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Friday, March 25, 2011

GOP Michigan House, Senate leaders offer compromise to Gov. Snyder 'Shared Sacrifice' proposal, which he rejects


Photo Credit-ROJS News Blog/
Monica RW
Lansing, Michigan Capitol Building
GOP House and Senate Leadership
disagree with Gov. Snyder version of
'Shared Sacrifice" in one hour meeting
at in Lansing on March 24th. 
Michigan Governor Rick Snyder, in counter to his falling approval numbers from state voters, rejected a compromise offered March 24th by Republican lawmakers. 


The compromise  have hiked the Snyder's proposed business tax in exchange for eliminating the plan to tax retirees’ pensions.

In a closed-door meeting, members of the GOP leadership in the state House and Senate offered a fair and just plan; to relive the state budgetary woes by proposing raising Snyder's 6 percent corporate tax to 6.75 percent, and to levy it on all but the smallest companies in Michigan.

Snyder’s Republican counterpart lawmakers contend that the amended tax, combined with additional spending cuts, would allow for the restoration of the broad exemption on pension taxes, which costs the state $900 million a year.

Still, Gov. Snyder refused to budge on the tax on pensions, according to Sen. Jack Brandenburg (R-Harrison Township) to the Oakland County Daily Tribute, calling it a ‘fairness issue’. Instead, Snyder insisted that the exemption for seniors, the most generous in the nation, must go.


In addition, Snyder would not bulge on his proposal to eliminating numerous tax credits, in the form of raising taxes on, Michigan’s lower income residents. The changes in Michigan tax policy sought by Snyder are integrated into a controversial "shared sacrifice" plan that mixes tax reform with budget cuts.
"I want to work with him, I do," said Brandenburg, who chairs the Senate Finance Committee, "but I can't because he has a $900 million money grab in there, and there's no guarantee that the tax cuts for businesses will generate a lot more jobs."
The governor acknowledged that levying the standard income tax on retirement income has very little support among fellow Republicans in the House and Senate. Brandenburg said the governor listened passively as the compromise plan was laid out, but he was adamant in maintaining the pension tax, despite widespread public opposition and a Capitol demonstration by seniors.

Reviewing the tealeaves from this meeting with Governor Snyder and House/Senate state legislators, it would appear that Republicans leaders who know that they are facing re-election in just two years in 2012, don’t want to have their electoral future on Snyder’s “Shared Sacifice” proposals.

Among those who attended the meeting were Senate Majority Leader Randy Richardville (R-Monroe), House Speaker Jase Bolger (R-Marshall), House Tax Policy Committee Chairman Jud Gilbert (
R-Algonac) and Brandenburg.

Snyder's plan would levy a 6 percent corporate income tax only on so-called "C corporations" -- those that issue public or private stock offerings. The result would be $1.7 billion in tax relief for the private sector. 

Owners of other businesses--i.e.-partnerships, S-Corps, sole proprietorships or limited liability corporations -- would pay individual income tax on their earnings as they currently do, but no corporate tax, resulting in no tax savings at all for some of Michigan's smaller businesses.
"If you really want to talk about fairness, why is he only taxing the C-corps?" Brandenburg asked.
The GOP compromise would levy a 6.75 corporate tax on all employers except those who bring in $350,000 or less in annual revenue. That $350,000 cut-off exists under the current Michigan Business Tax and would clearly continue under the Snyder plan.

State GOP House and Senate leaders would be wise to either reject Governor Snyder’s plan or bring their compromise deal as an amendment to Snyder’s fiscal budget proposal. 

According to a March 22rd Public Policy Poll on his 'Shared Sacrifice' fiscal budget proposal, as a whopping 50% of registered voting Michiganders disapproved of Gov. Rick Snyder’s job performance to date with only 33% approving.

Also, if the November 3rd, 2010, election between candidate Rick Snyder and Democratic challenger, Lansing Mayor Virg Bernero was held today; Snyder would lose with Bernero edging out the current Governor by a 47 to 45% margin.

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