Senate Passes Own Revenue Plan

Late last night, the Senate Republican caucus produced their own response to the call for additional revenues to help balance the FY10 budget.  Their proposal, as originally presented, would have raised about $327 million for the current fiscal year.  The immediate plan was to use $100 million of that new revenue to break the logjam on the K-12 education budget.  The other major item that the proposal called for was to begin phasing out the surcharge on the Michigan Business Tax, over three years.  While there was no specific allowance for a restoration of revenue sharing cuts, the original proposal left about $63 million unallocated after K12 and the surcharge phase-out were accounted for.  Contact with Senators and Senate leadership staff indicated that discussions on using those dollars to help restore some of the revenue sharing cuts would take place next week.  The new revenue would be raised mainly from a freeze on the expansion of the Earned Income Tax Credit, scheduled to go into effect next year, and a number of changes to business tax credits within the Michigan Business Tax structure, including caps on the new Michigan Film Credits.  For more details, see the Senate-passed versions of Senate Bill 838 and House Bill 4514 .