as the multi-million dollar holes in years after.

“The fundamental question is never should taxes be too high or too low,” Khouri states. “The question is what’s the right level, what’s the right combination of services that increase standards of living for all Michiganders.”