Invest In MI Kids Moves Forward After Canvassers Deadlock On New 100-Word Summary

Republicans and Democrats on the Board of State Canvassers deadlocked Thursday over a 100-word summary for the “Tax The Rich” constitutional amendment proposal. However, canvassers approved the petition form for the group, Invest In MI Kids, which left both sides claiming victory.

482Forward Co-Director Molly Sweeney said Invest In MI Kids would be collecting signatures starting in the next two weeks with the 100-word summary that the canvassers passed on June 27 and then rescinded after a technical error that was brought up in a letter by Charlie Spies.

“We’re not going to let the DeVoses or the Heritage Foundation or the wealthiest few in the state get in the way of making sure our kids have what they deserve,” Sweeney said.

Steve Liedel, who represents the ballot question, told reporters and canvassers several times during the meeting that the Bureau of Elections was responsible for writing up what the board had originally approved. He said he wasn’t worried about anything having to do with the rescinded 100-word summary.

“We have a situation where the board refused to perform a statutory duty, which is to approve or reject – setting aside June 27 – they failed today within 30 days of a request to approve or reject a summary,” Liedel said.

He said in the past, courts have ruled that when that happens they have either asked the board to approve or reject, or for the petition to move forward based on the recommendation of the director of the Bureau of Elections.

The Board of Canvassers spent nearly five hours, with an hour of public comment from a packed room, about the 100-word summary.

Vice Chair Mary Ellen Gurewitz and Heather Cummings, the two Democrats on the board, said they couldn’t change anything, because it was already argued and approved during the June 27 meeting, and that the business community that showed up in droves Thursday did not appear before the board during that time.

Gurewitz also said there wasn’t a new argument that was brought up made by many wearing Save Small Business! stickers, or attorneys Eric Doster and Dan Zeigler during Thursday’s packed meeting.

“I think we would be doing ourselves a disservice to essentially let everybody come back and pick apart what we already did,” Gurewitz said.

The original 100-word summary stated: “Constitutional amendment to: add, beginning in 2027, an additional 5% tax on annual taxable income over $1 million for joint filers and over $500,000 for single filers. This tax is in addition to existing state income taxes and is to be deposited into the State School Aid Fund and required to be used exclusively on local school district classrooms, career and technical education, reducing class sizes and recruiting and retaining teachers; and subject funds to annual audits.”

SBAM’s Vice President of Policy & Engagement provided comment about why small business must be mentioned in the petition’s 100-word summary. Watch it here.

National Federation of Independent Businesses Michigan Director Amanda Fisher was one of those who gave public comment to the board. Her argument to the board was reiterated by several who gave public comment.

“Based on IRS data, at least two-thirds of the payers of this new graduated income tax will be Main Street business owners. By not including the impact on small businesses, the current language is misleading and deceptive,” Fisher said.

She said most people who would look at the petition wouldn’t know that small businesses can pay business taxes as individual income tax.

“For these small business owners, all of their net business income is taxed on the individual tax return of the owner, even if the owner draws no salary and takes no distributions of income,” she said.

Chamber of Commerce members, retailers, manufacturers, and other members of the business community argued the language should include that it was a graduated tax, that the 5 percent additional tax on single filers over $500,000 and couples over $1 million per year should also include the 4.25 percent income tax rate, and should remove any examples of how the funding would be spent.

Canvassers Chair Richard Houskamp, a Republican, quarterbacked another iteration of the 100-word summary after a meeting between Doster, Liedel, and Bureau of Elections Director Jonathan Brater. That summary was quickly amended and was the basis for the final deadlocked summary.

The Brater drafted summary stated: Constitutional amendment to: add, beginning in 2027, an additional 5% tax on annual taxable income over $1 million for joint filers and over $500,000 for single filers. This tax is in addition to existing state income taxes and will apply to any business that chooses to be taxed at the individual level. Revenue is to be deposited into the State School Aid Fund. The Legislature may enact consistent laws and must expend revenue to support local school districts in a way that includes funding for career and technical education, reducing class sizes, and recruiting and retaining teachers. Funds are subject to annual audits.”

Gurewitz ultimately made the motion with a few tweaks to the language but wouldn’t add the word “small” before business and wouldn’t add 4.25 percent to the income taxes.

Cordes and Houskamp voted no, while Gurewitz and Cummings voted yes.

West Michigan Policy Forum CEO Jase Bolger, Michigan Manufacturing Association Executive Vice President of Government Affairs Mike Johnston, and Fisher all commended the board Republicans for failing to move the presented 100-word summary forward.

“Manufacturers across the state will be negatively impacted as this new tax will impose one of the highest tax rates on small businesses in the nation and the vast majority of manufacturers are small businesses,” Johnston said.

Bolger, a former state Speaker of the House, said there was no guarantee the funding would ever reach the classroom and pointed to the promises made by the Lottery, which he said get diverted to higher education, community colleges and teacher pensions.

“Our state’s taxpayers deserve honesty. Michigan already has a tax structure where the more you make, the more you pay, and schools have already seen an historic $7 billion annual increase in revenue since 2018. Voters must not be misled into thinking this proposal ensures better outcomes for kids or classrooms,” Bolger said.

Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter

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