Snyder Budget

8/7/2019 Snyder Budget

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From Greg Andrews , Gov. Snyder ’s Office:

Contact: Sara WurfelOffice: 517-335-6397Email: [email protected]

FOR IMMEDIATE RELEASE Tuesday, April 12, 2011

Progress made on tax reform plan

Retirees who are 67 and older to see no changes to

pensions

LANSING, Mich. – Gov. Rick Snyder , Lt. Gov. Brian Calley , Senate Majority LeaderRandy Richardville and House Speaker Jase Bolger today outlined the progress beingmade on the tax reform plan. Overhauling Michigan ’s unwieldy tax structure isnecessary to stimulate the economy and declare that Michigan is open for business.

The leaders noted that they heard the concerns of Michigan citizens about aspects of thetax reform plan—in particular the tax on pensions—and have revised it to offer furtherincome protections to seniors age 67 and older.

“The positive progress being made on this critical issue bodes well for Michigan ,”Snyder said. “The original reform plan was a starting point for discussion and I ampleased that the dialogue has been so productive. In our discussions, we determined it isimportant to leave retirement pensions as they are for our citizens age 67 and older. Weare able to move forward with a revised plan that still adheres to the principles I laid outwith my budget and tax initiatives, will create jobs and protect the safety net forMichigan families.”

Upon passage of this plan, Michigan will have the 14th best income tax -- and the 8thmost generous treatment of retirement income – among states with income taxes.



“This agreement is the first part of an alternative plan to reinvent Michigan ,”Richardville said. “Senate Republicans worked hard to create a more attractive business

environment in our state and to ensure that senior citizens were exempt from anyadditional tax burden.”

“The budget crisis in this state is a direct result of the jobs crisis. To help job seekers, wemust make Michigan a more competitive state to provide a job,” said Bolger . “Aftertaking input from citizens across the state and working with the governor and Senate, wehave an improved proposal for consideration to put Michigan on the path to economicprosperity. This new proposal exists because we took the time to listen to the families inour districts and we will continue to listen.”

“This plan protects current seniors, provides for the reinvention of Michigan , makes

Michigan competitive again and provides for an environment conducive to job growth,”Calley said.

The plan continues the elimination of the jobs-killing Michigan Business Tax and endsthe double taxation on small businesses. Michigan will have the 16th best state and localbusiness tax climate—up from 30th currently, according to a Council on State Taxationmodel.

The new Individual Income Tax plan will provide for long-term structural stability in thestate's budget while minimizing the impact on current senior citizens.

Highlights of the plan include:

Pension Income

• Seniors 67 and over as of Jan. 1, 2012 , will not lose their exemptions onpensions and other retirement income.

• For retirees over 67 years of age as of Jan. 1, 2012 , if their pension isn’t taxed

now—it won’t be taxed under this plan.

• Those 67 years and older will not be subject to the proposed retirementincome changes.

• Social Security income and military pensions will not be taxed.



• People 60 - 66 years of age as of Jan.1, 2012, will receive an exemption for allSocial Security income as well as a retirement income exemption of $20,000 for

single filers or $40,000 for joint filers.

• People 59 years of age and under as of Jan. 1, 2012 , will be part of the newprogram. When members of this group turn 67 years old they will receive anexemption of $20,000 for single filers or $40,000 for joint filers against all typesof income. This is regardless of income source. It can be taken instead of theSocial Security and personal exemptions if it would result in more generous tax

treatment to the individual.

To provide this level of protection to seniors over the age of 67, about $150 million inadditional spending cuts are needed. In addition, scheduled reduction in the individualincome tax rate from 4.35 percent to 4.25 percent will now take place on Jan. 1, 2013 ,and remain at that level.

Homestead Property Tax Credit

• The revised plan further protects low-income homeowners and renters.

• The Homestead Property Tax Credit will go from 60 percent to 100 percentfor people with household incomes between $0 - $20,000.

• Low-income seniors with household incomes between $0-$20,000 remain at100 percent.

• For household incomes between $20,001 - $30,000, the Homestead PropertyTax Credit will be phased down from 100 percent to 60 percent.



• For household incomes greater than $30,000, the Homestead Property TaxCredit would be 60 percent.

• The credit for people with disabilities would remain at 100 percent.

• The maximum credit would remain at $1,200 and would be phased out forincome between $41,000 - $50,000.

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Benefits in Balance

How to save Michigan $5,735,868,172

Mackinac Center

It happens like clockwork. Every year, state officials struggle to balance the budget. They

propose tax increases, threaten to cut programs and fight to protect pet projects.Policymakers assure us that government has been "cut to the bone."

Is this annual spectacle unavoidable?

Not at all. Michigan can fix its economy, control government spending, save for thefuture and improve infrastructure with just one idea: Benefits in Balance. The gapbetween what private-sector workers and public-sector employees receive in benefitsamounts to $5.7 billion annually. Bringing this disparity into balance will save the statethis amount without cutting a single program, lowering anyone's wages or laying off asingle employee.



How big are the disparities?

• Insurance benefits per employee are $7,149 more per year in the public sectorthan in the private sector.

• Retirement benefits per employee are $11,725 more per year in the public sectorthan in the private sector.

• Michigan government workers receive generous paid-leave.

With $5.7 billion each year, the state could:

• Eliminate the Michigan business tax • Balance the budget • Spend $1 billion rebuilding Michigan roads • Save another billion dollars for a rainy day.

Best of all, this could be accomplished with:

• No service cuts • No government job losses • No government wage cuts.

Just Benefits in Balance.

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Picturing the Gap



Wages aside, there is a substantial difference between the benefits offered to the State of Michigan ’s workforce and private-sector averages:

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Public-sector wages and benefits have increased while the private-sector's have fallen:(Note: A previous version of this chart contained a minor error in the wages and benefits calculations. In addition, the Bureau of Economic

Analysis has released new data and revised previous data. The figures in this chart have been corrected and updated.)



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In the past decade, Michigan ’s private-sector employees have taken major hits incompensation while state and local government workers have gained:





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The average worker for the state of Michigan now receives a compensation package thatcosts $94,686:



Title: Benefits in Balance — How to save

Michigan $5.7 billionFeb. 4, 2011

Documents

Snyder Budget