Gov. Whitmer proposal: A $180 check for each Michigan tax filer

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LANSING — Each Michigan tax filer would share in the state's record budget surplus by receiving a check for $180 under a proposal from Gov. Gretchen Whitmer and Democratic majority leaders in the House and Senate.

The checks could be issued as soon as this spring or early summer, Whitmer spokesperson Bobby Leddy said. The total cost of the checks, which would come from the general fund, will be $800 million, he said.

One check would be issued for each income tax filing in 2023, so a couple filing jointly would receive one $180 check, not two, a spokesman said. Also, those eligible to file income tax returns but who do not owe any taxes to the state would still be eligible for a check, a spokesman said.

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Whitmer, joined by House Speaker Joe Tate, D-Detroit, and Senate Majority Leader Winnie Brinks, D-Grand Rapids, detailed the proposed size of the rebate checks at a Monday morning news conference in Lansing. Plans to issue checks to all taxpayers were announced Friday, but no amounts were specified.

Gov. Gretchen Whitmer delivers her State of the State address on Wednesday, Jan. 25, 2023, at the Michigan State Capitol in Lansing.
Gov. Gretchen Whitmer delivers her State of the State address on Wednesday, Jan. 25, 2023, at the Michigan State Capitol in Lansing.

"Too many families are seeing inflation cut into their monthly budgets," Whitmer said. "We want to help."

Whitmer said the checks are one piece of a broader inflation relief plan that also targets tax cuts and credits for retirees and low- and moderate-income workers.

Republican legislative leaders criticized the proposal as not going far enough.

"We should be doing more than handing out a one-time annual rebate check that equals 49 cents per day," said Senate Minority Leader Aric Nesbitt, R-Porter Township.

The state has a budget surplus of about $9 billion after state tax revenues repeatedly exceeded expectations following federal stimulus measures in 2020 and 2021 that were prompted by the COVID-19 pandemic.

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The checks are to be included in Democratic legislation that would also repeal the "retirement tax" by restoring exemptions for certain pension income that were removed under former Gov. Rick Snyder and increase the state Earned Income Tax Credit — which Whitmer is renaming the Working Families Tax Credit — to 30% of the federal credit, up from 6% currently. Votes are expected this week.

Last May, before the November election, Whitmer proposed $500 checks for "Michigan working families." That plan, which lacked details, was never approved by the Legislature.

House Minority Leader Matt Hall, R-Richland Township, said Friday he is concerned the checks are part of a plan to halt a 0.2-percentage-point rollback in Michigan's personal income tax rate, to 4.05% from 4.25%, that would likely be triggered by soaring state revenues.

"This latest scheme crafted behind closed doors appears to be the governor’s newest attempt to cancel the income tax cut that’s due to every Michigan family, worker, and small business this year and every year afterward," Hall said.

Whitmer deflected questions on the income tax rollback trigger Monday, saying it's not known that the trigger will even come into play, since the Annual Comprehensive Financial Report, which will identify general fund revenues for the 2022 fiscal year, has not yet been published. That report is expected in early- or mid-March.

However, if the $180 checks were issued in such a way that their $800 million cost was never counted as general fund revenue in 2022, that would be enough to prevent the income tax rollback trigger from being activated, economists say.

Rolling the income tax rate back to 4.05% would save a household with $50,000 in taxable income about $100 annually.

Whitmer said Monday the rollback in the income tax rate would only create a $16 savings for a single mom earning about $30,000 a year.

Contact Paul Egan: 517-372-8660 or Follow him on Twitter @paulegan4.

This article originally appeared on Detroit Free Press: Gov. Whitmer proposal: A $180 check for each Michigan tax filer