Michigan's income tax rate will drop by a fraction of a percentage point next year. That's because the state formally closed the books on the last fiscal year yesterday with a surplus that triggers the cut.
An opinion from Michigan Attorney General Dana Nessel says that rollback is due largely to a one-time windfall of federal COVID recovery funds. So Nessel says the tax reduction will only be for this current tax year.
Republicans in the Legislature are already pushing back. Senate Minority Leader Aric Nesbitt says the attorney general doesn’t get to decide whether the tax rollback is temporary or permanent. He says that's up to the Legislature, controlled now by Democrats.
“They know how politically unpopular that is, and so they’re trying to use every game possible and what they’re doing in my reading of it is not legal.”
Nesbitt says he expects a lawsuit if the Whitmer administration tries to restore the rate to its original level after it's reduced for one tax year.
The state treasury department says the tax rate reduction will save the average family about $50 dollars.
