LANSING – Any tax cuts the Legislature enacts must be paid for in a way that does not slash state revenues, Gov. Jennifer Granholm said Friday. Granholm told reporters cutting revenues at a time when there are critical needs in the state would be irresponsible.
Granholm made the comments at the end of a week which saw the Senate pass a number of proposals to cut property taxes – one of which she said belonged in the discussion on tax changes – and her suggesting she could back a graduated income tax to replace the surcharge on the Michigan Business Tax.
But Granholm made it clear she did not back slashing state revenues. The state has to be able to provide education and health care, especially to needy citizens, at this time, she said.
“If there’s a way to pay for it (tax cuts) I’m always willing to look at it,” she said.
But the state has to take responsibility to be sure it can pay for either adding a new program or cutting a tax.
Last week it surfaced that a proposal, made by Michigan State University economist Charles Ballard to repeal the entire MBT and replace it with a graduated income tax (which would take voter approval), had been outlined to a number leaders and groups, including Granholm.
Granholm said this week she has long supported a graduated income tax, and would support one to replace the surcharge on the MBT. But she did not back repealing the entire MBT. Nor is there such a proposal on the table.
House Speaker Andy Dillon (D-Redford Twp.) has called for a review of the state’s entire tax structure. Thursday Granholm and the four legislative leaders met to discuss the state’s taxes, though no announcements were made of any decisions.
Also last week the Senate approved SJR H which would allow property owners a tax break when the assessed value on their property declined. Local governments oppose the proposal, saying it would cut their revenues too deeply, and initially the measure failed.
But after Granholm said the proposal should be at least discussed, enough Democrats switched votes to pass the proposal over to the House.
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