Michigan Senate Bill SB0277

Michigan 2025-2026 Regular Session

• Introduced: 5/1/25
• Refer: 5/1/25

Caption

Sales tax: distribution; disposition of money into the game and fish protection account; provide for. Amends sec. 25 of 1933 PA 167 (MCL 205.75). TIE BAR WITH: SB 0276'25

Impact

One notable feature of SB 0277 is its impact on fiscal allocations for education and local governments. With 15% of the sales tax collections directed to municipal revenue-sharing under the Glenn Steil state revenue sharing act and 60% to the state school aid fund, the bill aims to ensure that local governments and schools receive a consistent flow of funds. This is particularly significant given the reliance of many local jurisdictions on this revenue for essential services and educational funding. Additionally, the bill mandates that a portion of collections from fuel sales will contribute to the comprehensive transportation fund, which is vital for maintaining the state's transportation infrastructure.

Summary

Senate Bill 0277 aims to amend the General Sales Tax Act of 1933 by altering the distribution mechanisms for the collections derived from the sales tax imposed on various items. The bill specifies that all money collected under the act should be deposited into the state treasury's general fund, with specific percentages allocated to cities, villages, townships, and the school aid fund. In addition, it establishes a framework for how revenues from gasoline sales will be distributed, emphasizing the need to support transportation infrastructure.

Contention

While the bill may lead to enhanced funding for schools and transportation, it also raises concerns regarding the reliance on sales tax as a stable revenue source. Critics argue that fluctuations in consumer spending can lead to unpredictable revenue streams, potentially jeopardizing the funds intended for schools and local governments. Opponents of the bill may advocate for a more diversified funding strategy that does not place such significant weight on sales tax collections, particularly in economic downturns when consumer spending is impacted.