Introduced
by
To allow Detroit to postpone for one year a one-tenth percent income tax cut scheduled for 2004, leaving the tax at 2.65 percent for residents and 1.325 percent for commuters. The Detroit tax cut is currently required by state statute, as part of a 1998 deal to continue to give the city $333.9 million in revenue sharing for 10 years, notwithstanding cuts to other local governments. The state cut all revenue sharing by 3.5 percent this year and Gov. Jennifer Granholm has proposed another three percent cut for next year. Postponing the Detroit tax cut would increase the cost to taxpayers by some $14 million, assuming that many do not leave the city altogether.
Referred to the Committee on Local Government and Urban Policy
Reported without amendment
With the recommendation that the substitute (H-2) be adopted and that the bill then pass.
Substitute offered
To replace the previous version of the bill with one which allows Detroit to raise its income tax from the current 2.5 percent to 2.6 percent for residents and 1.3 percent for commuters, then reduce it gradually to 2.0 percent and 1.0 percent, respectively, between 2005 and 2010. See House-passed bill for background and details.
The substitute passed by voice vote
Passed in the House 69 to 39 (details)
To allow Detroit to raise its income tax from the current 2.5 percent to 2.6 percent for residents and 1.3 percent for commuters, then reduce it gradually to 2.0 percent and 1.0 percent, respectively, between 2005 and 2010. Detroit is required by current state statute to cut its income tax rate, as part of a 1998 deal to continue to give the city $333.9 million in revenue sharing for 10 years, notwithstanding cuts to other local governments. The state cut all revenue sharing by 3.5 percent this year and Gov. Jennifer Granholm has proposed another three percent cut for next year. Postponing the Detroit tax cut would cost taxpayers some $74 million through 2010, assuming that many do not leave the city altogether.
Referred to the Committee on Finance
