The Michigan Legislature is on a three-week summer recess after finalizing budget bills and sending them to Governor Gretchen Whitmer’s desk last week. But lawmakers’ work on spending plans is not over with several billion dollars still waiting in the bank.
Much of the extra cash comes as inflationary pressures bedeviling consumers boost state sales tax revenue. Also, there’s money from the American Rescue Plan waiting to be spent.
Inflation is what’s most troubling, said Republican Representative Thomas Albert, who chairs the House Appropriations Committee. His concern, he said, is a fiscal version of what goes up, must come down.
"I think we just need to be cautious,” he told Michigan Public Radio. “That was one of the biggest reasons I didn’t want to spend it all. I thought that would put us in a bad spot if we have to change our revenue projections.”
But Albert would still like to see a rollback in the state income tax rate which would also have an effect on budget revenue. And that’s a concern to Democrats.
Senator Curtis Hertel is the top Democrat on the Senate Appropriations Committee. He said there’s a lot that can be done without resorting to measures that could be future budget-busters.
“There’s still a lot of money on the books,” he said. “We still have a $6 billion, over $6 billion on the books in one-time funding and additional funding, so we still have work to do.”
A future deal could include targeted tax cuts to help people deal with inflation and rising fuel prices. Governor Gretchen Whitmer has called for a temporary “sales tax holiday” on gasoline purchases. Many Democrats in the Legislature say they’re also open to a one-time income tax rebate.