After her 2022 State of the State visit, many Michigan legislators were open to Gov. Gretchen Whitmer's calls for tax reduction and return to in-person learning, but lawmakers of the Republican-led Legislature expressed optimism.
Whitmer, who is in her first year in charge, has laid out her policy agenda on the 185th anniversary of Michigan's statehood. Whitmer has urged the state legislature to reduce taxes, increase education funding, reduce the cost of insulin, and reduce the cost of electric vehicle purchases.
Another day before, she was invited to a private equity event to get a boost in Michigan. The deal is supported by $824.1 million in state incentives and is expected to create 4,000 jobs.
General Motors profited from that, which was quickly ushered through the Legislature with significant bipartisan support. It was created to make Michigan more competitive after Ford Motor Company snubbed the state for an $11.4 billion electric vehicle investment.
As the state continues to deal with the COVID-19 epidemic and a host of other problems, House and Senate leaders are retook momentum.
Unfortunately, Gov. Whitmers big moment tonight did little but celebrate others accomplishments and look backward toward things that have already been done or are already in the works, said House Speaker Jason Wentworth. Were pleased to have her support, and we will definitely take her up on her offer to work together. But I think we all were all hoping for a little more from this speech.
The legislative democracy, on the other hand, said the speech detailed the difficulties that Michigan residents have faced while offering a long-term solution.
Im very optimistic following this post, because its very easy for any Michigander to think about the last two years and just think about the really tough times that weve lived through, said Sen. Jeremy Moss, D-Southfield. But this was a speech that reminded us that we endured, and that we made it through the other side of this.
As Whitmer and legislative leaders prepare for a challenging election cycle this fall, reaching consensus might be more of a challenge. But some of the governor's main priorities moving into 2022 overlap with legislative Republicans, and some lawmakers say there's room for common ground.
Whitmer's main suggestions during the speech included an abrogation of Michigan's so-called "pension tax" and increasing a tax credit for low-income workers from 6% to 20%, reversing the tax reforms she had used in 2011.
The Earned Income Tax Credit gives working people access to a portion of state income based on their income and their dependents. Increasing the tax refund to 20% would give an average tax refund of nearly $3,000 to over 730,000 working people.
Whitmer intends to exempt public pensions and restore deductions for private retirement income.
Lawmakers on both sides of the aisle said they were sympathetic to the idea of decreasing income taxes for seniors.
I've always supported putting money back into the pockets of taxpayers, said Senate Appropriations Chairman Paul Stamas, R-Midland, in a statement. We want to find a way to provide relief, knowing that our current level of revenue is not sustainable, with much being one-time federal funding.
Rep. Matt Hall, a House tax policy committee member, said he's concerned about some of the governor's actions, including his desire to seek an earned income tax credit. He said he prefers seeing larger tax cuts that aid more Michigan residents, especially considering rising inflation and the state's current revenue surplus.
We must look at cutting taxes so that federal dollars have allowed for an injection of funding and provided a chance to assist, Hall said.
Donna Lasinski, a House Democratic leader from South Carolina, said that because to the ongoing workforce shortages resulting in the epidemic, the earned income tax credit is "one of the most reliable measures that you can take to encourage people to return to the workforce, to assist them up the career ladder, and to motivate others to work."
Thats just what we need here in Michigan to continue to grow our economy, unless we have a tax reduction that works, she said.
The governor outlined in her speech that she wants students to return to in-person instruction, but no suggestion that schools that have gone virtual would be required.
Before the epidemic, Whitmer canceled in-person classes for high schools, but has avoided issuance of orders.
Rep. Graham Filler, R-DeWitt, said he appreciates Whitmer's assistance for in-person learning, but said the administration must adopt a stronger approach as some districts continue to use remote options.
Its been an absolute battle...not just here in Michigan, but across the country, to keep schools open, he said. I want her to use that bully pulpit to tell schools that at all costs, please be open. Because kids have just taken it on the chin.
Moss said he admires the governor's recognition of the students in Oxford who were shot during a school shooting in late last year, but believes the next step is to pursue bipartisan solutions that would combat gun violence in schools and elsewhere.
We need to talk about ways to combat gun violence in and around our communities, he said.
Prior to the governor's speech, Senate Majority Leader Mike Shirkey, R-Clarklake, criticized the administration's response to the pandemic, urging Whitmer to make their own decisions to bring the state back.
We received the opportunity to make the right decision because of ineffective, tone-deaf leadership in Washington and the governor's home, Shirkey said. Informing, inspiring, and trusting people to make the right decision has been replaced by unreliable, often unjust executive orders based on a common theme of fear.
Shirkey's 2022 objectives included investment in infrastructure, significant tax reductions, and the continued resistance to pandemic-related school closures in local K-12 districts.
Out of policy concerns, the governor and Legislature have yet to work through how to invest billions in federal pandemic assistance and a current state revenue surplus. $7.1 billion in federal COVID aid is still available to lawmakers and the governor to negotiate.
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