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Karoub Report – January 2018

Posted by: Jennifer Gomori Posted date: January 22, 2018

By unanimous vote, the Republican-led Senate quickly passed an expanded personal income tax credit that is likely being eliminated due to a quirk in the new federal tax reform law. The Senate version (SB 748 S-1) preserves Michigan’s $4,000 personal exemption on its income tax, but increases it to $5,000 by 2021- a $200 increase over the $4,800 exemption level of the SB 748 version; In the state’s first gubernatorial override in 16 years, the House and Senate pushed into law an accelerated sales tax phase out on used car trade-ins that Governor Rick Snyder vetoed in July 2017; A report issued last week by a Special House Task Force found 42 areas where mental health services could be improved in the state; Charter schools would receive a share of “regional improvement” property taxes on a per-pupil basis that now go only to traditional schools if legislation (SB 574) approved by the House becomes law; Legislation (HB 5317) has been introduced that would require able-bodied Medicaid recipients to work, go through job training or perform community service in order to keep their benefits; and analysts for the House and Senate fiscal agencies are projecting continued slow and steady growth for Michigan economy through 2020. That means the state’s $10 billon General Fund isn’t likely to keep up with inflation over the next three years and the School Aid Fund, when adjusted for inflation, should remain smaller than it was 10 years ago. For more information on these and other legislative issues, please click below on the January 2018 Karoub Report.

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