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Friday, April 10, 2020

Seniors, state reps speak out against lack of pension tax reform in Whitmer's budget proposal

Taxes

By Tamara Gabbard | Mar 2, 2020

Pensions(1000)

Multiple Michigan state representatives and senior residents are criticizing Gov. Gretchen Whitmer's 2021 state budget proposal, which excludes a repeal of the pension tax she had promised in her 2018 campaign.

"This is a particularly shocking move by the governor because for decades Democrats have accused Republicans of using the pension system as a piggy bank," State Rep. Thomas Albert, R-Lowell, wrote in a column for Crain's Detroit. "Now, given the opportunity to improve a broken system, Whitmer instead plans to use money that should be going into the public-school employee retirement system for other purposes."

The only way to get rid of the pension tax would be to find new ways to replace the revenue so other essential public services aren't robbed, State Budget Office Spokesman Kurt Weiss told the Detroit Free Press.


Michigan Democrat Gov. Gretchen Whitmer | Michigan.gov

"The Whitmer administration's rationalization for deferring these costs is to get nice headlines about proposed school funding increases – while ignoring the future ramifications," Albert wrote. "Unfortunately, we do not live in a world where a politician can get front-page headlines for prudent financial management."

These headlines Albert is referring to highlight the 4.9% increase to the school aid fund, which include base fund increases per student from $150 to $225, $27.9 million for the Going Pro job training grant program, and $35 million for the Reconnect program to allow adults tuition-free upskill options toward associate degrees and certifications. 

"This is a thoughtful budget that focuses on increased funding for education and skill development, providing for the health and needs of working families, and protecting Michigan's water," Whitmer said, as reported by the Detroit Free Press. "Our future depends on making strong investments in these core priorities, and while we cannot correct decades of underfunding overnight, particularly in the area of education, this budget builds on last year's budget to provide additional funding in these critical areas."

She did include a repeal to the pension tax in last year's proposal, which she linked to a corporate income tax increase and rejected by Republican lawmakers. And although she did not put it in the revised 2021 budget plan, she still wants to work together with the state to find a way to repeal the pension tax, Whitmer said at a news conference on Feb. 6.

"I am so sick of politicians making these promises to get elected, then never following through," Rochester Hill resident and retired dentist Ron Miakinin told the Detroit Free Press. 

Leaving the pension tax repeal out of the budget ultimately makes it seem like it is totally out of the question, Miakinin said.

"I have said this before, and I'm going to keep saying it until it gets done – we've got to repeal the pension tax in Michigan. It's crippling the finances of seniors across the state, and we've got to get rid of it.". State Rep. Joe Bellino, R-Morris, said in an open statement to the press. "The governor campaigned on repealing the pension tax and included a repeal proposal in her initial budget recommendation last year.

"But she does not include that repeal in her new budget proposal," he continued. "That's disappointing. We need the Legislature and the governor working together so we can stop balancing the budget on the backs of our seniors. They've paid taxes their whole lives, and they deserve some relief in retirement."

The proposal does include over $120 million for health and environmental grants that further enhancements to public school infrastructure and investing in the fight against climate changes that have threatened Michigan with rising water levels. 

"I look forward to talking with Gov. Whitmer about the priorities her team laid out this morning," Speaker of the House Lee Chatfield said in a statement. "There are some areas where we will have to improve upon her agenda, where she continued to pick winners and losers with school children and rural Michigan families. But there are also many areas where we all agree and can work together to get things done for the people we serve, including fixing our crumbling roads and the help for shoreline erosion we requested."

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