A Michigan ballot drive is moving forward with collecting signatures despite facing a setback this week before a state elections board.
The measure would add an extra 5% income tax to earnings over 500,000 each year for individuals, $1 million for joint filers, and put that new revenue toward schools.
At a meeting Thursday, the Michigan Board of State Canvassers couldn’t agree on how to properly summarize that for the petition. That's even though the board already did approve a summary, before rescinding it a couple of weeks later.
Much of the disagreement focused on how to properly describe who all would be affected, whether the extra 5% was a surcharge or part of a graduated tax system, and how specifically that new revenue would be spent.
At Thursday’s meeting, the board did verify that the petition form itself was correctly formatted.
Jessica Newman with the Invest in MI Kids coalition said the campaign should be fine to roll with that original summary language.
“You heard testimony from the Board of Canvassers themselves saying nothing has changed between the June meeting and now. Which means that we are perfectly, legally, within our right to go forward with that petition that was approved unanimously yesterday with the language that was approved on June 27,” Newman said in an interview Friday.
There’s a risk though. Not having board approval on final summary language could potentially open the campaign up to lawsuits down the road that may claim the petition was misleading.
The board rescinded its summary language approval last month to allow for more time for public comment.
At Thursday’s meeting, several business groups that were not at the original hearing showed up to express concerns that the proposed state constitutional amendment could end up costing small businesses more. That’s since some could file their taxes as individuals.
West Michigan Policy Forum President and former Republican Michigan House Speaker Jase Bolger was among those who spoke out. In a statement, he later praised the board for deadlocking on the matter.
“The proposal isn’t a simple adjustment—it introduces a permanent, constitutional tax increase of 9.25%, more than double the current income tax rate, and disproportionately affects Michigan’s small businesses, which make up over two-thirds of those who would pay this new rate,” Bolger’s statement read.
But Newman vehemently disagreed with that premise. She argued few people or small businesses would make enough money to get hit with the proposed additional tax.
“If you are a small business that records your income as individual income, you only report the income that you make after you’ve already invested in your business, paid out salaries, done research and development, done expansion, and after all of the deductions that are available to you as a small business owner,” Newman said.
