LANSING, Mich. (WLNS) — Michigan Republicans are warning Democrats to let stand an automatic rollback in the state income tax rate triggered by the state’s large surplus.
The state is sitting on a $9.2 billion surplus. Under a 2015 law, once the state surplus reaches a certain level, the state income tax rate is automatically cut from 4.25% to 4.05%.
The Democrats who now control both chambers of the legislature have not committed to that automatic reduction. In a preemptive strike, the new House Republican leader warned Democrats to leave it alone.
“If the Democrats try to come in here and say, ‘We’re going to give targeted tax cuts so we’re going to eliminate this law that triggers a clean tax cut to everyone,’ they shouldn’t take money which is going to get an automatic income tax cut,” Rep. Matt Hall, R-Marshall, said.
Asked about the possible automatic tax cut, the governor said, “it’s premature to say that” it would happen.
“We haven’t closed the books from last year. I’m not going to speculate on what may or may not happen,” Whitmer said.
The state treasurer told lawmakers last week the books will not be officially closed until the end of March. Sen. Sarah Anthony, D-Lansing, said she hopes the state implement the automatic rollback but she has not officially signed off.
Hall advised the Democrats to do it now and work on other tax cuts later on.
“We can figure out ways to do both and then work together to figure out ways to give relief to seniors on top of that, and working families with the earned income tax credit,” he said.