Question 1): Big news! The state income tax will officially be dropped from 4.25% to 4.05% for the 2023 tax year. How did this happen? Is this rate here for keeps?
As part of a $1.2 billion road funding plan enacted by a majority Republican Legislature and approved by Gov. Rick Snyder back in 2015, an automatic income tax reduction would ensue if the state’s General Fund increased by more than 1.425 times the rate of inflation. Nobody seemed to expect that would ever happen, but, last week, the release of Michigan’s annual comprehensive financial report for the Fiscal Year (FY) of 2022 clarified the state had in fact met the aforementioned fiscal qualifications. It’s official!
So, do Republicans get the credit? Not if Gov. Gretchen Whitmer has anything to say about it. Here’s what Whitmer said last week: “As a result of our growing economy and strong fiscal management, Michigan’s state income tax will decrease to its lowest in 15 years. This year, we permanently rolled back the retirement tax on our seniors, quintupled the Working Families’ Tax Credit for 700,000 families, and now everyone’s income tax will decrease for a year. In total, we have put $1.6 billion in tax relief back in people’s pockets without cutting any critical services or programs.”
Disingenuous? It couldn’t be more so. Earlier this year, Whitmer did every thing she could to scuttle this tax cut. Her personal slate of tax proposals would have blocked the automatic income tax rollback by using $800 million in FY ’22 revenue to deliver $180 rebate checks to eligible Michigan taxpayers, or $90 per married joint filer.
In early February, Whitmer sounded an alarm that the anticipated Republican-sponsored tax reduction was not guaranteed. Furthermore, using her preferred demographic cohort she said it would deliver only about $16 in relief – making up 30 cents weekly – for a single woman raising a family while earning $30,000. Whitmer and Democratic lawmakers argued that their proposal for a $180 one-time rebate check would offer more worthwhile relief. Senate Republicans saw Whitmer’s claims as gaslighting. They opposed her rebate scheme, knowing that, in the long run, it wouldn’t come close to matching the tax relief Michiganders would get from a permanent reduction in the state income tax.
HB 4001, which embodied Whitmer’s proposals and which she signed into law on March 7, did not get the Republicans votes it needed for Immediate Effect (I.E.). That meant it couldn’t be enacted by April 18 (the deadline for the $180 rebate checks to be possible).
So, one would think securing the income tax rollback was a win for both current and former Republican lawmakers, who were pleased to keep $650 million circulating in the state’s economy and to deliver the lowest state income tax since 2007.
But Whitmer and her administration were not finished with trying to short-circuit the cut. The governor had her Treasury Dept. director ask Attorney General Dana Nessel for an opinion on how lengthy a period of time the cut was good for. Democrat Nessel dutifully complied with an opinion (delivered with breathtaking speed) that the reduction would last for one year and would not be a permanent decrease as GOP lawmakers claimed.
How important is Nessel’s opinion? Is it likely to hold up against Republicans’ insistence that in 2015 they and Gov. Rick Snyder believed that any such cut was permanent unless changed by a future legislature? Did they craft the language in the bill to reflect that?
Answer 1): An Attorney General’s opinion, no matter how flawed, has the force of law unless overturned by a court of law. That means some party or parties will have to file suit against Nessel’s ruling and hope that eventually they prevail through what is likely to be numerous appeals. This could be a campaign issue next year that might be beneficial to Republicans. In trying to determine who is right — Nessel or Republican lawmakers — a layman Michigander might be forgiven for thinking: “Who should we believe — Nessel’s opinion or, reading the plain words of the statute, our lying eyes?” Litigation is almost certain to ensue. The only delay might stem from Republican judge-shopping — trying to find the friendliest court for their foray into the legal/judicial thicket. Everyone should realize that any legal judgment is likely to be partisan, despite the usual claims by the jurists that it isn’t. If the case should reach the state Supreme Court, there is the possibility that Chief Justice Beth Clement will believe she must recuse herself because she was Snyder’s deputy legal counsel and cabinet secretary at the time he signed the 2015 legislation into law. The next year, she became the governor’s chief legal counsel. Snyder insists the 2015 cut was designed to be permanent. If Snyder retains the courage of his convictions, wouldn’t he be the ideal plaintiff?
Question 2): If we had to predict what Gov. Gretchen WHITMER will be doing four years from now, what would we predict? Similarly, if we had to predict what Secretary of State Jocelyn BENSON will be doing in four years, what would we guess?
Answer 2): Remember that, when Gretchen Whitmer was growing up, she wanted to be an ESPN commentator. She still has it in her do do that, only on politics, not sports. In fact, she might well follow the Jennifer Granholm path — do political commentary on cable or networks, then join the cabinet of a Democratic president if she gets the opportunity. As for Benson, of course she could run for governor in 2026. If elected, that answers that question. U.S. Senate appears out, unless Gary Peters retires, which is hard to imagine. How about this? — Attorney General. Benson is a lawyer; in fact, she was dean of the Wayne State University Law School. She would be an ideal Democratic nominee for A.G. in 2026.
Question 3): If we had to predict what Attorney General Dana NESSEL will be doing in four years, what would we predict? If we had to predict what Lt. Gov, Garlin GILCHRIST will be doing in four years, what would we predict?
Answer 3): It’s tougher to pick future career paths for the current constitutional officers than for, say, Gary Peters or Elissa Slotkin. We could see that those two were being groomed by the Democratic power structure for Congress, first the House and then the Senate, from the start. Not with Nessel and Gilchrist. Both had never been elected to anything before they got their present jobs. It is difficult to envision anything in elective office for Nessel beyond her current position. She is likely to go back into the private sector and make a bundle as a practicing attorney, or perhaps a perch in academia will beckon. Gilchrist is the only one of the four who has never been elected to anything on his own. Does he even want to continue in elective office? He might want to try getting elected to something else, but he doesn’t have a natural constituency, geographical or otherwise, beyond being an African-American. Some legislative seat would have to be handed to him, like a Detroit Congressional fiefdom or maybe a return to the state Senate as a sitting member rather than simply presiding as Lieutenant Governor.
Question 4): . Is the prospect of adjourning sine die early (to allow legislation for an earlier 2024 Michigan presidential primary to go into effect) likely to force the legislature to be more efficient than it otherwise would be this year?
Answer 4): If by “efficiently” we mean “swiftly”on the main items on their agenda, yes. In fact, majority Democrats are already doing that. They could get the main parts of their program through by summer or early fall, adjourn sine die, and start the clock running toward the effective date 90 days later on what they have passed and not have to wait until April 1 of next year, as has been the case for decades on legislation that doesn’t get I.E. If they need to reconvene to consider something unforeseen, they can request their amigo, Gov. Whitmer, to call a special session asking them to address whatever they and the Governor have agreed needs to be done.
Question 5): With virtual control of Michigan government for the first time in 40 years, the Democrats may have been expected to start out pursuing what could be termed ‘low-hanging fruit.’ Is it fair to say that that is what the legislature has been doing so far?
Answer 5): We think we know what “low hanging fruit” means, but do we? If it means “easy to get,” majority Democrats in the 102nd Legislature have chosen to rely solely on strong party unity to grab the lower branches and gobble them up, including some major policy objectives that are controversial. The Democrats have decided they don’t need the votes of minority Republicans, so everything has been “low-hanging” for them. The implication of morsels “higher up in the tree,” however, means that, to obtain them, they don’t have the votes within their House and Senate caucuses and need Republican help. Problem is, they may find that’s beyond their reach for the rest of the session because they’ve so alienated their GOP colleagues in the first three months of 2023 in the process of consuming their low-hanging bounty.
Larry J Killips says
Absolute power corrupts absolutely.
Yes. Sadly, this is our Michigan now.
Walt Sorg says
Republicans had “absolute power” for the majority of the last 40 years. Are you saying that amounted to four decades of absolute corruption.
Dana Nessel would be an excellent nominee for governor. She has the passion and tenacity that would make he a good governor.
Jocelyn Benson is more of a scholarly individual and would make a good A.G. nominee as that position requires a strong command of the law.
Garlin Gilchrist would make a good Secretary of State as that position generally goes to a minority if not a female – ala Richard Austin.
Matt Crehan says
Sounds kinda like re-arranging deck chairs on the Titanic, doesn’t it?
Ryan R. says
This is typical for run of the mill Dems and Republicans to toy around about how much they want to rob people of their wealth. The state I come tax should just be eliminated. It’s not like this money is being used to properly to help the people of Michigan.
Taxers and taxes are evil. Taxes literally take food from the mouths of children. If democrats truly believed in protecting the children, they would eliminate the state income tax.
John C Stewart says
Wow-after a full day of Law practice-starting at 7 AM- I love the chance to read and respond to Bill Ballenger. Dana Nessel, my fellow Plymouth resident (I’m in the Township) utilized creative stone-walling to thwart the Income Tax Reduction to only one year. No one really thinks the intent was for only for one year.
In 3 1/2 years Whitmer will devote full-time to running for President 2028. Northville resident and former Dean of WSU Law School, will aspire to a black robe and be on the MI Supreme Court..
Here is to hoping the Republicans become ENLIGHTENED AMD NOMINATE A MODERATELY-CONSERVATIVE TEAM TO RUN FOR GOVERNOR-LT. GOVERNOR IN 3 YEARS.
Robin K. says
John – your a legend here in Plymouth. You are still a Main Street fixture.
You should try to run and get your seat back in the Michigan House. We need more moderates in the state house.
Dana Nessel is another famous lawyer from Plymouth. Maybe she can run for president in 2028.
It’s always good to see income tax lowered. As for the commentators on here that are against income tax how do you propose that ever happening? As for the future, I can see Benson running for Senator in 24 or Governor in 26. I don’t see Gilchrist doing much because as you said he really has no base of support. He could possibly run for Mayor if Duggan retires. Nessel is not as popular as Benson or Whitmer so I hesitate to predict her future. Whitmer will end up in a cabinet of a democratic administration and might be a TV commentator. She’s young so she just won’t fade away after her final term. It is now and will be a complete mystery for a couple years who the Republicans will run for Governor in 2026. They have no bench unlike the Democrats. No third party will ever gain traction in Michigan including the Libertarians so unlike a commentator the reality is it will always be Democratic or Republican. Choose a side. The only possible political candidate the Libertarians have that might be able to make an inroad is former Congressional Justin Amash. But, he has faded away as he has not kept himself out in the media.