pensions

Politics
1:14 pm
Fri December 2, 2011

Michigan retirees call for repeal of new retirement income tax

LANSING, Mich. (AP) - Organizations representing retiree groups say they want the Michigan Legislature to repeal an unpopular tax on pensions, or lawmakers will pay the political price in the 2012 election.

The AARP and groups representing public employee retirees called for a repeal Friday before the new tax plan takes effect in January.

The groups say they haven't ruled out filing suit in federal court to try and block the changes, but they are focused on getting lawmakers to take action.

Politics
6:23 am
Mon November 21, 2011

Governor, Legislature need to find $60 million to balance budget

When the Legislature returns to the state Capitol next week, there will be another item added to its to-do list. That is: coming up with millions of dollars to fill a budget gap created by the state Supreme Court decision on Michigan’s new pension tax. The court upheld the tax on pensions, but said denying a tax break to some higher-earners effectively created a graduated income tax.

A graduated income tax is not allowed under the state constitution. That part of the decision also blew a $60 million hole in the state budget. Sixty million dollars is a small part of a general fund budget that exceeds $8 billion.

But it is an amount the governor and the Legislature will need to make up to meet their obligation under the state constitution to have a balanced budget. One possibility would be to use a projected surplus from last year’s budget to fill the gap. That number becomes official in January. But it appears the surplus will be somewhere near $400 million.

Lawmakers are already fighting over what to do with that money. Democrats say it should be used to restore some budget cuts to schools. Republicans say it should go into the state’s “rainy day” savings fund, or to pay down debt.

Politics
4:21 pm
Fri November 18, 2011

Michigan Supreme Court approves public pension tax

The Michigan Supreme Court says a new law taxing public pensions does not violate the state Constitution. 

The advisory opinion released today is a major victory for Governor Rick Snyder, who signed the sweeping tax changes earlier this year. Employee unions were opposed to the new law.

State officials expect the law will generate as much as $330 million dollars in revenue in 2013.

The court did say a portion of the law doesn't pass muster. The court ruled the tax could not be administered as a graduated income tax, which is illegal under the state constitution. And that means Governor Rick Snyder will have to go back and find more revenue or more cuts to make sure the state budget remains balanced.

However, the Supreme Court says that does not stop the rest of the tax overhaul from taking effect.

The court divided along party lines, with the four Republican justices making up the majority.  

The decision means the new tax on pensions will take effect January first largely as it was designed by Governor Rick Snyder and the Legislature. However, they will have to come up with a plan to make up some of the money they were counting on to balance the budget.

Politics
10:27 am
Thu September 8, 2011

The Michigan Supreme Court and the Pension Tax

The Michigan Supreme Court will soon issue an opinion on whether the new law taxing pensions is constitutional.

If they say it is, it’s full speed ahead for the governor’s plan. If they decided that taxing pensions is not constitutional, it’ll knock a huge hole in the budget. That means the state will have to get more revenue -- which means raising taxes.

That, or roll back the business tax cuts or slash aid to education and other programs more severely than ever.

And while I don’t pretend to know exactly what would happen, I can tell you this, after talking to the governor last week. He isn’t about to roll back the tax cuts, and he doesn’t want to raise taxes.

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Politics
7:47 am
Wed September 7, 2011

Mich. Supreme Court to hear pension tax arguments

State Supreme Court building, Lansing, Michigan
Subterranean Wikipedia Commons

Scores of seniors upset the state will tax some of their public pensions for the first time are expected to pack the courtroom when the Michigan Supreme Court hears oral arguments on the law.

The hearing begins Wednesday morning in the Hall of Justice.

The case is a major test of sweeping tax changes put in place earlier this year by Republican Gov. Rick Snyder.

He wants a Supreme Court advisory opinion that would effectively pre-empt any court challenge on the law filed by opponents such as public employee unions, who say the state constitution protects their pensions from being taxed.

Starting Jan. 1, pensions and some retirement income that previously was partially exempt would be taxed as regular income for those born after 1945.

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Politics
11:43 am
Fri September 2, 2011

Fairness of pension tax will be decided by Michigan Supreme Court

The Michigan Hall of Justice - where the Michigan Supreme Court sits. Justices will decide on the fairness of the new tax on pensions.
user subterranean wikimedia commons

The Michigan Supreme Court has agreed to let unions and business groups weigh in before the justices rule on whether the state’s new tax on pension income is legal.

The court will hear arguments in the case next week.

Governor Rick Snyder asked the court to cut short any legal challenges with a preemptive ruling.

The governor wants an opinion from the court before the end of the month.

His budget relies on $343 million dollars from taxing pensions, and he wants to avoid months or years of legal wrangling on the question.

The governor asked the court to decide whether the pension tax breaks a promise by the state to retirees and public employees; and whether income limits in the law amount to a graduated income tax – which is prohibited by the state constitution.

The Supreme Court has agreed to accept briefs from retiree associations and unions that oppose the pension tax, as well as business groups that say the tax is fair.

The Michigan Education Association, the UAW, and the AARP are among the groups that filed briefs opposing the tax. They say the pension tax breaks a promise to retirees and public employees, and it violates the state constitution.

Business groups, including the Michigan Bankers Association, and the Small Business Association of Michigan, are backing Governor Rick Snyder. They say the pension tax is fair because it treats all income equally in the tax code.

If the pension tax is upheld, pension income will be subject to the state income tax starting January 1, 2012.

Politics
8:30 am
Thu June 16, 2011

Michigan Supreme Court agrees to decide pension tax question

The Michigan Supreme Court has agreed to take up the question of taxing pensions.
Michigan Supreme Court

The state Supreme Court has agreed to Governor Rick Snyder’s request to make an early ruling on whether the new income tax on pensions violates the Michigan Constitution.

Governor Snyder made the request to avoid what potentially could be years of litigation.

The governor is trying to preempt an expected lawsuit from state employee unions. They say the tax on pensions will illegally reduce their agreed-to compensation under collective bargaining agreements.

The Michigan Constitution says the state may not “diminish” nor “impair” the financial benefits of pension plans.

The governor wants the question settled before the pension tax takes effect next year. The law extends the state income tax for the first time to pensions of people born after 1945.

The Supreme Court ordered oral arguments to be held in the case in September. The court has a Republican majority.

Politics
5:17 pm
Thu April 28, 2011

Governor Snyder's tax overhaul plan passes the House

Governor Snyder's tax plan has passed the State House.
Lester Graham Michigan Radio

Update 5:14 p.m.

Governor Rick Snyder’s tax overhaul plan began working its way through the Legislature today as it cleared the state House by a mostly party-line vote.

The Republican tax reform bill would replace the complex and unpopular Michigan Business Tax with a corporate profits tax.

Two-thirds of Michigan businesses would not have to pay the tax.

Part of the revenue lost to the state would be made up by eliminating dozens of tax breaks.

Many of them go to businesses and charities. Also gone would be earned income credit for working poor families and the income tax exemption for most seniors on pensions.

“This is a turnaround moment for Michigan,” said Republican House Speaker Jase Bolger. “Today’s winners are our local small business owners. Today’s winners are the unemployed because now those small business owners can create jobs.”

Democrats say it’s not fair to make working families and seniors make up the difference while most businesses pay less. Democratic state Representative Barb Byrum says it's not a fair trade.

“This legislation is not a shared sacrifice and should not be adopted. Today is just another day another day to give an 82% tax break to wealthy, corporate special interests. Another day to take from our children, our seniors, and our working poor."

The measure now goes to the Republican-controlled state Senate.

3:41 p.m.

Governor Rick Snyder’s tax overhaul plan has begun its march through the Legislature.

It won the approval of the state House by a mostly party-line vote.

The measure would scrap the complicated and unpopular Michigan Business Tax.

It would be replaced by a corporate income tax that would not be paid by two-thirds of the state’s businesses.

Part of that lost revenue would be made up by ending many tax breaks for businesses, working poor families, and seniors on pensions.

Politics
3:42 pm
Tue April 12, 2011

Govenor Snyder and Republican leadership getting closer on budget deal

Republican leaders in the state legislature are getting closer to a deal on the budget.
Lester Graham Michigan Radio

Governor Rick Snyder and Republican leadership in the State House and Senate appear to be close to a deal on the budget.

From the Associated Press:

Gov. Rick Snyder and Republican state lawmakers are reporting "significant progress" on proposals related to business and pension taxes for the fiscal year starting in October...

Two people with knowledge of the talks tell The Associated Press that the proposals include many elements of Snyder's original business tax plan. They spoke on the condition of anonymity because the deal hasn't been finalized.

The Republican governor wants to replace the state's main business tax with a 6 percent corporate tax applied to corporations with shareholders.

The plan would include taxes on pensions and other retiree income but it would be modified from Snyder's original proposal. The new proposal calls for phasing in or scaling back the tax.

Some lawmakers have been loathe to accept any taxes on pensions, but it appears a plan to phase in a pension tax may be more palatable.

Peter Luke of Booth Newspapers reports on some of the details of the agreement:

Under the phased-in alternative, the status quo would apply to those 67 and up, whose pensions would continue to be tax exempt.

A middle group of retirees 60 to 66 would be subject to a pension tax, but the first $20,000 of pension income for single filers -  $40,000 for joint filers - would be tax exempt.

Those younger than 60 would pay tax on all their pension income.

An AARP spokesman said they remain opposed to a tax on pensions, whether its phased in or not.

A public announcement of the agreement is expected to come this afternoon.

Detroit
2:48 pm
Tue April 12, 2011

Locked out of Mayor Bing's budget presentation

Some people got locked out of today's Detroit City Council meeting, where Detroit Mayor Dave Bing was laying out a 5-year budget plan that called for cutting employee pension and health care costs.

Council security told citizens and several reporters that they couldn't come in because the hearing room was "filled to capacity."

That escalated into a dispute between security guards and the people who demanded their right to enter under the state's Open Meetings Act.

Detroit resident and volunteer organizer Felicia Sanders wanted to hear Bing's presentation.

"If you get up and you're willing to attend a meeting to fight and speak out for your city, you should be allowed to participate in the meeting."

Sanders and others questioned why the City Council didn't hold the hearing in a much larger public auditorium just across the hall.

Politics
4:06 pm
Mon April 4, 2011

Governor Snyder confident his budget & tax plans will get legislative approval

Governor Rick Snyder, (R) Michigan

A state House committee is debating a tax-reform package that includes eliminating the state’s business tax and replacing its revenues with a corporate income tax and taxing pensions. Governor Snyder says he wants a state budget in place by the end of May.

However, fierce divisions over how and where to reform taxes – especially over whether to tax pensions – are slowing negotiations.

Snyder’s pleased with the progress on the budget so far:

“Things are going reasonably well in terms of that process.   And we’re working on a very fast time frame.  We’re well ahead of the way things traditional done in past years.  And we’ll still on a path to get fundamental reform done."  

Snyder says he's not put off by the harsh criticism that his budget and tax plans have generated: 

“That’s part of the legislative process.  That’s part of democracy.   But as a whole, I believe the framework we put out there will go ahead and if anything I hope it could be an improved product with the good dialogue we’re having today.”  

Some Senate Republicans have said they will not vote for any pension tax. And many Democrats are upset, claiming they have been locked out of negotiations altogether.

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Politics
5:31 pm
Thu March 31, 2011

Snyder and Republican leaders point to progress and sticking points

Republican Governor Rick Snyder and the Republican leadership in the State House and Senate outlined progress and sticking points.
Lester Graham Michigan Radio

Governor Snyder, House Speaker Jase Bolger and Senate Majority Leader Randy Richardville say they have worked well together to approve many measures so far this year – including the expansion of power for emergency financial managers.

But one area they do not seem to agree on is how and where to reform taxes.

Richardville said "we actually have been disagreeing quite a bit," but he says those disagreements are fine because they are still listening to each other.

"It’s not about disagreement, it’s about passion. Everybody that got elected ran as hard as they could to get here, and is passionate about getting here," said Richardville, "but we have respect for the other passions in the room, so we’re going to get there."

Disagreement over taxing pensions

One area where they disagree is Governor Snyder’s proposal to tax pensions.

Snyder says he stands by his plan, even after receiving a cool reception from many Republican legislators:

"For higher income people, for people who have the wherewithal to say they’re also contributing to our system – I think that’s a fair answer. Because that’s the part of it that is, people shouldn’t just look at what they’re asked to give up, but when you look at where they’re ending up. Are they being treated fairly in respect to the other citizens in our state?”

Governor Snyder often stresses that low-income people on pensions would not be subject to painful tax increases.

Some Republicans state senators say there is no pension tax they would agree to, even one that only focuses on the very wealthy.

Democrats feel left out

Democratic lawmakers say they have been left out of negotiations so far.

Democratic state Senator Bert Johnson says many of the Republican proposals are the reason why thousands of angry people have protested at the Capitol in recent weeks.

"I think we would do well – all of us here in this Legislature – to realize what it being said out on the front steps of the Capitol, what is being said out on the lawns of the Capitol. I think these are not crazy people – these are people who have elected all of us. These are people who go out, and they vote, and they vote in numbers and they’re carrying their concerns to the Capitol."

Johnson says Democratic lawmakers have been ignored in much of the work that has been done so far. He says Snyder will soon find that he needs Democratic votes as he tries to approve parts of his tax plan that are unpopular with Republicans.

Politics
4:02 pm
Fri March 18, 2011

State Budget Director says he hears complaints about pension tax plan

A protester holds a sign outside the state capitol during a March 15th demonstration against the governor's pension tax plan
(photo by Laura Weber/MPRN)

The state’s budget director says Governor Rick Snyder’s proposal to tax pensions is necessary to keep young people in the state.   Budget Director John Nixon says the proposed tax will move Michigan into a sustainable future economy. 

“We’re the only state in the country to lose population in the last decade. And when you look at Michigan’s growth projections going forward, by 2030, 20 percent of our population’s going to be retired. And what that means long term for the state is you’re going to be pushing more of the burden on your working segment of the population.”

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Budget Protests
12:08 pm
Wed March 16, 2011

Snyder stands firm against protests

Michigan Governor Rick Snyder (R)
(courtesy of the Michigan governor's office)

Governor Rick Snyder says he respects the views of people protesting against his budget proposals. Many people have crowded the Capitol lawn this week to stand against Snyder’s plan to tax pensions. The governor says he understands their frustration, but he says a tax on pensions – done the right way – is only fair.

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Budget Protests
1:41 pm
Tue March 15, 2011

Protests heat up for the week at state Capitol

About a thousand protesters gathered on the state Capitol lawn today and they say there will be more people joining them throughout the week.

They are protesting many budget proposals from Governor Rick Snyder and in the Legislature, including a plan to tax pensions.

Hundreds of people from AARP chanted loudly in opposition to Governor Snyder’s proposal to tax pensions to help end the budget deficit.

Many people held signs that read: “Recall Governor Snyder,” and “Recall The Nerd.”

Jeanette Stang held a sign that read “One-Term Nerd.”

Stang says her husband worked in an auto plant for 37 years, and now they have trouble making ends meet with increasing medical expenses and living off of their pension. Their Flint home is up for sale, and both of their adult sons have already moved out of state:

"Our sons both would not come to Michigan. They said Michigan has gone to pieces...Michigan used to be a beautiful state, and Michigan has really gone downhill…All he wants to do is keep taxing the little guy—tax these bigwigs that have their yachts and have their trips and everything else. Let the people who earned this money and worked hard all their life have their pensions and quick taxing us to death."

Snyder says seniors use government services just like all other taxpayers, and should be taxed on their pension income accordingly.

More protests coming

Labor movement protests at the state Capitol are expected to get bigger and louder as the week goes on and the Legislature votes on controversial issues.

The House is expected to give final approval to a package of bills that would give emergency financial managers more control over struggling communities and school districts, and strip control from local unions.

Budget Protests
1:09 pm
Tue March 15, 2011

Seniors rally in Lansing against pension tax

Retired Battle Creek school teacher Connie Cole Burland waves a sign at a state Capitol rally to oppose Gov. Rick Snyder’s plan to tax pensions.
Rick Pluta Michigan Public Radio Network

Hundreds of senior citizens gathered in front of the state Capitol today to protest Governor Rick Snyder’s proposal to tax pensions.

Michigan is one of four states that does not collect an income on pensions. Snyder’s proposal would change that.

Connie Cole Burland, a retired Battle Creek school teacher, says it’s not fair to ask her to pay more if Snyder follows through on his plan to cut taxes for most businesses.

 "We gave them 40-plus years of service. We had a deal when we retired, and this is tax hike. You can call it whatever you want, but this is a tax hike. We had a deal."

Governor Snyder says it’s reasonable to ask retirees with good pensions to pay the income tax when younger people with smaller incomes have to pay it.

He says it is part of the “shared sacrifice” necessary to fix Michigan’s budget troubles.

Some Republican lawmakers are looking for an alternative to taxing pensions.

Budget Protests
6:41 am
Tue March 15, 2011

Seniors plan to protest at state Capitol

AARP Michigan is planning a rally at the state Capitol Tuesday morning
User goIfmuth Flickr

Protests are scheduled to continue at the state Capitol today. Older people are expected in Lansing today to oppose Governor Rick Snyder's plan to tax pensions. The Associated Press reports:

AARP Michigan is one of the main sponsors of a protest scheduled to begin late Tuesday morning. The group opposes Rick Snyder's plan to eliminate an income tax exemption for pensions.

The Michigan League for Human Services also is involved in the protest. The league opposes a plan to eliminate the state's earned income tax credit for low-wage workers.

The groups say Snyder wants to provide a tax cut for businesses at the expense of seniors, low-income workers and children.

Snyder and his supporters say the proposals would give Michigan a simpler and fairer tax structure that would help provide solid financial footing for the state's future.

The Detroit Free Press reports:

AARP Michigan has arranged to transport nine busloads totaling 400 seniors to today's "It's Not Fair" rally, where Snyder's proposed tax on pensions will be the target."If (attendance is) over 1,000, we won't be surprised," said AARP Michigan spokesman Mark Hornbeck.

Politics
6:04 pm
Mon March 14, 2011

Snyder stands by budget plans in face of protests

Teachers protest in Lansing on February 26th, 2011.
mea.org

Senior citizens and union members are expected to rally tomorrow at the state Capitol to protest Governor Rick Snyder’s budget plans.

Seniors are taking aim at the governor’s proposal to start levying the income tax on pensions.

Michigan is one of four states that does not tax pensions.

Seniors say it’s not fair to tax pensions at the same time Snyder wants to reduce taxes overall on businesses.

But the governor says seniors who use state services and can afford to pay should share the tax burden:

"Because our population is continuing to age and we want a simple, fair tax system.

The idea here is lower-income people, whether you’re a senior or not, hopefully you’re not going to pay any income tax and we’ve structured the system to do that.

For people with higher incomes, we want something that’s simple, fair, and efficient," says Snyder.

The governor says he is open to compromise on details of his budget, but overall he stands by his plan. 

Governor Snyder has also called for cuts to public schools, local governments and state employee compensation.

State employee unions say budget plans that require them to take cuts while Governor Snyder’s department directors earn as much as $250,000 a year are not fair (that's how much Snyder's Budget Director, John Nixon, makes).

Stephen Reck is with SEIU Local 517M – a union that represents state workers:

"Now, I’m not saying the new director isn’t worth $250,000.

If you’re going to attract and retain good people, you’ve got to pay them a fair wage, and that goes for state employees whether an engineer, a scientist, a clerical worker, or a budget director, but be consistent and that’s all we’re asking."

In addition to the seniors and unions expected to protest tomorrow, another rally is planned for Wednesday by a group calling itself  "Working Michigan."

Budget Protests
4:21 pm
Mon March 14, 2011

Protests to continue in Lansing tomorrow

User P.E.C. Flickr

More protests are planned to take place at the state Capitol tomorrow. From the Daily Tribune:

Opponents of the proposed tax on pensions plan to rally at the state Capitol from 9 a.m to 1 p.m. Tuesday, March 15, with speakers between 11 a.m. and 1 p.m.

"We don't think it's fair the governor increases tax on seniors and the poor while giving breaks to business and cutting services," said Mark Horbeck, of AARP Michigan, a sponsor of the rally. "Seniors and the working poor are going to be asked to pay more taxes. What do they get in return? Less services and a business tax cut."

Other groups expected to attend include the Michigan League for Human Services and the state employee retirement association, as well as lawmakers from both parties, said Horbeck, though he declined to name the lawmakers.

AARP is one of the sponsors of the rally, but the rally was really the brainchild of Mary Lee Woodward of Oxford, a General Motors retiree who launched a Facebook page to protest the proposed tax.

She says she launched the Facebook page as soon as the governor made his budget proposal to the Legislature last month. Other efforts include passing out fliers of the upcoming rally.

Taxing her pension, Woodward says, could force her to choose between her home and her car.

State Sen. John Pappageorge  R-Troy, sits on both the Senate Finance Committee and the Senate Appropriations Committee, which will deal with both Snyder's tax proposals and spending plans.

He says it's too early to tell whether taxing pensions is an idea that will eventually pass the Legislature.

"There's not sufficient support yet because we haven't had a chance to dig into it yet and see if we like it as is or if we can improve on it," Pappageorge said. "The point is it's just a little too early. You can't just look at pensions, you have to look at the whole picture and see if we're doing this as fairly as possible."

The protest comes just days after the legislature added a $100 expenditure item to the governor's tax code bill, thereby making it impossible for Michigan voters to repeal.

The state Supreme Court ruled in 2001 that legislation that included expenditures was immune to repeal by voters.

Politics
11:21 am
Mon March 7, 2011

AARP organizing rally to oppose tax on pensions

AARP is organizing a rally to be held in Lansing
nasaimages

Organizers for AARP Michigan say their rally will be held on the east steps of the State Capitol Building on March 15th from 11 a.m. to 1p.m..

From the AARP Michigan blog:

The rally was the brainchild of AARP member and retiree Mary Lee Woodward of Oxford, who launched the effort on Facebook with the help of her daughter.  Woodward says she's heard from thousands of seniors who say new taxes on their pensions and other income will make it difficult to pay their bills. Many also object to elimination of a tax credit for low-income working families, and proposed cuts to schools, universities and local police and fire protection and road maintenance.

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