House panel acts to add new taxes
LANSING — A House committee took the first tangible action on taxes late today by approving bills that would raise certain tobacco, personal income and business taxes and impose a 4% levy on doctors’ fees.
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The bills are ostensibly part of a package supported by House Speaker Andy Dillon that would raise about $400 million and restore some of the programs facing cutbacks that Gov. Jennifer Granholm and many Democratic lawmakers regard as critical to the quality of life in Michigan.
They were approved in committee with virtually no discussion or debate.
By late afternoon, it remained unclear whether the full House would take up the legislation (or other tax bills) today.
This morning, Granholm met with House Democrats as they devised plans for new taxes to restore some of the budget cuts the Legislature approved last week.
House Democratic leaders hope today to begin writing bills that could reduce the Earned Income Tax Credit for low income taxpayers, increase tobacco taxes and eliminate or reduce some tax exemptions.
Granholm said she’s urging them to adopt narrowly targeted taxes, rather than raising general taxes such as the income and sales taxes. She has called for more revenue to pay for the Michigan Promise college grant program, revenue sharing for local communities, Medicaid and aid to public schools – all items cut significantly in the 2009-10 budget lawmakers approved, but which still hasn’t reached Granholm’s desk for signing.
The new budget must erase a $2.8-billion deficit. After her meeting with the Democratic caucus, Granholm responded to critics of her plan who say it’s a bad time to raise taxes, with Michigan’s economy trailing the nation.
“Right now is the time to stand up for public education, right now is the time to make sure these kids can go to college, to make sure we’re not pushing senior citizens out of nursing homes, because we have unfunded the state’s safety net,” Granholm said.
“Because people are hurting, and because we have to reshape Michigan’s economy, now is the time to stand up for these priorities. There will be a lot of cuts. But we have to have limited revenue so that we can fund the priorities.”
She added, “This is all about finding the least painful types of revenues to fund the priorities for Michigan.”
