(Source: MIRS.news, Published 11/13/2024) A conversation-starter proposal to raise the state’s 6 percent corporate income tax (CIT) to 10 percent with the additional revenue going to give public school teachers an estimated $20,000-a-year raise was circulated on the House floor Tuesday for co-sponsorship. 

Rep. Dylan Wegela (D-Garden City) was hopeful he could get fellow members to sign on to his plan to effectively blow up the Governor’s Strategic Outreach and Attraction (SOAR) Fund and direct more than $2.4 billion more to the School Aid Fund. 

However, the first-term lawmaker conceded to reporters Tuesday that he invited his colleagues to join him for press conference at his office to announce this bold plan, but there were no takers. Rep. Emily E. Dievendorf (D-Lansing) did co-sponsor his bill, HB 6105.

Wegela said he understands his colleagues' hesitancy to jump aboard, given the “culture of fear and intimidation in Lansing.” 

“I can understand why people might support this on principle but might be afraid that it could affect their chances of getting a bill or priority done in lame duck, which is unfortunate that our government works that way,” he said. 

Currently, the first $1.2 billion of CIT tax revenue goes to the General Fund. The next $50 million goes to the Community Development and Housing Fund. The next $50 million goes into the Revitalization and Placement Fund and the next $500 million goes to the SOAR Fund. All additional money goes to the General Fund. 

Wegela’s plan would still steer the first $1.2 billion of CIT tax revenue to the General Fund. The next $50 million would still go to the Housing Fund. Everything else would go to the School Aid Fund. 

The Consensus Revenue Estimating Conference (CREC) estimated the CIT bringing in $2.2 billion in Fiscal Year (FY) 2024. Collection numbers reported by the House Fiscal Agency for September, the last month of the fiscal year, had CIT revenue coming in at $2.117 billion. 

Wegela believes the higher CIT would mean $2.4 billion more for schools. 

According to the National Education Association, Michigan pays its starting teachers a $40,302-a-year salary, which is 41st in the country. 

“Over the past several years, we have seen billions of taxpayer dollars funneled to multi-billion corporations,” he said. “This has only exacerbated our historic levels of wealth inequality. We live in a nation where three people have more wealth than the bottom half of Americans. 

“It is our responsibility as representatives of the people to ensure taxpayer dollars stay in public spaces like our schools,” he added. “This ensures that we are investing in the future of all Michiganders, instead of lining the pockets of shareholders and CEOs.” 

Reacting to what amounts to a 67% increase in the CIT, Michigan Chamber of Commerce spokesperson Sara Wurfel said her group strongly opposes the tax hike. She argued that instead of sending a signal of economic vitality, hiking business taxes sends a signal that Michigan is not open for business. 

“This reckless and misguided proposal poses a risk to Michigan’s employers and their ability to create and sustain jobs, which ultimately harms workers and communities alike too,” Wurfel said. “Michigan has already fallen behind compared to surrounding states as they continue to develop more competitive tax policy.”