State Budget Expectations

Governor Whitmer presented her first budget proposal to the House and Senate earlier this month. No doubt, you’ve heard and seen plenty of press on her proposal. Some key points include:

  • Raising the gas tax by 45 cents per gallons, to shore up funding for road repairs
  • Covering community college costs for qualifying high school graduates
  • Expanding the corporate income tax to cover s-corps (business groups offer their perspective)
  • Eliminating the so-called “pension tax” on government pension income
  • Increasing funding for schools, while at the same time funding more literacy coaches

Without a doubt, the most contentious point of her proposal is the 45-cent increase on gas. But how does this plan fit with the new gas tax rolled out in 2015? A recent mLive article laid all this out pretty clearly, including how our roads got to their present appalling condition. The oft-cited illustration of how that could hit your pocketbook, is that the average driver would pay an additional $216 in taxes per year ($307 for a truck). Of course, the impact to your business depends on the extent to which your business utilizes road transportation. Senator Jim Stamas appeared on Off The Record on March 8th to discuss the Governor’s proposed gas tax. Missed it? Watch it here.

While individual Senators and Representatives have already weighed in on various aspects of the budget, we probably won’t see much focused discussion until after the Legislature’s two- week break (Session break; legislators will be working in committees and in their home districts) the last week of March, and first week of April. So when will we have the state’s 2020—21 budget in place? Well, keep in mind that the Legislature missed several days due to inclement weather in February, and the Governor’s proposal was presented a little later than usual. We will likely be into summer before the budget is approved. One thing all concerned parties agree on, though, is getting the budget done right, as opposed to getting it completed by a stipulated date. We will keep you updated.

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