As the financial debate gets underway in earnest in Lansing, a couple of Southwest Michigan Senators have weighed in heavily in favor of Governor Rick Snyder’s proposed plan to preserve the personal exemption on the state income tax, and providing additional tax relief for Michigan families.
State Senators John Proos and Tonya Schuitmaker have both announced support for the new legislation in the form of Senate Bill 748, with Proos saying, “As Michigan’s economy continues to grow and create jobs, we owe it to our hardworking residents and small businesses to provide them with well-earned tax relief.” He adds,“I am a strong supporter of new Senate legislation that will ensure that Southwest Michigan taxpayers can continue claiming the personal exemption on their state taxes while also giving them an additional tax break that is responsible and affordable.”
Schuitmaker actually co-sponsored the legislation that would restore the Michigan personal tax exemption that was lost in the recent federal tax reform, saying, “This legislation would ensure the state’s personal exemption remains regardless of changes on the federal level.” The Lawton Republican adds, “Additionally, the bill increases the personal exemption amount and would put more money in the pockets of taxpayers.”
The federal Tax Cuts and Jobs Act signed by President Trump last month simplifies the code, lowers tax rates, doubles the standard deduction and increases family tax credits. However, in streamlining the exemption process, it effectively ends the federal personal exemption. Since the state personal exemption is based on the federal return, without a revision to state law, Michigan taxpayers would no longer be able to claim personal exemptions on their state taxes.
Senate Bill 748 would make the necessary changes to maintain the state personal exemption and also boost the exemption by an additional $500 to $4,800 by 2021. Currently, the state personal exemption is scheduled to increase from $4,000 to $4,300 over the next three years.
Proos says, “This reform will help prevent a $1.5 billion tax hike on Michigan families and also put more money back into their pocketbooks.”
State fiscal leaders from the Senate, House and executive branch and economists from across the state met Thursday for the annual January Consensus Revenue Estimating Conference at the Capitol. Their economic and tax revenue projections are used to draft budget proposals for the next fiscal year, which will begin Oct. 1.
For the current 2018 fiscal year, state fiscal officials forecasted that Michigan will have $571.7 million more in total revenue than budgeted for last summer.
As a result, Proos says, “Michigan is once again projected to have a significant budget surplus, which offers us a chance to invest in key priorities and reduce the burden on all Michigan taxpayers.” He notes, “As a member of the Senate finance and appropriations committees, I look forward to helping enact this important tax relief as we begin the new state budget process.”
Schuitmaker contends, “Not only does this plan ensure Michigan residents are able to keep this much-needed exemption, it also includes an increase in the personal exemption to $4,800 — going above and beyond the $4,500 recommendation of Gov. Rick Snyder.”
According to Senate Finance Committee Chairman Jack Brandenburg, the sponsor of SB 748, the committee will hold a hearing on the bill next Tuesday, January 16th.
Schuitmaker says, “There has been a lot of uncertainty regarding the federal changes and what they might mean for Michigan residents,” and adds, “Now that our budget has begun to stabilize and we’ve approved numerous reforms that have drastically improved the state’s financial outlook, it is time to give relief to families throughout my district and our state.” Stay tuned.