Republicans overthrew it veto letter both “war with families” and frustration for both consumers and small businesses.
“The governor is talking about a good game of tax cuts when she speaks to the public, but behind the scenes she is doing her best to keep money out of the pockets of Michigan families and kill any chance of relief,” said House Speaker Jason. Wentworth, R-Farwell, said in a statement.
“People have a hard time making ends meet and paying the bills. We need real leaders who say what they mean and do what they say, not politicians who wait until 5 pm on Friday to keep their election promises. ”
Whitmer veto is the latest in a confrontation in election year over how to spend nearly $ 5 billion on remaining federal stimulus funds, cut taxes and cut record fuel prices, which have risen sharply across the country amid Russia’s invasion of Ukraine.
In a statement earlier Friday, Whitmer announced support for a “short-term pause” in the sales tax on motor fuel. It was not immediately clear how long, according to Whitmer, the pause should last. The governor’s office did not immediately answer the following questions from Bridge Michigan.
“A short break (in the fuel sales tax) is a fiscally responsible action we can take that will give drivers relief at the pump right now, not next year, as well as protect road repair funding and save tens of thousands of well-paid construction works, ”Whitmer said.
“While I am open to negotiating alternative proposals, I will not support legislation that jeopardizes road repairs, construction work or funding for local schools.”
The Michigan Senate finally approved the bill this week it would suspend The state gas tax of 27.2 cents per gallon for six months, but the Republican majority did not have enough votes to give the bill an “immediate effect”, which means it will not reduce prices until 2023.
It came after Republicans approved a separate one A $ 2.5 billion plan this will lead to a reduction in personal income tax, increased assistance to the elderly and a reduction in the tax on children.
Among other things, the Republican Party’s plan will reduce the income tax rate in Michigan from 4.25 percent to 3.9 percent. That would save a family of four with an income of $ 63,829 – the median for Michigan in 2020 – $ 153 next year.
Because federal law prohibits states from spending incentives to pay taxes directly, according to nonpartisan fiscal agencies, the Republican Party’s plan could force cuts of more than $ 1.8 billion annually in other parts of the state budget.
Whitmer rejected both bills on Friday – vetoed income tax legislation and vowed to do the same if the gas tax bill comes to her table – but called for further talks.
“I know we can work together to provide immediate relief that matters right now. We must unite to agree on a balanced budget, as we have done for three years in a row, and include proposals to reduce costs and more money in people’s pockets, “she told MPs. her veto letter.
Opposition to the fuel tax
Senate Majority Leader Mike Shirky, R. Clarkelake, said Friday that he continues to support the proposed gas tax vacation, and accused Whitmer of being “a few weeks late” for the debate “and missing millions of dollars” when it comes down to fuel prices.
Whitmer, a first-term Democrat seeking re-election, has called on Congress to suspend federal gas taxes. But at the state level, she did not support any specific plan to reduce fuel prices until Friday.
Unlike the state’s plan to suspend the state’s gas tax, suspending the sales tax won’t jeopardize transportation funding or slow Whitmer’s current push to “fix the damn roads,” her company’s 2018 central promise.
But without replacement funding, the suspension of the fuel sales tax will affect the School Assistance Fund, which supports traditional public and charter schools across Michigan. Nearly $ 3 out of every 4 sales tax goes to schools.
In early 2022 fiscal year, when gas averaged $ 2.84 a gallon, the state expected to receive $ 621 million in tax collection from fuel sales, an estimate that is likely to have risen significantly with rising gas prices.
Senate Minority Leader Jim Ananich, D-Flint, said last week he is confident that lawmakers can identify money to replace schools, given that the state is “unexpected” from federal incentives and additional funding.
Michigan is one of seven states where motor fuel is subject to some or all of the total sales tax, according to the state’s National Legislative Conference.
Politicians have long debated whether to exempt motor fuel purchases from the state sales tax, which increases pumping costs but, unlike the traditional petrol excise tax, is not conducive to maintaining roads, bridges and other modes of transport.
Ananich has resumed debate, proposing to suspend the fuel sales tax until the end of the year. But powerful Republicans like Shirky want to take his offer a step further by permanently suspending the fuel sales tax.
“If the governor really wants to help the people of Michigan, she will tell the Senate Democrats to support the immediate suspension of the gas tax,” Shirki said in a statement on Friday. “Then we can talk about abolishing the tax on gas sales once and for all.”
Republicans in the House of Representatives continue to support their original plan to suspend the state gas tax, said spokesman Gideon D’Asandra.
“A temporary pause in sales tax will yield less savings than last week’s fuel tax pause, and over time the savings will shrink even more as gas prices fall from their highs,” D’Asandra Bridge said in an email. . .