LANSING, Mich. (WOOD) — Gov. Gretchen Whitmer is touting Democrats’ tax reform plan, which also includes an inflation relief check, as “meaningful relief” for Michigan families.

“When you add up all the pieces of relief, what you see here is a real effort to make sure that we are strategically helping people that are struggling,” Whitmer said at a Monday morning news conference in Lansing. “As we looked across what we could do that would be helpful to people, this was the biggest way that we can really make a difference in people’s lives and keep money in their pockets.”

The plan would boost retirees’ incomes by repealing and standardizing the income tax on pensions, which Democrats say would save about 500,000 households $1,000 annually. The expansion of the working families tax credit (you might know it as the earned income tax credit) from 6% to 30% would give more than 700,000 households $3,150 in tax credits annually, Democrats say.

A new element first floated Friday afternoon would send a one-time direct payment to all people who file taxes. Whitmer said Monday that check would be for $180 and that it would be in your hands right after approval from the Legislature — assuming it is granted.

“Having been a Senate minority leader, I can tell you there will probably be a lot of votes on both sides of the aisle because people will see that when you’re helping retirees living on fixed incomes and you’re helping working families who are working full time but struggling to get ahead, and you’re putting money back in the pockets of all Michiganders, that’s something that we’re hearing a resounding enthusiasm for,” Whitmer said.

State Sen. Aric Nesbitt, R-Lawton, said in a statement that he’s concerned the limited tax cut for retirees will leave out two-thirds of Michigan’s seniors.

“We should be working together to help all seniors and all families with ongoing tax relief,” his statement said in part. “Republicans have proposed tax relief that will benefit all seniors, income tax reductions for all Michiganders, and $500 child tax credits to help struggling families. Democrats continue to push plans that pick winners and losers and seem to think one-time checks are a substitute for ongoing tax relief.”


So what, if anything, does Democrat’s plan have to do with the automatic state income tax rate rollback? Under a 2015 law, once the state’s surplus hits a certain level, the income tax rate should automatically drop from 4.25% to 4.05%. Republicans have accused the governor of trying to do away with that rollback, which her office denied.

Asked if the $180 check was meant to replace the income tax rollback, Whitmer said her plan would offer quick relief.

“This $180 check dwarfs any help that doing nothing and hoping something that may or may not go into effect might assist people,” Whitmer said. “We know that doing nothing will only give about $16 in relief to a single woman who is raising a family on $30,000 a year — $16 bucks over 52 weeks. That’s 30 cents a week. That’s not meaningful relief. Putting $180 in her pocket fast and then changing the earned income tax credit to the working families tax credit and boosting it to 30%, that’s thousands of dollars for that same taxpayer. … This is how we give people who really need it the real relief right now and fast.”

Asked if that meant the rollback wasn’t going to happen, Whitmer said, “We’re not touching any sort of a trigger.”

“I can just say that when we focus on these three methods of putting money back in people’s pockets, we can guarantee it gets there, we can move fast and it’s a heck of a lot more meaningful for folks,” she continued.

Earlier, a spokesperson for the governor indicated the rollback that may be triggered would only be in place for one year and then would have to be reviewed. If the state wasn’t still awash money, the income tax would revert to the current 4.25% rate rather than continuing at 4.05% in perpetuity, as the GOP has claimed.

State Sen. Roger Victory, R-Georgetown Township, disagreed with Whitmer’s administration’s perspective on how the rollback would work.

“We’re looking at a 20 basis points rollback, serious tax relief for all Michiganders that pay the income tax component and I look at that as ongoing,” Victory said.

He said he would be back in Lansing Tuesday to “dig in” to the matter.

Though Democrats hold majorities in both chambers of the state Legislature, they will need Republican votes to give any plans immediate effect.

House Republican Leader Matt Hall, R-Richland Township, said in a statement that Whitmer is “starting to follow Republicans’ lead in calling for immediate, fair relief for the people of Michigan,” but is still considering blocking the income tax rollback.

“The governor once again refused to say whether she’ll attempt accounting tricks to obstruct the permanent income tax cut that’s headed to every Michigander and small business. She either isn’t familiar with the details of her own plan, or she’s trying to hide a secret tax hike from the people. Why would the people of Michigan give up a permanent tax cut for a small, one-time payment of $180? Gov. Whitmer must stop dodging and start delivering real, permanent relief to Michigan families,” his statement read in part.

—News 8’s Corinne Moore and Rachel Van Gilder contributed to this report.