MI Senate Republicans discusses revenue options

LANSING, MI – State Senate Republican leaders say it is possible to freeze the tax credit for working poor families without risking the loss of federal funds.

The Senate's top financial advisor told lawmakers Tuesday that Governor Granholm is technically correct in her argument that freezing the credit makes the state ineligible for some matching funds from the federal government. But the Senate Fiscal Agency says there are ways around that.

Republican Senate Majority Leader Mike Bishop says freezing the tax credit is necessary to restore money for K-12 schools. He says a House plan to fund schools by draining federal stimulus is irresponsible.

"The fact of the matter is - very clearly - it is what it is, if you use all the federal stimulus dollars this year, you won't have them next year," he says. "It creates a gigantic hole for the year to come and we think that's bad."

Opponents of the freeze say the state made a promise to working poor families to increase the credits.