The Latest: Snyder still has concerns with income tax cut

LANSING, Mich. – The Latest on the Michigan House’s consideration of income tax cut legislation (all times local):

8:30 p.m.

Gov. Rick Snyder still has concerns about the fiscal implications of an income tax cut after House Republicans revised their legislation.

The Republican governor issued a statement Tuesday night saying he appreciates that House leaders took seriously his concerns. But he says he still has “a billion dollars’ worth of concerns because there has been no plan presented as to how this will affect residents and their communities statewide.”

Snyder notes that reducing the 4.25 per cent income tax to 3.9 per cent over four years would reduce revenues by $500 million in 2019 and more than $1 billion by 2022 — years when more money will be spent to improve roads and bridges.

House Republicans on Tuesday decided to phase in the tax cut over four years instead of implementing it one year. They also dropped their push to eliminate the tax over decades.

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4:45 p.m.

House Republicans have significantly revised their income tax cut plan, proposing to drop the 4.25 per cent rate to 3.9 per cent over four years and no longer calling for the tax to be phased out entirely over decades.

Legislation that cleared a committee last week would have cut the tax to 3.9 per cent in 2018. Under changes to the bill made Tuesday, the tax would drop by one-tenth of a percentage point annually from 2018 through 2020 and 0.05 percentage points in 2021.

A final vote on the measure was not taken, as it appeared majority Republicans did not yet have enough support to send the bill to the GOP-controlled Senate.

Gov. Rick Snyder has expressed “serious concerns” with cutting the income tax.

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2:05 p.m.

The leaders of Michigan’s 15 public universities are lobbying against an income tax cut they worry would lead to state funding cuts.

At least half of the school presidents stood outside the House chamber Tuesday, pressing lawmakers to oppose the legislation that cleared a committee last week.

University of Michigan President Mark Schlissel said families already are struggling to afford college, and “we don’t want to make those challenges greater.”

The bill could be voted on as early as Tuesday. It would drop the 4.25 per cent income tax to 3.9 per cent in 2018 and then reduce it by one-tenth of a percentage point annually until the tax’s elimination.

Schlissel says Michigan must “invest in the common good” and a major tax cut would have a “profound and adverse impact.”