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Whitmer Vetoes Bipartisan COVID-Related Tax Relief Bills

July 14, 2020

Five bills that would’ve provided various forms of tax relief to people and businesses — all of which received bipartisan support in both chambers — were vetoed by Gov. Gretchen WhitmerWednesday.

HB 5761 would’ve extended the deadline for 2020 summer tax assessments, and HB 5810 would have provided borrowing tools for local governments to make up those deferments. 

HB 5761 passed the House 108-0 after the Senate passed it 33-4.   HB 5810 passed the House 107-1 after the Senate approved it 33-4.

The Governor also vetoed SB 0935, SB 0936 and SB 0937, which would have allowed qualified taxpayers affected by the COVID-19 shutdown to defer some tax payments by remitting them in installments.

The trio of bills passed the Senate with anywhere from 32 to 34 yes votes and the House with anywhere from 98 to 101 yes votes.

On HB 5761 and HB 5810, Whitmer wrote in her veto letter that the consensus she heard from local governments, schools and county and local treasurers was that the bills would “create more problems than they solve.”

The idea of both bills, sponsored by Rep. Jim Lower (R-Cedar Lake), was to give families and taxpayers more time to pay their taxes – particularly after COVID-19 slowed the economy to a halt — and at the same making up that deferred revenue for the locals.

Yet Whitmer said the bills would have it so that counties would have to arrange for financing, or rely on the state for short-term, interest-free financing, which she said “blatantly violates” the state constitution because it prohibits making the state the guarantor of county liabilities “without receiving anything of value in return.”

The Governor also said that without state backing, requiring counties to advance money to cities and towns to make up for deferred revenue would violate the Headlee amendments. She also raised concerns about “piling hundreds of millions in uncollected taxes onto county budgets” which she said would leave “counties with unfunded liabilities and potential layoffs.”

In a statement responding to the vetoes, Lower noted the “unanimous bipartisan support” in the House and the “overwhelming bipartisan support in the Senate” and said the Governor’s “rejection of this plan is another troubling sign that she is going it alone and refuses to work with the Legislature, even on legislation that had support from nearly every member.”

Lower continued: “The governor shut down businesses, caused many people to be laid off, and still has not fixed her broken unemployment system – but she won’t help those struggling to pay their property taxes. It doesn’t make sense, especially as she’s threatening to shut down our economy again.”

The Grand Rapids Chamber called Whitmer’s veto “extremely disappointing,” as the legislative tax extension was seen as “an essential bridge into 2021 for the hardest-hit businesses” and that businesses now “will not be afforded time to get their feet back under them before being asked to pay, what is for many businesses, their largest annual bill.”

Yet the Tri-County Alliance for Public Education said the “K-12 schools are already facing a budget crisis and these bills would have only made that worse.”

On SB 0935, SB 0936 and SB 0937, Whitmer said the bills were a “commendable effort to provide relief to the people and businesses of Michigan during an unprecedented time of crisis,” yet she said that “allowing for broad deferment of tax remittances would push many local budgets over the precipice into fiscal crisis.”

SB 0935, sponsored by Sen. Kevin Daley (R-Lum), pertained to taxpayers who have filed quarterly returns due August 2020.  SB 0936, sponsored by Sen. Jim Runestad (R-White Lake), pertained to taxpayers who have filed monthly returns due August 2020.

And SB 0937, sponsored by Sen. Curt VanderWall (R-Ludington), applied to those required to withhold income taxes and who filed a monthly return due August 2020, involving partnerships in S corporations, or limited liability companies.

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