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Governor Gives Cool Reception To Talk Of Tax Cuts

Tax Credits/Flickr

Governor Rick Snyder is decidedly cool about the tax cut fever sweeping the state Capitol. That fever stems from a projected budget surplus for the current fiscal year that could be more than a half a billion dollars in this fiscal year.

“Let’s get the facts first and then let’s make sure we’re being fiscally responsible for the long term,” he told reporters this week. “Because it’s not just about looking at rollbacks. It’s looking at the best long-term solution for our citizens.” 

A state board meets Friday to adopt official revenue projections for Michigan’s General Fund budget and School Aid Fund. That projection will include the revenue surplus. Legislative projections have pegged the windfall in excess of $1 billion over the next three years.

There are still plenty of other spending pressures, though. Shortfalls in the Medicaid program need to be filled. The governor has called for an ambitious road funding program. And the Snyder administration is still short of its goal of $1.2 billion in the state’s “rainy day” savings. Snyder, a retired businessman and CPA, has also been a champion of paying down long-term debt.

So, Snyder says, it’s too early to be talking about tax cuts:

“We’ve improved dramatically in our economy, but we need to be smart about making decisions.”

But many lawmakers – facing election campaigns this year -- are already lining up behind ideas for tax cuts, including a rollback in the income tax rate. The governor has not flat-out rejected the idea. But he does say reinstating the exemption in pension income is a non-starter with him. He says that would be unfair to retirees who pay taxes on their 401 (k) income, and to younger taxpayers.

The state did reduce business taxes during his first year in office, and helped pay for that by ending the tax exemption on most pension income.   

Rick Pluta is Senior Capitol Correspondent for the Michigan Public Radio Network. He has been covering Michigan’s Capitol, government, and politics since 1987. His journalism background includes stints with UPI, The Elizabeth (NJ) Daily Journal, The (Pontiac, MI) Oakland Press, and WJR. He is also a lifelong public radio listener.