Traverse City Record-Eagle

Michigan

April 28, 2014

Tax cut plans dim

LANSING (AP) — An income tax cut seemed inevitable just two months ago, as Gov. Rick Snyder and majority Republican lawmakers offered up and even began passing rival plans to use some of a budget surplus for short- or long-term tax relief before the 2014 elections.

Now plans for a tax reduction are waning and shifting instead to addressing pothole-ridden roads.

Snyder, who said he’s open to dropping his tax plan to set aside more money for transportation, attributes the shrinking interest in tax relief to drivers who voiced their frustration.

“Much of it came about because of how serious the pothole season’s been,” he said. “I appreciate the general public speaking up more and more — they see a need to solve this problem in terms of transportation.”

While legislators aren’t ready to vgive up on tax cut discussions, they acknowledge that road funding could ultimately be a higher priority.

“In general, people are saying, ‘Look, if we got a little extra money this year, rather than give a few dollars back to everybody when we have real structural problems with the roads, we think more people would prefer we go ahead and fix those roads,’” said Senate Majority Leader Randy Richardville, R-Monroe.

In his February budget blueprint, Snyder proposed a modest $100 million-a-year tax cut in the form of partially restoring an income tax credit for low- to moderate-income homeowners and renters that he’d previously helped eliminate to as part of a major overhaul of and cut in business taxes. The reduction also would be retroactive to the 2013 tax year, with taxpayers on average getting $79 rebate checks in the mail this summer.

Also pending on the floors of the GOP-led House and Senate are four separate tax-cut proposals that cleared committees, including a modified version of Snyder’s plan that would let more homeowners and renters qualify.

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