I recently voted for legislation to preserve the personal exemption on the state income tax and provide additional tax relief for Michigan families. Under Senate Bill 748, the state personal exemption would increase an additional $700 to $5,000 by 2021.
This $200 million tax relief plan is a well-earned break for Michigan residents, who have worked hard to help improve our state and create jobs. As our state becomes more efficient and our economy continues to grow, taxpayers deserve to be able to keep more of their money.
The federal Tax Cuts and Jobs Act signed in December streamlines the exemption process and effectively ends the federal personal exemption. Since the state personal exemption is based on the federal return, without a revision to state law, Michigan taxpayers would no longer be able to claim personal exemptions on their state taxes and could face a state tax hike.
I co-sponsored SB 748 to stop an unnecessary tax hike on Michigan taxpayers and to provide them responsible and affordable tax relief. During Senate consideration of the bill, I also voted for an amendment to repeal the 2011 pension tax. Although it was not adopted in a close vote, I will continue efforts to repeal the pension tax in support of our seniors in their retirement.
SB 748 included an amendment that will reimburse the School Aid Fund for revenue loss.
Maintaining a high level of funding for our schools is an important part of this legislation as we continue to strengthen the education of our children, who are the next generation of Michigan workers.