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No Huge Budget Hole In Michigan's Future

Sep 10, 2014

Lawmakers approve bill to avoid $1 billion budget hole

Credit wikimedia commons

It looks like Michigan will not face a $1 billion budget hole due to a recent state Supreme Court ruling after all.

The state Senate overwhelmingly passed legislation on Wednesday to fix the issue, less than 24 hours after the bill cleared the state House.

The Supreme Court decision dealt with changes the Legislature made years ago to the Michigan Business Tax. It allowed many out-of-state businesses to dramatically reduce their tax bills.

This new bill would fix the issue and apply it retroactively, so the state can avoid having to pay out up to about $1 billion in tax refunds.
"We never intended them to be able to do this," said state Sen. Mark Jansen, R-Gaines Twp.

"I've been here since 2007. I was in the debates with Gov. Granholm, the MBT, all of that process. That is not what we intended them to be able to do."

But a handful of lawmakers are not so happy about the Legislature's attempt to fix the problem.

"At the end of the day, it is a tax increase. I'm not about tax increases," said state Sen. Jack Brandenburg, R-Harrison Twp.

Brandenburg also said the bill is an attempt by the Legislature to go around the Michigan Supreme Court, something he is also not willing to support.

State House Democratic Leader Tim Greimel, D-Auburn Hills, also voted against the bill. He said he is uncomfortable with what he characterized as a retroactive tax increase on businesses that employ many Michiganders, especially given the fact that the measure did not get a single committee hearing.

The bill now goes to Governor Rick Snyder, who is expected to sign it into law.