(The Center Square) – After a projected tax surplus through fiscal year 2026, Gov. Gretchen Whitmer says she doesn’t expect “sweeping” tax changes, to Republicans’ chagrin.
“I don’t see any big, sweeping changes,” Whitmer told reporters earlier this week in celebration in response to a proposal pitched last week by Rep. Sarah Lightner, a Springport Republican who said lawmakers should return money to Michiganders to compensate for inflation.
Michigan’s budget experts estimate a $13.2 billion balance in the General Fund for fiscal year 2025 and a $18.2 billion balance in the School Aid Fund. The estimate shows a $14.7 billion balance in the General Fund and $18.7 billion in the School Aid Fund for fiscal year 2026.
Rep. Donni Steele, R-Orion Township, who sits on the House Appropriations Committee, told The Center Square that Michigan needs to help residents “with rising grocery and energy costs.”
“Folks are cutting everything possible from their budgets to make ends meet,” Steele told The Center Square in an email. “Yet in a time of higher-than-expected revenue, the governor says tax cuts aren’t on the table. As families are making their wages stretch, the state should be able to give back some of the $1 billion surplus to the taxpayers that earned that money.”
Democrats hold the Senate and the governor’s seat but the House is deadlocked 54-54 until a special session fills two seats recently vacated by mayoral wins.
House Democrats hold the speaker’s gavel but can’t pass bills without at least one Republican vote.
In 2023, Whitmer signed into law a $1 billion tax plan that quintupled the earned income tax credit and rolled back the retirement tax. The policy changes aim to stop population loss.
Whitmer said on social media: “Our work to lower costs isn’t just about dollars and cents. It’s about peace of mind.”
“It’s about parents not having to choose between filling their gas tank or their grocery cart. Seniors enjoying their retirement. Young people knowing their dreams are within reach.”