Public Media from Michigan State University

Lawmakers Approve Bill To Avoid $1 Billion Budget Hole

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It looks like Michigan will not face a billion-dollar budget hole due to a recent state Supreme Court ruling after all.

As The Michigan Public Radio Network’s Jake Neher reports, state lawmakers approved a bill Wednesday in response to the ruling.

The Supreme Court decision dealt with changes the Legislature made years ago to the Michigan Business Tax. It allowed many out-of-state businesses to dramatically reduce their tax bills. This new bill fixed the issue and applied it retroactively, so the state can avoid having to pay out up to about $1 billion in tax refunds.

Republican state Senator Mark Jansen said the Supreme Court ruling created a major tax loophole.

   “We never intended them to be able to do this,” he says.

But a handful of lawmakers – including Republican Senator Jack Brandenburg – aren’t so happy about the bill.

   “At the end of the day, it is a tax increase,” he says.  “I’m not about tax increases.”

The bill now goes to Governor Rick Snyder. He’s expected to sign it into law.

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Jake Neher is a reporter for the Michigan Public Radio Network. He covers the State Legislature and other political events in Lansing.