(Source: MIRS.news, Published 11/27/2023) MoReno Taylor II, the executive director of the Fund MI Future coalition, would "comfortably say" Michigan needs $10 billion in additional revenue, annually, to address all of Michigan's public infrastructure and education needs.
To put that $10 billion in perspective, Michigan earns a little more than $10 billion a year from the sales tax.
"Now, mind you, there's stuff out there we still don't even know about at this point," Taylor said, later saying he believes "a lot of folks are now more aware of inflation, and so when we say 'Hey, we're making record investments here' or '. . . making record investments in this,' we have to acknowledge the fact that those dollars don't go as far as they used to. And so, while these one-time federal dollars or one-time supplemental appropriation dollars are great, what we are trying to make sure folks understand is this is a structural revenue issue."
Taylor's Fund MI Future coalition involves multiple groups, like environmental organizations such as Clean Water Action, BlueGreen Alliance and the Sierra Club's Michigan chapter; labor groups like the Service Employees International Union (SEIU) in Michigan and policy-change advocates such as Progress Michigan and the Michigan League for Public Policy.
From Nov. 10-16, EPIC-MRA conducted a poll commissioned by the coalition finding, when first asked if they supported or opposed increasing the state's corporate income tax (CIT) rate to provide extra state public infrastructure money, 60% of 600 respondents approved of the idea.
No dollar amount was attached to the question.
Among respondents to the initial question, 39% of survey participants strongly backed raising Michigan's CIT rate, 32% opposed it and 88% of Democratic respondents supported the idea. Meanwhile, 55% of participants who identified as independent expressed supporting the increase, as well as 33% of Republicans.
When told through the poll that "currently, individuals in Michigan contribute more than 85 percent of state revenue collected in taxes compared to 3.5 percent of that total paid by corporations, even with many of them posting record profits," the group of respondents who backed an increase jumped to 70 percent.
"We just kind of thought, at some point, we should get a baseline for what public support for increasing corporate income taxes looks like, and honestly, I was a little shocked," Taylor said about the EPIC-MRA poll results. "We've said for a while that Michigan residents are maybe a little smarter than our elected officials give them credit for."
In Fiscal Year (FY) 2021, Michigan's CIT – with a present-day rate of 6% – accounted for $1.6 billion – all going into the General Fund. Meanwhile, the 4.25% income tax rate in FY '21 contributed $11.9 billion to Michigan’s revenue, with 72% dedicated to the General Fund and 28% deposited into the School Aid Fund.
According to Taylor, increasing the CIT rate alone will not provide Michigan with $10 billion in additional annual revenue. Moreover, he brought up proposed "polluter pay" legislation, requiring owners of polluted sites to pay for land and water restoration after they've abandoned a property or declared bankruptcy.
"We're working on several things, including 'dark stores reform.' This is a huge issue for local governments all across the state of Michigan … you have a lot of these big-box stores coming back after the fact asking for (adjustments to their tax assessment), and in many instances, those dollars come right out of local communities, forcing them to close their libraries, community recreation centers … " Taylor said.
He added that a study conducted less than a decade ago found that tax assessment adjustments for big-box stores like Target and Walmart resulted in a cost impact on local communities worth more than $2 billion within two years.
Through the passage of HB 4001, the Democratic-led Legislature committed $460 million in available CIT revenue to the Strategic Outreach and Attraction Reserve (SOAR) Fund in FY '23, $465 million in FY '24 and $500 million in FY '25.
The SOAR Fund was designed to attract large-scale economic development projects into Michigan from corporations.
Taylor shared he was not one of the biggest fans of that announcement, especially because it was one of the first things done when the Democratic Trifecta took its leadership posts in Lansing.
"I'm not the only one who sort of felt a little taken aback by that … at least, seeing things sort of slow down and watching the conversations that are progressing about how do we make economic development more impactful at the local level, how do we make sure that our local communities are not being left behind … we're all here for that conversation," he said.
