Snyder looks to keep reforms from hiking state taxes

David Eggert
Associated Press

LANSING (AP) — Gov. Rick Snyder says the federal tax bill will cause Michigan residents’ state income taxes to increase, and he is committed to ensuring that taxpayers ultimately do not have to pay more.

The tax legislation, which President Trump signed Friday, will eliminate the $4,050 personal exemption. That is an issue because Michigan lets people claim a $4,000 exemption for each exemption taken on their federal return.

“The federal tax reform is going to cause people’s Michigan taxes to go up. We shouldn’t take the benefit of that at the state level,” the Republican governor told The Associated Press in a phone interview. “We should figure out how to give that back to the hard-working taxpayers.”

Snyder said while the “very complicated” tax bill may have other implications for the state tax code, the elimination of the personal exemption is “the biggest element by far.”
A single person would see a $170 state income tax hike; a married couple with two children would owe $680 more.

Snyder said the simplest fix is boosting Michigan’s personal exemption, but other options are being studied. He plans to propose recommendations in concert with the next revenue-estimating meeting on Jan. 11, when his administration and legislative economists will agree to budget figures.

Snyder, who first addressed the problem in an interview with Gongwer News Service earlier this week, told the AP he opposes the federal tax bill.

“The benchmarks I’ve always had are it needs to be simple, fair and efficient in a fiscally responsible way. What they passed doesn’t meet that standard in multiple aspects. ... Is it simple? It’s not.”

Also Thursday, the second-term governor said one of his priorities in 2018 — his last year in office under term limits — is continuing to solidify Michigan as a “world leader” in mobility technology such as self-driving vehicles and car-sharing.

Another focus is rolling out a “Marshall Plan” for talent development in his final budget proposal in February, to link more people to unfilled jobs in information technology and other fields that require a certificate but not a college degree.

Snyder reiterated his opposition to repealing the state’s law that requires better “prevailing” wages on state-financed construction projects.

The GOP-controlled Legislature could bypass his veto pen early next year by approving an initiated bill backed by a nonunion construction trade group and conservative organizations.

“I don’t believe repealing the prevailing wage laws is a good thing. I’m a supporter of the hard-working professional tradespeople, the skilled tradespeople that do that work. In fact, we’re trying to encourage more people to go in those fields because there's so many openings,” he said. “I would hope the legislators don’t repeal it and I would hope our citizens don’t repeal it.”

However, Snyder said he has not decided whether to directly and more aggressively lobby Republican lawmakers to let the legislation go to a statewide vote in November.

The state Bureau of Elections is reviewing more than 380,000 signatures for the initiative.

If roughly 252,000 are valid, the bill would move to the Legislature. Legislators would have a 40-day window to vote or else the measure would go to voters.