(Source: MIRS.news, Published 02/06/2023) Gov. Gretchen Whitmer said Monday Michiganders can expect $180 "inflation relief checks" as part of her broad tax relief package, a state expense that is expected to pull $800 million from the General Fund.
The "Lowering MI Costs" plan was introduced on Friday afternoon and expanded upon during a Monday morning press conference with House Speaker Joe Tate (D-Detroit) and Senate Majority Leader Winnie Brinks (D-Grand Rapids) after Whitmer previewed the plan during her State of the State address.
Whitmer confirmed the inflation relief checks would be funded by the General Fund, and when asked what the price tag would look like, Whitmer said $800 million.
That is the same amount the Governor proposed moving from the General Fund to the Strategic Outreach and Attraction Reserve (SOAR) fund last Tuesday, a move that would permanently fund SOAR, but could stop the activation of a 2015 trigger that would roll back the state income tax rate from 4.25% to 4.05%.
When asked if the inflation relief checks are intended to take the place of the potential income tax decrease, Whitmer's communications director Bobby Leddy said it's "too early to speculate" about whether the trigger will be activated until later in March.
"What this does is it delivers relief to folks this year, instead of a change in income tax this year that would deliver relief next year," Leddy said. "People are going to see checks starting in the spring and summer, and they're going to see significantly higher numbers of relief than they would otherwise."
Leddy added that interpretation of the 2015 law has been unclear, and Whitmer's office will not speculate about a potential rollback, "but we're not touching the income tax trigger law."
In response to the announcement, House Minority Leader Matt Hall (R-Kalamazoo) said the failure to rule out blocking the automatic income tax rollback is concerning.
"Gov. Whitmer says there are no secrets or surprises in her proposal, so why won't she show it to legislators or the people of Michigan?" Hall asked, adding that Michiganders shouldn't give up a permanent tax cut for a one-time payment of $180.
A Michigan Rising Action release called the checks "lowly," adding that they'll be sent out based on a tax return filed with the state, so married couples who file jointly would get a single $180 check, while separate filers who live together would each receive an individual check.
The group said the payment is much smaller than others pushed by Whitmer in the past, including "$11,000,000,000 in known fraudulent unemployment scams."
Eric Ventimiglia, executive director for Michigan Rising Action, said "inflation costs the average Michigan household an extra $460 per month."
"The paltry $180 checks will barely cover 11 days worth of added inflationary costs and won't begin to provide any meaningful relief to struggling Michigan families," he said.
When asked how the $180 was decided on, Whitmer's response was, "math."
All three pieces of tax relief combined provide significant relief to Michiganders, she added, when asked to elaborate.
Senate Minority Leader Aric Nesbitt (R-Lawton) disagreed, referencing the $9 billion surplus.
"We should be doing more than handing out a one-time annual rebate check that equals 49 cents per day," he said.
Hall said the shift to rebate checks from the initially proposed SOAR investment is a result of public outcry and Republican efforts.
"However, there's still so much we don't know, and we need to protect the permanent, ongoing relief that's teed up for Michiganders and small businesses," he said.
Leddy said Whitmer's office considers the SOAR track as separate from the tax credit track, but when asked if the points outlined in Whitmer’s speech are the only things that will be included in the tax relief package, a long pause and sidelong glance was followed with, "for now, those are the three points."
"I think we'll have to see what they negotiate in the Legislature, but those are the three points that we put forward today," Leddy said.
The other two points mentioned by Whitmer in her tax relief package were a "retirement tax" repeal and an increase to the Earned Income Tax Credit (EITC), now referred to as the Working Families Tax Credit.
On Friday, a joint press release highlighted that nearly 500,000 households will be benefited by an average of $1,000 yearly through the tax cut for retirees.
Today, Whitmer's team confirmed that there will be exemptions for both private and public pensions, though the specific numbers for both are still being worked out by the Department of Treasury.
Whitmer said the rug was "ripped out from them (retirees)" when exemptions were removed in 2011 under former Gov. Rick SNYDER, but equalizing private and public pensions will allow all Michiganders to keep more.
As for the "Working Families Tax Credit," Whitmer again said the plan will put $3,200 on average into the pockets of 700,000 Michiganders by raising the credit to a 30% federal match. The $3,200 credit is the average amount of both the federal and state credit.
The tax credit increase will also be retroactive to 2022, Whitmer confirmed.
She called the plan the "largest tax break for working families and seniors in Michigan in decades."
The vessel for the tax relief plan will likely be HB 4001, which was non-conferred and sent to a joint House-Senate conference committee, which is likely to meet later this week.
When asked how soon a conference committee can be expected, Leddy said his office is not speculating. House Democratic Spokesperson Amber McCann said the earliest she would expect a committee is Wednesday.
