Michigan Democrats, Michigan Republicans, Rick Snyder, Taxes — January 17, 2018 at 4:06 pm

Michigan Republicans & Democrats come together to embarrass Gov. Rick Snyder in historic veto override


Last year in a rare exhibition of bipartisanship, the Michigan state senate voted unanimously and the House voted 89-11 to pass a new rule involving the taxation of a purchased vehicle when someone trades in another vehicle in the transaction. Under a 2013 law, buyers initially could exempt the value of the trade-in vehicle up to $2,000 from the sales tax. The value is to increase by $500 each year over 25 years (it is currently at $3,500.) These two bills would dramatically accelerate the increases.

Here is the full explanation, via the non-partisan Senate Fiscal Agency:

Beginning December 15, 2013, the dollar amount was limited to $2,000. The amount increased to $2,500 on January 1, 2015, and to $3,000 on January 1, 2016, and must increase each January 1 thereafter by $500 until the year in which the limit exceeds $14,000 (i.e., 2039), when there will be no limit on the value excluded from taxation.

Under the bills, the $500 annual increase would apply through 2018. On January 1, 2019, the set dollar amount would be increased to $5,000. Beginning January 1, 2020, and each January 1 thereafter, the amount would increase by an additional $1,000. (Under Senate Bill 94 (S-2), this schedule would not apply to recreational vehicles, although Senate Bill 95 (S-2) refers to both motor vehicles and RVs.) Beginning on January 1 in the year in which the amount exceeded $14,000 (i.e., 2029), there would be no limitation on the agreed-upon value of the motor vehicle used as part payment.

Rick Snyder, who has, along with this Republican colleagues in the state legislature, essentially emptied the state’s coffers by passing massive tax giveaways to corporations vetoed the two bills because they would have had too much of an impact on state tax revenues. However, according to the Senate Fiscal Agency’s analysis, “the bills would reduce sales and use tax revenue by approximately $8.4 million in FY 2018-19, $17.7 million in FY 2019-20, and $28.7 million in FY 2020-21.”

This, of course, is a pittance compared to the corporate tax breaks Snyder and his corporatist pals in the state legislature passed when they took office in 2011, particularly when you consider that the state budget was $56.5 billion in 2017.

And let’s be clear, this extra money in the pockets of Michiganders is pretty much guaranteed to be put right back into the state’s economy. “We should join dozens of other states in making this critical fix,” Flint Democrat and Senate Minority Leader Jim Ananich said. “Here is something that puts money in the pockets of Michganders and supports the auto industry. We can’t continue to balance the state budget on the backs of regular folks.”

The override vote was once again unanimous in the Senate and 85-23 in the House. This move by the state legislature is historic. It’s the first override of a governor’s veto since 2002 and one of only six such overrides in 66 years.

You have to hand it to Gov. Snyder. It takes a tremendous amount of effort to get Michigan Republicans and Democrats to see eye to eye on ANYthing. But he found a way to do it. Not much of a shock that it had something to do with lowering the taxes of average Michiganders.

[Caricature by DonkeyHotey from photos by Anne C. Savage for Eclectablog]