(Michigan) New fees, taxes to add $391M (Early Collection, DEATH TAX, Smoke Tax, Booze Tax)

Lansing State Journal ^ | 2-13-03 | Stacy Range

[Dan from Michigan]

New fees, taxes to add $391M
GOP lawmakers, businesses vow to fight increases

To view the entire budget, go to www.michigan.gov.

By Stacey Range
Lansing State Journal

Homeowners, smokers, drinkers and the wealthy would shoulder much of the burden in solving the state's $1.3 billion budget shortfall under Gov. Jennifer Granholm's budget proposal for the 2005 fiscal year.

The proposal, unveiled Thursday, includes earlier county tax collections, higher cigarette and liquor taxes, creation of an estate tax and a $9 increase in fees for copies of marriage licenses, death and birth certificates.

The tax and fee increases would bring in $391 million more for the fiscal year that begins Oct. 1. Moving up county tax collections from December will save the state $150 million. Payments would be due no later than Sept. 15.

It also will be the change most felt by Michigan residents such as Larry Slater of Lansing.

"I don't know that I could swing that," Slater said. "All of a sudden coming up with $400 to $500 would put a stress on me and a lot of other people."

Granholm said the changes and tax increases are needed to balance the budget.

"We have made all the cuts we believe are appropriate," Granholm told reporters after a joint meeting of the legislative appropriations committees.

"This is a blend of solutions," she said.

A vow to fight

But Republican lawmakers and the Michigan Chamber of Commerce said the state should look for more cuts before raising taxes. They vowed to fight many of the tax increases.

"A very small population of the state is being targeted to solve a significant chunk of the budget problems," chamber spokeswoman Tricia Kinley said. "We need to cut spending, not raise taxes."

The change in property tax collections is similar to one made last year, when the December payment on state property taxes for schools was pushed up to July to offset a state deficit.

Under the latest proposal, home and property owners would not pay more, but they would pay all of their county taxes in the summer rather than half in the summer and half in the winter.

The change would offset a $150 million statewide cut in revenue sharing to counties.

In Ingham County, the earlier collection would mean the owner of a $100,000 house with a taxable value of $50,000 at about 8 mills would have to pay about $400 this summer instead of $200.

Moving up the tax payment date would give counties overall about $1.4 million they could draw on each year to get the same amount that they would have received in revenue sharing payments.

Mortgage companies that collect property taxes could ask for an increase in escrow accounts.

Substituting a state inheritance tax for a federal one that is ending would affect about 900 Michigan households with estates of more than $1 million.

The new tax - which would not be levied against family-owned farms and businesses - would bring in $94 million in fiscal year 2005, plus $130 million each year thereafter.

The tax rate would be based on a graduated rate schedule ranging from 4.8 percent to 16 percent depending on the size of the estate.

Someone who inherits a $3 million estate would pay about $182,000 in taxes.

More expensive drinks

Granholm also proposed raising the state's liquor markup from 65 percent to 74 percent.

The increase in allowable profit margin would raise an estimated $35 million more, with some of the increase going to pay local governments for providing fire protection for state-owned buildings and $32 million going to the general fund.

Raising the cigarette tax from $1.25 to $2 per pack would cost a pack-a-day smoker about $274 a year.

The increase would bring in about $295 million more annually and help cover rising Medicaid costs.

Granholm said people can avoid paying the tax if they quit or cut down on their smoking, improving their health.

John Gibson, 56, of East Lansing said he might have to quit.

"I can't afford that," he said. "They should pick on someone else."

[Dan from Michigan]

HELL NO!!!!!

[agitator]

I think your legislature has been attending the People's Democratic Republic of Taxxachusetts School of Government when you folks weren't watching.

[FourPeas]

OK, so obviously my free time today will be contacting my representative and senator. Good 'ole Jenny.

[looscnnn]

Looks like I got out of MI just in time. I wonder what my family still in MI think about it, looks like I will be on the phone this weekend.

[facedown]

The increase (in cig tax) would bring in about $295 million more annually and help cover rising Medicaid costs.

1. It won't bring in nearly that much due to Indian sales, stuffyourown.com and outright black market.

2. Not a nickel of it will go to Medicaid, just the General Fund.

[ClintonBeGone]

Smokin Bump

[CSM]

Let's review the current state of the State:

Electricity costs are going up!

Gas prices are going up (home heating)!

Water costs are going up!

Property taxes will now be collected 6 months early (cost of money hit to property owners)!

The big 3 are hurting and can't give raises this year. Other businesses are hurting because of this, the citizen isn't getting an increase in their income.

I wish I could just pass my increased costs on to someone else. Instead, I get to evaluate my wants vs. needs and adjust my lifestyle based on my available income. The government never even thinks of that! They will be shocked when bankruptcies, property tax defaults, utility bill delinquincies and foreclosures all increase. They will blame the companies that can not afford to give raises due to the increased overall government costs!

Then there is this:

"Granholm also proposed raising the state's liquor markup from 65 percent to 74 percent."

That is just sick! What was the rate of tax on tea?

[Kieri]

My husband is one of those State of MI employees who have to work 40 hours and get paid for 38, thanks to the Canadian Trash in the governor's mansion.

There's word that she's going to go after septic tank owners statewide and insist on annual (expensive) inspections to "protect groundwater."

This woman would charge a Fart Tax if she could figure out how to hook a meter up to our butts.

[CSM]

Just damn! How does any government justify not paying for 2 hours worked and forcing private business to a minimum wage? How is this acceptable but Walmart was pounded by the press for their "off the clock" working issue? Just damn!

[quantim]

Hey Dan, I've been watching this too. Granholm is trying to take the sneaky way out. Her strategy is to nail everyone on "fees" rather than call it a tax increase. That way she can claim to be the "tough" governor without raising taxes, and get away with it.

My MI R.E. annual license fees went WAY up without notice, for example. I don't believe she'll get away with it quite so easy, state govt will have to cut, only a matter of time. 3-term Engler is missed. T.

[Buckeye McFrog]

as a former Michigan and current PA resident........
WE GET WHAT WE VOTE FOR! Elect a Democrat to
your Governor's mansion and that is exactly what
you are going to get. The ex-Canadian lady
running Michigan is certainly better looking than
Ed "The Philly Godfather" Rendell, but under the
skin they are identical....tax tax tax, spend spend
spend!

Just remember guys....your Union told you to vote for them!

[quantim]

This woman would charge a Fart Tax if she could figure

Hey, don't laugh, they're already trying! LOLOLOL!

[RckyRaCoCo]

Don't blame me, I voted for Posthumus. And I didn't even get the day off(U.A.W).

[sergeantdave]

Can we recall this Canadian Marxist?

[writer33]

Welcome to the Socialist Republic of Michigan.

[CSM]

I agree. Ijust wish the sheep would see the harm this causes as the dem standard. Instead, it will end up being a tool to use in furthering the anti Bush agenda. As these actions further destroy the economy, the "it's Bush's economy" chant will get louder!

[SheLion]

[dakine]

What has happened to Michigan? bring back Milliken...

[Dan from Michigan]

Milliken's a lib, no.

Bring back the John Engler from his first two terms....

[dakine]

But he was honest...at least that's what I remember...