Deal on Tax Cut Freeze

By: Tim Skubick
By: Tim Skubick

Michigan schools, colleges and cities will share in a $77 million savings if lawmakers ratify a compromise reached by the governor and the senate majority leader.

Gov. Granholm and Sen. Ken Sikkema want to pause a state income tax rollback from four-percent to 3.9-percent for six months. The rate cut would then take effect July first of next year.

In return for that, the governor gave the GOP a 40-percent slice out of the health care tax now paid by small businesses to be phased in over the next two years.

Sikkema called the deal "fair and reasonable" even though his party chair, Betsy DeVos has called the income tax pause a tax increase.

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