Whitmer vetoes $2.5B in tax relief

Cuts to income and property taxes have been rejected

Gov. Gretchen Whitmer has vetoed a bill that would have saved Michigan’s taxpayers $2.5B by reducing income and property taxes as well as those for seniors and families. This is similar to another proposal she vetoed earlier this year. 

Currently, Michigan faces a massive budget surplus largely thanks to federal COVID-19 relief. Now, state legislators and executives must come to a decision on how best to serve Michiganians with those funds. While they technically have until September to complete budget negotiations, they are looking to have the budget completed by the end of the month. 

This “Family Inflation Relief Plan” would have lowered state income tax from 4.25% to 4% and increased the personal income tax deduction from $4,900 to $6,700. In addition, it allowed for a $500-per-child tax credit. It also addressed Whitmer’s priorities by including a raise in earned income tax credit from 6% to 20% of the federal level and raising the personal tax exemption for seniors. A separate bill funding a property tax credit for disabled veterans was not vetoed. 

In vetoing the bill, Whitmer cited Constitutional concerns. In a letter to the Michigan House of Representatives, she wrote “The constitutional defects of this hurried process are both glaring and obvious. The bill was passed in open disregard of the constitutional rules that are meant to protect Michiganders’ rights to evaluate proposed laws and make their voices heard before those laws are adopted.” 

Republicans hit back. “Whitmer’s words ring hollow as she actively works to prevent economic aid from reaching families as a recession approaches and inflation hits new highs,” said Michigan Republican Party Spokesperson Gustavo Portela, “She is clearly unserious about lessening the burden of her and Joe Biden’s economic failures and unwilling to work in a bipartisan manner to get this done.” 

Rep. Matt Hall, who authored the legislation – and thought by many observers as likely to be the next Speaker of the House– expressed his frustration in a statement saying “I don’t know if she will ever change her mind and allow hard-working taxpayers to keep more of their own money, but I do know House Republicans will continue to fight for tax relief and continue to give her the chance to finally do the right thing,” He added, “This isn’t over.”