State tax rollback possible even as Whitmer, GOP disagree on approach

Gov. Gretchen Whitmer hit the road Tuesday to sell her tax cut plans in metro Detroit as hints revealed room for compromise with the Legislature’s GOP leaders.

“I have said seniors and working families are where we need to prioritize,” she told a group gathered at a senior citizens center in Detroit.

Whitmer wants to restore a tax break for public pensions. And she wants to expand the earned income tax credit for low-income families.

Billions of dollars in federal recovery funds could help in the short term to offset the revenue loss to the state budget.

“These are ways that we can help people that have played by the rules, are working their tails off, and struggling to get ahead with inflation and all the other pressures,” she said. “That’s why this has to be our focus: Real tax relief for people who need it the most – our senior citizens and our working families.”

There may be room to work there.

Republican Sen. Jim Runestad, who chairs the Senate Finance Committee, wants to raise the personal exemption for older taxpayers.

“We’re proposing an across-the-board tax cut for everyone who’s over 65 whether they’re back to work because they can’t make ends meet with the inflation, whether they’ve got a 401(k), an IRA, a public pension, a private pension,” he told Michigan Public Radio. “I know we have a meeting coming, trying to get a feel for how open she is to a more broad-based tax cut.”

Republicans also want to roll back corporate income taxes. But Whitmer says that could be a budget-buster in future years. Whitmer says the roughly $2.5 billion plan is not sustainable without big cuts to state services or a new, permanent revenue source.