Recently, Michigan’s new Governor, Rick Snyder (R-Ann Arbor), unveiled his first budget plan to members of the state legislature to cure our Fiscal Year 2012 $1.8 billion deficit. The sweeping proposal includes a significant cut to state spending as well as major changes to the way individuals and businesses are taxed and the form that appropriations bills will take upon presentation to the legislature.
The budget proposal eliminates a significant level of double taxation and streamlines the process for Michigan employers. While the 6% profits tax on C-corporations (as a replacement to the Michigan Business Tax, its 22% surcharge and our credit-friendly tax code) have garnered most of the attention by the business community, the Michigan Association of REALTORS® (MAR) is working hard to understand some of the finer points of detail to the budget proposal.
Specifically relating to real estate, we are concerned with the potential elimination of important incentives for redevelopment of our urban centers relating to brownfield redevelopment and historical preservation. This represents Governor Snyder’s philosophic approach to budgeting, where the tax code would not be used to financially pick winners at the expense of all others that pay into the system. The Governor has consistently indicated that we need to provide as predictable and level of a playing field as possible for all business to flourish in our state.
Note that it is very early in the budgetary process. The legislative appropriation bills have yet to be introduced in the House and Senate for more detailed review by the respective Appropriation Committees. MAR staff and leadership continue to meet continuously with Snyder Administration officials, key members of the Michigan Legislature and our natural allies in the business community to evaluate to pros and cons of the greater budget proposal as well as finer policy details as they become available.
Know that Governor Snyder’s budget proposal represents a giant step forward for the business community which will help stabilize Michigan’s economic environment. MAR will continue to work wherever possible to promote the responsible use of redevelopment tools that have realized significant positives for Michigan employers and rebuilt our cities.