LANSING (AP) — Gov. Rick Snyder on Wednesday proposed a $52 billion election-year budget that includes a tax cut targeted to low- and moderate-income residents, spending increases on education and local governments, and state aid for bankrupt Detroit’s pension plans.
The Republican governor broke from GOP and Democratic lawmakers pushing to use a $1 billion surplus for bigger tax relief and instead called for a tax cut targeted to households with less than $60,000 in annual income. It’s a partial reversal from when Snyder and Republicans made fewer people eligible for the Homestead Property Tax Credit in the 2012 tax year while slashing business taxes.
“We have a surplus now. We have the opportunity to give something back. It’s really aimed at people who are those hard-working folk,” Snyder told lawmakers who sit on budget committees.
The income tax credit worth up to $1,200 is available to individuals with household “resources” — generally income — below $50,000. It’s more substantial for seniors and the disabled.
Snyder wants to permanently raise the income cutoff to $60,000 — still short of the past $82,650 threshold — and change a formula so a larger percentage of property taxes are refunded for those who qualify for the break. An estimated 1.3 million taxpayers would pay $103 million less in taxes in year one, equaling about $79 per filing.
Refund checks would be mailed this summer since tax season already is underway and the cut would be retroactive to the 2013 tax year. All told, about 250,000 of the 360,000 claimants who lost the credit in 2012 could qualify again.
Democrats panned the governor’s budget proposal, saying his tax cut and spending pale in comparison to his past decisions to raise taxes on individuals and cut funding to public universities and the traditional per-pupil grant for K-12 school districts. Snyder again defended his K-12 budget, where a nearly 3 percent rise in state-based funding would go toward pension and retiree health care costs and include a $100 average bump in the per-student grant.