Mich. might increase taxes to keep Promise
By Marissa Cumbers (Last updated: 10/07/09 11:46pm)Lawmakers in the Michigan House passed three tax increases Wednesday in an attempt to restore funding to the Michigan Promise Scholarship.
The proposed tax increases would go toward a supplemental bill being considered by the state House, which could restore $120 million to the Michigan Promise Scholarship, increase health care funding and lessen cuts to revenue sharing funds that pay for city services such as public safety.
While working to settle Michigan’s $2.8 billion budget deficit last week, the House and the Senate passed a higher education budget that eliminated the Michigan Promise Scholarship and about $60 million in additional financial aid funding. The state has until Oct. 31 to settle the $40 billion budget under a 30-day extension passed last week. The budget was supposed to be finalized by Oct. 1, but legislators and the governor are engaged in a political battle about partisan issues. All parties must agree for a budget to move forward.
“While no one ever likes to raise taxes, if we want Michigan to come out of this and move forward, we have to invest in things that can help us do that,” said state Rep. Joan Bauer, D-Lansing.
Bills passed in the House include an increase on physician taxes, a hold on increases to personal income tax exemptions and reductions to Michigan business tax credits.
Additional revenue bills to fund the supplemental one could be voted on as soon as Thursday and include a tax increase on tobacco products excluding cigarettes, higher fees for bars serving liquor late into the night and a hold on income tax credits for certain residents, said state Rep. Cindy Denby, R-Handy Township.
“That is a poor approach for Michigan to take right now when we have families struggling to make end’s meet and small businesses trying to stay afloat,” she said.
These revenue bills are the only proposed funding to restore the Michigan Promise.
A letter distributed Wednesday to lawmakers on the House floor from Business Leaders For Michigan, a nonprofit organization, discouraged lawmakers from “tax increases and revenue enhancements,” and listed MSU President Lou Anna K. Simon as a member and supporter of the organization.
MSU spokesman Terry Denbow said in e-mail Simon has never seen this letter.
“MSU, like U-M and Wayne State, is a member of Business Leaders for Michigan, just as we all are members of numerous community-based organizations across Michigan,” he said. “But none of us inherently promote or share the political views of each of these organizations where we might appear on their letterheads.”
The Democratic-led House passed three revenue bills, and the bills move to the Republican-led Senate for consideration as early as next Tuesday.
Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester, said the Senate is working to erase the deficit, not increase taxes.
“We don’t believe that a tax increase is how you solve the budget,” Marsden said. “This deals with this year’s budget with no new tax increase.”
Chances of these tax increases passing in the Senate are slim, said Sen. Michael Switalski, D-Roseville.
“Just from discussion with my colleagues, it doesn’t have a lot of support in the Republican side,” he said. “But I’m not saying it is impossible.”
Originally Published: 10/07/09 11:46pm
Jared Dobb
10/08/09 12:55amwow, I really hope they do, otherwise it’s not much of a promise, is it?
med student
10/08/09 3:10amThe added 4% tax on physicians is yet another measure put in place to drive physicians out of Michigan. When I graduate, there is absolutely no reason I can think of whatsoever to stay in this state and practice. Our taxes are already tremendous, the job market is slim, and now there is an additional tax placed on people like me who work their tails off (paying large sums of money) to graduate medical school.
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Tony
10/08/09 7:57amI wish these cowardly legislators would just raise the income tax a tenth of a percent. That’s all it would take. Everyone takes a small hit, and nobody gets singled out.
Jake
10/08/09 10:25amHow about instead of raising taxes on the successful, we cut off the dead weight in Pontiac and Detroit?
At some point, you have to separate the chaff from the wheat. Trying to prop up Detroit is bringing down any kind of recovery we might have.
scott
10/08/09 10:57amThe public is ignorant of the fact that world class physicians have already left Michigan for greener pastures – check out where Drs Jeff Mast, Keith Mayo, Bert Moed, and Tracy Watson are now practicing. Imposing a 4% tax on physician gross revenue works out as an 8% personal income tax hike for physicians, as most physicians in private practice have a 50% overhead cost. In life, often you do not realize what you have until it is gone.
wakeupamerica
10/08/09 4:47pmLawmakers in the Michigan House,(all Democrats) passed three tax increases Wednesday in an attempt to restore funding to the Michigan Promise Scholarship. Granholm renigged on her February promise to not raise taxes, she lied!
The budget was supposed to be finalized by Oct. 1, but legislators and the governor are engaged in a political battle about partisan issues like how many billions can she squeeze out of a taxpayer who’s broke?
While no one ever likes to raise taxes, if we want Michigan to come out of this and move backward, we have to invest in things,(like a 75 billion dollar building) that can help us do that,” said state Rep.
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angela
10/08/09 11:31pmI do not like that the med student commented against the tax raise for reinstatment of the michigan promise. as a student with debt he should understand that any money helps a student with their trials of higher education. Without the michigan promise (and the competivie schorlarship) I am going to community college and looking at shoving over almost 3000 dollars for this year. Reinstatment of the promise would drasticly help me out. It is not like the taxes will cause taxpayers to pay thousands of dollars more a year. And to top it off, the educated mass is the mass that will help turn the economy around!
Lansingite
10/09/09 10:09amThe “tax” on physicians is called the Quality Assurance Assessment Program (QAAP). It has existed in Michigan since 2002 and levied against nursing homes and hospitals. What REALLY happens is as follows:
The revenue collected from QAAP is matched at a certain percentage by the federal government.
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Hana
10/09/09 4:56pmI don’t know why they’d make a “promise” they’re not going to keep. Do they want people depending on that scholarship money to stop going to college & go on welfare instead? That’s what this state needs right?
jake
10/11/09 4:06amJake, you’re a dumb ass.