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Senate OKs bills so cities don't lose revenue

Published on NewsOK Modified: March 4, 2014 at 6:23 pm •  Published: March 4, 2014

LANSING, Mich. (AP) — Bipartisan legislation designed to ensure that local governments' budgets would not be harmed when manufacturers and small businesses get a tax cut won easy approval Tuesday in the state Senate, five months before a statewide vote on the tax overhaul.

The 10-bill package, passed on 36-2 votes, goes to the House — where it also is expected to face no hurdles.

Gov. Rick Snyder and legislators in late 2012 phased out taxes on industrial machinery starting in 2016 and small businesses' equipment beginning this year but left unresolved a way to ensure counties, cities and townships — some of which rely heavily on the revenue — are made whole. The legislation would fully replace their lost revenue with a portion of Michigan's 6 percent tax on out-of-state purchases and a special state assessment on businesses that benefit from the tax cut.

The bills supported by the Snyder administration, business interests and local officials could ensure that the ballot proposal — needed to dedicate revenue specifically to local governments — faces no organized opposition.

Though the legislation has broad bipartisan support, it was opposed by two Democrats.

Minority Leader Gretchen Whitmer, D-East Lansing, questioned if the tax cut could lead to cuts in state services. She also raised concerns that the plan could run afoul of tax-limiting provisions in the state constitution and inappropriately tell the state elections board how to write the ballot question.

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