How Whitmer could grant Michigan financial relief
No need to cut a $180 check when closing the books on fiscal year 2022 would bring an automatic tax cut
Gov. Gretchen Whitmer has announced plans for legislation to give Michigan taxpayers one-time payouts of $180 for what she calls “inflation relief.” But she could grant Michigan financial relief on her own by closing the books on the 2022 fiscal year.
Michigan enacted a law in 2015 to trigger a cut in the income tax if state revenues were to increase above the rate of inflation last year, as recorded in the state’s annual financial report. The trigger would drop the income tax rate from 4.25% to 4.05%.
The trigger is expected to be reached, state officials predict. See this excerpt from the House Fiscal Agency’s revenue estimate for 2023:
“Whitmer has the power to grant immediate tax relief simply by publishing the annual financial report and allowing the existing rate reduction required by law to happen,” said James Hohman, the Mackinac Center’s director of fiscal policy.
Hohman notes that former Gov. Rick Snyder released the state’s financial reports in December or January for the last five years of his eight years in office.
Under Snyder, Michigan tended to close its books in December or January. But under Whitmer, this has happened in March or April.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.