pensions

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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.

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."

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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.

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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Michigan legislators are planning to discuss alternatives to Governor Rick Snyder's budget proposals this week.

One hot button issue is Snyder's plan to place a tax on pensions. That tax is estimated to raise $900 million.

It would go a long way in eliminating the state's budget deficit which is estimated around $1.5 billion.

It's angered a lot of seniors, and lobbying groups, like the AARP, are putting pressure on legislators in Lansing to keep the tax exemption on pensions in place (the AARP plans to hold a rally in Lansing on March 15th).

Laura Weber, with the Michigan Public Radio Network reported that Michigan Senate Republicans are meeting early this week to try to come up with alternatives to the pension tax plan.

Weber spoke with Republican State Senator Tory Rocca who said his opposition to taxing pensions is simple:

"It’s a tax increase, and on top of that it’s a tax increase on senior citizens, and if you look at what their cost of living is and what their cost of living increases are, they tend to have a higher cost-of-living increase than other people because a lot of their cost-of-living is weighted toward health care, which does increase at a rate greater than the rate of inflation every year."

The Associated Press reports that State Senate Majority Leader Randy Richardville didn't say whether Snyder's pension tax plan had enough support to win approval.

But he did say that if legislators want to scrap the tax plan, they'll have to find money elsewhere. From the AP:

Richardville said that if the Senate opposes pieces of Snyder's proposal they will have to balance it out by cutting programs or finding revenues somewhere else within the budget.

That's $900 million more, which could mean more proposals out of Lansing for bigger cuts.

Flickr

When he presented his budget to the legislature, Governor Snyder explained part of the shared sacrifice would be taxing public and private pensions.  There is no state income tax on pensions right now.  The Governor noted, retirees still use government services.  He also said there are some retirees who are still working, paying the current 4.35% in state income taxes.  He said taxing pensions is a matter of fairness to people of retirement age who are still working.

Kalamazoo City Commission
Lindsey Smith / Michigan Radio

Kalamazoo has a new balanced budget in place…with no layoffs, tax increases or cuts to city services. City commissioners unanimously approved the 2011 budget plan Monday night.

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