New Budget Deal Includes Scaled Back Pension Tax
LANSING (WWJ) – Michigan Governot Rick Snyder has announced a revised tax plan that would exempt the retirement income of those over age 66 from state income tax.
Snyder, Tuesday, reached a new budget agreement with key Republican leaders in the state House and Senate, with ta concession from the Governor in the form of a modified pension tax proposal.
WWJ Lansing Bureau Chief Tim Skubick reports that although Snyder’s original proposal included all private pensioners, the Governor has agreed to modify his plan — and Republican state leaders have agreed with him.
Skubick said the new proposal calls for phasing in or scaling back the tax.
If the new plan passes, those are 67 or older, who are on a pension right now, will pay no tax at all.
“The key part for this deal, for the Governor, is he will now bring on board, supposedly, some Senate Republicans who were just dead set against an cross the board pension tax. So, modifying the pension tax not to impact current pensioners is a deal-maker for the Governor,” Skubick said.
In addition, Skubick said the new budget deal will include a freezing of the Income Tax rate at its current level of 4.35 percent. Previously, the Governor said he had wanted to roll that back.
Skubick said that there will also be a new $150 million in cuts beyond what Governor Snyder had originally proposed.
The measure now moves on to the full legislature for consideration.
“This deal is one thing — getting it through the legislature is quite another,” said Skubick, adding that the deal makes the Governor’s hope for an overall budget agreement by the end of May more of a possibility.
“This breakthrough on the budget deal between the two Republican leaders and the Governor will make a major step in that direction. There’s still a lot of heavy lifting to do. May 31st is reasonable. A lot of people in this town believe, however, the middle of June might be more realistic,” he said.
Stay with WWJ for the latest.