The Michigan Senate could advance its full budget proposal to the House of Representatives by the end of next week.
The Senate Appropriations Committee this week advanced spending bills for each of Michigan’s departments, higher education, and school aid to the full chamber for debate.
Committee chair Sen. Jim Stamas (R-Midland) said negotiations so far have mainly been among subcommittees and between Senate Democrats and Republicans.
“There hasn’t been as much discussion either with the State Budget Office or the House at this point,” Stamas said, noting each group currently has its own plan. “The governor put forward hers. The House is putting forward theirs. So, let’s get it to the House, and then we’ll definitely start more of the conversation at that point.”
Some Democratic lawmakers were already expressing concerns.
For example, the current Senate proposal leaves out millions of dollars for workforce development that the governor recommended in her executive budget.
Sen. Curtis Hertel (D-East Lansing) said lawmakers haven’t entered the serious negotiation phase yet.
“You need a majority of the House, a majority of the Senate, and the governor to get anything done. As so, I’m looking forward to those real discussions. What we’re doing right now, it’s an important part of the process but it’s not anything that I would consider real,” he said.
Lawmakers are aiming to get a complete budget done by mid-summer.
One point that’s gotten attention recently is a $2 billion tax cut appropriation listed in the Senate’s proposed general government budget.
“We have not specified what type of tax cut. I mean, there has been discussion both on income tax by the governor, by the Senate, by the House. But we’ve also had the discussion about sales tax off from gasoline as well,” Stamas said.
He also acknowledged conversations have taken place over the allocation potentially being used to raise Michigan’s earned income tax credit.
Advocates say doing so would encourage employment while helping low-income earners.
At a press conference Thursday, supporters rallied behind a proposal to raise that state tax credit from 6% of the federal credit to 30%.
“[It’s] basically a tax cut for working families. It was first established at the federal level by President Ford, vastly expanded by President Reagan and then expanded again several times by subsequent presidents, both Democrat and Republican,” former Michigan Senate Majority Leader Ken Sikkema said.
He noted Michigan’s current EITC is among the lowest in the nation among states that offer it.
While the future of the current Senate proposal is uncertain, House lawmakers seem also keen on offering tax cuts.
A budget proposal in that chamber sets aside $1 billion for possible tax breaks.