Michigan Senate Bill SB0874

Michigan 2023-2024 Regular Session

• Introduced: 5/16/24
• Refer: 5/16/24

Caption

Individual income tax: revenue distributions; earmark for MiAble fund; provide for. Amends sec. 51 of 1967 PA 281 (MCL 206.51). TIE BAR WITH: SB 0873'24

Impact

The proposed amendments seek to ensure consistent revenue distribution that aligns with the state’s financial health and inflation trends. Under the bill, if general fund revenue increases above the inflation rate, adjustments may be made to the tax rates, potentially benefitting taxpayers through lower tax burdens. Moreover, the legislation acknowledges the critical balance between funding essential services and maintaining a viable tax rate, which could fundamentally affect not only state education funding but also the fiscal responsibilities towards agricultural initiatives as well as programs that support the broader community including special needs populations.

Summary

Senate Bill 0874 amends the Income Tax Act of 1967 in Michigan, primarily focusing on revenue distributions from income tax collections. The bill establishes specific guidelines for the allocation of tax revenues, particularly aiming to bolster the MiABLE fund, which supports individuals with disabilities. The legislation mandates that a significant portion of the collected income tax revenues be redirected towards this fund, thus encouraging financial independence and support for those beneficiaries. It further emphasizes the importance of maintaining steady contributions to essential state funds like the school aid fund, ensuring that financial resources are appropriately channeled for educational purposes.

Contention

Debates surrounding SB 0874 primarily focus on its implications for both funding adequacy and the intended benefits for individuals requiring support through the MiABLE fund. Critics argue that while the bill promotes beneficial social objectives, it also presents challenges in maintaining adequate funding levels for public education. There are concerns that earmarking significant portions of tax revenues could divert funds from other necessary but underfunded areas, leading to potential budget shortfalls. Proponents, however, assert that the structured approach to tax revenues fostered by this bill will ultimately ensure a more equitable and sustainable financial framework for the state.