LANSING – On Friday, Michigan Gov. Jennifer Granholm, as expected, vetoed legislation cutting the Single Business Tax and blocking a proposed ergonomics rule. The SBT tax cut would have saved the average business about $700 a year.

Senate Majority Leader Ken Sikkema (R-Wyoming) and House Speaker Craig DeRoche (R-Novi) said those actions would hold the state back.

Under the package she signed, business taxpayers could deal with more disputes through informal conferences and could rely on letter and past Treasury rulings in calculating their taxes. The bills also ensure that business taxpayers are provided sufficient time to file forms and papers.

“My administration is committed to easing compliance burdens on Michigan businesses without placing additional strain on the state budget,” Granholm said. “The legislation I signed today ensures that current Michigan Department of Treasury practices will continue.”

The bills in the package were HB 4244, PA 5; HB 5356, PA 6; HB 5357, PA 7; HB 5358, PA 8; HB 5359, PA 9; HB 5260, PA 10; HB 5361, PA 11; HB 5362, PA 12; and HB 5364, PA 13.

Granholm said the bills she vetoed would have interfered with the department’s ability to enforce tax laws. Among those bills were provisions restricting when the department could enforce tax bulletins (HB 5355), allowing the department to reduce tax settlements (HB 5363), and exempting items from use tax if it was subject to sales tax (HB 5386). Current law exempts purchases from use tax only if the sales tax was paid.

The headline vetoes also included bills that would have cut the alternative Single Business Tax for small businesses and would have prohibited the state from imposing ergonomics standards on businesses. The vetoes were expected, especially the tax cut, as she has argued that no further tax cuts will be signed that are not revenue neutral.

And in her veto message on SB 957, Granholm said the Legislature has not kept a promise to close tax loopholes to help pay for additional tax cuts. And while she will continue to oppose legislation that does provide a fiscally responsible manner of restructuring business taxes, she would support changes to the state’s business tax structure.

The legislative leaders said the tax cut bill, SB 957, would have saved small businesses some $30 million. And they said allowing the Department of Labor and Economic Growth to go forward with ergonomic standards, which HB 5447 would have prohibited, could cost businesses as much as $500 million.

“The governor had an opportunity to prove that what she says and what she does are the same thing. Instead, she vetoed two critical bills for job providers and in the process vetoed her credibility,” Sikkema said. “The short-term damage will hurt small businesses in Michigan. The long-term damage of a leader with a credibility gap is devastating to this state’s recovery.”

“One week after the governor stood before the people of Michigan and proclaimed her commitment to turning our economy around, she has vetoed legislation that would have created jobs by making Michigan a less-costly, more-competitive state,” Mr. DeRoche said. “The governor can travel around the globe all she wants attracting a few jobs here and there, but we’ll never achieve the kind of sustained investment, economic growth and job creation we need in Michigan until we make fundamental changes to our business climate. In this case, the governor’s veto speaks much louder than her words.”

Rep. Fulton Sheen (R-Plainwell), chair of the House Tax Policy Committee, said the vetoes hurt businesses. “This is a sad day for Michigan business owners,” Sheen said. “Job providers in the state can never move forward as long as the governor insists on tying them to outdated policies.”

Barry Cargill of the Small Business Association of Michigan said small businesses have been among the few industrial sectors adding jobs to Michigan. “The $30 million is chump change compared to the $600 million” in tax cuts signed for the state’s largest industrial companies in December, he said. The veto sends the wrong message to small businesses, he said.

Granholm also signed a supplemental appropriation (SB 956, PA 4), but vetoed a provision that would send $116.3 million to the Budget Stabilization Fund. “It is clear to me that this deposit was not a serious proposal,” Ms. Granholm said in her veto letter, adding that signing that provision and SB 957 would have resulted in a budget deficit.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com