Michigan is expected to have a big budget surplus, and Gov. Gretchen Whitmer wants to give some of the money back to residents.
Whitmer announced a plan on Thursday, May 19, called “MI Tax Rebate Right Now,” which proposes to give working families $500. Whitmer sent a letter to legislative leaders, urging them to work with her on this plan.
Neither the news release nor the governor’s letter specifies who would be eligible for the $500, or how much the plan would cost. When asked who might be eligible for this money, officials from the governor’s office said it’s up for negotiation.
If all 10 million Michiganders received $500, the plan would cost $5 billion. If all 4.6 million employed Michiganders got $500, it would cost $2.3 billion.
“From Macomb to Marquette, Michiganders are facing rising prices on food, gas, and other everyday expenses,” Whitmer said in the release. “While the causes are varied, from the invasion of Ukraine by Russia to ongoing supply chain challenges caused by the pandemic, the pain being felt by people is tangible.”
U.S. inflation is at 8.3% for the past 12 months, according to the Consumer Price Index. The crux of the problem is a lack of supply – mostly due to the pandemic – and a surge in demand, as people have more money to spend because of rising wages, stimulus dollars and pent-up pandemic savings.
Michigan’s budget surplus is estimated at $2.8 billion for this fiscal year and $1.1 billion for next fiscal year, per the Senate Fiscal Agency.
Whitmer has proposed a flurry of other tax cuts, previously. She wants to roll back the retirement tax and triple the Earned Income Tax Credit for low-income workers.
Republicans have argued for Michigan to pause its gas tax and lower its income tax for individuals and businesses – but Whitmer has stood against those ideas.