Deal Could Be Coming: Senate Poised to Tackle Taxes Sunday

By: Tony Tagliavia Email
By: Tony Tagliavia Email

A late-night vote in the Michigan House puts a possible income tax increase and a possible expansion of the sales tax in the hands of the Senate.

House Speaker Andy Dillon says both sides are moving toward a deal.

"I'm very encouraged by the progress we've made today and I expect you'll see more progress every day," Dillon (D-Redford Twp.) said.

And more progress will be needed because it's far from a done deal. The income tax and sales tax bills do not include any new rates. Those numbers will likely be negotiated in the coming days and would be presented in the Senate bill Sunday.

The House's move is still a critical step, though, because the Senate has to wait five days to vote on any tax increase passed by the House.

So with a government shutdown looming October 1st, any action -- even if it comes without new tax rates -- makes that shutdown less likely.

Gov. Jennifer Granholm spent part of Tuesday advocating for new taxes as part of a budget solution. Flanked by health care workers, the governor said Medicaid reimbursements would be reduced under a cuts-only budget.

That move could lead doctors to refuse Medicaid patients, ultimately adding to the overcrowding problem in hospital emergency removes.

For its part, the Senate passed reform measures that could save money in the long term. And although he says he wants to see some cuts first, even Senate Majority Leader Mike Bishop put forth a budget plan that included a higher income tax rate.

"We did that in the spirit of bipartisanship to end this shortfall," Bishop (R-Rochester) said. "Our responsibility now is to come up with reasonable, rational and quick outcome."

At the end of the meeting with reporters, Bishop said the Senate is ready to vote on Sunday if necessary.

So while procedure stands in the way, there is evidence of movement toward a deal that could include an income tax increase and a sales tax expansion.

Details of such a deal will likely emerge Sunday if one isn't announced before then.

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  • by Charlene Location: Bellevue on Sep 19, 2007 at 08:39 PM
    From what I understand about the tax increase, they want to increase the rate from 3.9% to 4.4% -- that's only .50% -- on $40,000 thats $200 per year or $3.84 per week. Really not much to sacrifice in order save our state government. We, as Michiganders, probably misuse more funds than that in a year. I do agree we need to control our spending and quit wasting money.
  • by william Location: holt on Sep 19, 2007 at 06:15 PM
    if they start cutting medicade and other social programs we all will be effected.includeing children.did your gas bill go up last winter?the cost of gas products. how much do you think the gov pays for heating the capital building? the lights and water bills?no we don't get pay raises like we should but thats the employers fault not the run mich they have cost many don't think about.if it wasn't for social programs,many workng families would be homeless or in bad health do to cuts in health program,medicade.and the eldrery would suffer deeply if all they got is there social secerity.churches do all they can,food banks isn't nearly enough.some people have no clue to the effect cuts will do.and the schools will get it too.other states are having problems,or will matter where people go it will hit sooner or later.mich problems happened along time ago,it won't be fixed over nite.without higher taxes,there will be no state.I think were getting off cheap.
  • by Chris Wilson Location: Webberville on Sep 19, 2007 at 09:10 AM
    This state government needs to control spending and cut out government waste.Continually raising taxes is not the solution to our problems here in Michigan.Tax increases make it more and more difficult for us to make a living here in Michigan.Cut spending,balance the budget,before you tax us right out of the state.I have lived here all of my life,but with dropping property values,gas prices,and the ammount that i am being taxed already. I see no other solution than to pick up and leave Michigan if the solution to all of our problems is to simply keep raising taxes.I know its hard work, and tough choices have to be made, But thats why we elected our state reps.
  • by David Location: MI on Sep 19, 2007 at 08:03 AM
    Maybe its time to streamline state government and privatize some agencies? This would save the state millions if they didn't have to control so much. There could still be some state oversight on those programs/agencies but let the private sector run them. The state needs to live within its means. And if you can't afford something, you don't do it...just like we have to. We don't need all these huge social programs Jenny wants. She wants too much too fast. When you don't have money you don't keep spending more. Wait until things get better than some of these programs she wants could be taken into consideration.
  • by Pam Location: Jackson on Sep 19, 2007 at 05:46 AM
    What are the pet projects people did not want to lose? There are some services that should be turned over to non-charitable organizations. They find the people who can help instead of having dealing with the red-tape of government.
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