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Whitmer’s population group eyes tax hikes for residents

Governor’s appointed population growth council considers tax increase plans for schools, roads, local governments

Metro | Published November 2, 2023


By Jonathan Oosting/Bridge Michigan

LANSING — Members of Gov. Gretchen Whitmer’s population growth council may recommend plans that include tax increases to fund schools, roads and local governments, according to newly public reports.

The reports were shielded from public view earlier this month when work groups reported vague recommendations to the Growing Michigan Together Council, a bipartisan panel appointed by Whitmer in a bid to find ways to boost the state’s stagnant population.

The council published the work group reports online after Bridge Michigan filed a Freedom of Information Act request for the documents.

One report shows a PreK-12 Policy work group is recommending the council study how much funding schools need, “including potential revenue generation realized by modifying current taxation and budgeting practices.”

Another work group is recommending a change in property tax law that would allow local governments to raise rates more quickly as property values increase, while others raise the possibility of “broaden(ed) funding sources” for roads.

The report does not mention any specific tax increases, but proposals are causing dissent among some members of Whitmer’s group, which is charged with providing her with recommendations by Dec. 1.

Republican education work group member Patrick Anderson objected to the recommendation on school taxes, suggesting it could require a major overhaul of the state’s funding formula that relies on constitutionally dedicated sales and property taxes.

“These would be radical changes involving the income tax, sales tax, property tax, local school operating and debt millages as well as the per-pupil guarantee and the dedication of the School Aid fund in the Constitution to both secondary and higher education,” Anderson told colleagues in an Oct. 7 email dissent shared with Bridge. “There is indeed a need to improve school governance and finance. However, I and multiple other members of the group feel that changes in revenue must follow, not precede, improvements in accountability and performance,” he added.

Anderson had asked work group chairs Karen McPhee and Chandra Madafferi, who is president of the Michigan Education Association union, to include his written dissent in the PreK-12 recommendation report. They declined to do so, telling him that “would have required us to offer an opportunity for every work group member to write dissenting viewpoints, and that was not in our charge.”

McPhee, in an email provided by Anderson, said the work group is not specifically recommending policymakers propose changes to the Michigan Constitution to fund schools, which would be required to raise or otherwise change the state’s 6% sales tax.

But the work group recommendations, “leave the possibility” of a constitutional amendment “on the table and suggest teams of experts be charged with considering everything necessary to build, govern and fund a newly designed high-performing system of public schools,” McPhee wrote.

The work group reports are not final recommendations but will inform further work by the full council.

The group is charged with providing “short-term, medium-term, and long-term policies” proposals to Whitmer, who would then have to work with the Legislature to enact any recommendations.

Other potential tax changes eyed by the group include:

A potential change in property taxes for local governments, which have long complained their financial recovery from the Great Recession was slowed by the voter-approved Headlee Amendment of 1978, which caps annual growth in taxable value at the rate of inflation of 5%.

Another work group is recommending the council figure out a way to “raise additional annual funding to maintain our current system of roads” and decrease the state’s reliance on fuel taxes, which are projected to decline as consumers purchase more electric vehicles. It suggests a phased-in plan.

A Jobs, Talent and People work group is suggesting a series of targeted tax credits to address workforce shortages and attract new hires to the state.

Increasing the state’s child tax credit to better support low-income families and suggests a new credit for small businesses that offer paid parental leave.