Today, Governor Whitmer announced a vision to raise roughly $3 billion for Michigan roads.
The most notable source of revenue is a recommendation to raise business taxes by $1.6 billion. The specific mechanisms were not announced, but we expect the intent is to increase the Corporate Income Tax (CIT) 33%, from 6% to 8%, along with several other items said to be part of the discussion:
The other recommendations include:
- $500 million in government efficiencies or current revenue
- Higher fees on large trucks, digital advertising, delivery services, and more are rumored to be on the table as part of the mix
- $470 million from a wholesale Marijuana tax
Other details:
- The 6% sales tax on fuels would shift to roads with the funding for schools being backfilled through new/existing revenue
What’s the Chamber Position:
The Chamber has been supportive of a mix of prioritizing current revenues and user fee increases (gas tax, registration fees, etc.) to create sustainable funding for Michigan’s infrastructure. The CIT increase would put Michigan at a competitive disadvantage compared to competing states:
- Almost 90% of businesses that pay the CIT have less than 100 employees and they employ half of the state’s private sector workforce.
- Michigan’s CIT is already higher than half of the country and 16 states have cut their rates since 2018.
“While we support finding a sustainable source of revenue to fund Michigan Roads, but we have significant concerns with the burden being placed on Michigan business and the additional inflationary pressure it will have on costs,” said Joshua Lunger, Vice President of Government Affairs. “This is also occurring while businesses are facing extreme uncertainty and the Senate still has not moved legislation improving the Earned Sick Time Act and protecting tipped wages, which is our top priority.”
The Republican-controlled Michigan House and Democrat-controlled Michigan Senate will need to agree on any elements of the plan for it to go before the Governor.
House Speaker Matt Hall’s has already laid out a $3.1 billion plan that moves existing revenue from an economic development fund, stops legislative earmarks, eliminating business tax credits and more. The Senate has not announced a road funding strategy.
ESTA Action Heats Up in Lansing
What’s happening: The Michigan Senate is back in session this week, holding two key hearings on changes to the Earned Sick Time Act (ESTA) and Minimum Wage/Tip Credit.
The details:
- Tuesday: The Senate Committee on Regulatory Affairs continues its review of Senate Bill 15, which proposes changes to ESTA. Last week’s hearing raised concerns over leave notice requirements, small business exemptions, and PTO flexibility, but no resolution was reached. The Chamber will be in Lansing to emphasize how staffing shortages, no-call no-shows, PTO disruptions, and exemption concerns impact businesses.
- Wednesday: The Senate shifts focus to Minimum Wage and tip credit discussions.
The clock is ticking: With just 11 days until ESTA takes effect, the Senate must act quickly – passing its version, sending it to the House, and clearing procedural hurdles before a final vote. Stay tuned for updates – watch hearings live or past recordings here.
