Plan stands to benefit 8th District residents through Working Families Tax Credit, retirement tax elimination, investments in housing and community development
LANSING, Mich. (March 1, 2023) — Last night, Sen. Mallory McMorrow (D-Royal Oak) and the Michigan Senate finalized the Lowering MI Costs Plan, House Bill 4001, to deliver the biggest tax relief initiative Michigan has seen in decades. The bill will soon head to Gov. Gretchen Whitmer for her signature into law.
“From our kids to our seniors and everyone in between, this plan will have a major impact on our state,” said Sen. McMorrow. “This historic legislation tackles longstanding Democratic policies to provide significant support to our fellow Michiganders who need it the most. Lowering MI Costs also makes key investments in housing, parks, community spaces and other pieces of a holistic, reenvisioned approach to economic development.”
A key component of the bill will expand the Working Families Tax Credit to 30% of the federal Earned Income Tax Credit. 700,000 Michiganders—those who have the hardest time affording the basics—will see an average of $3,150 dollars back in their pockets starting this year. The credit has the support of a coalition of 230 business groups, economic development organizations, health care and hospitality entities, faith organizations and more, including Oakland University, the Detroit Regional Chamber of Commerce, the United Way for Southeastern Michigan, and the Oakland Livingston Human Service Agency.
“Michigan families should be able to work and raise their families without having to worry about whether or not they will be able to make ends meet,” Sen. McMorrow said. “It’s our responsibility as leaders to address those needs and alleviate that stress, and we took a big step forward on that yesterday. The Working Families Tax Credit is a proven, effective policy that will provide much-needed financial relief to the Michiganders who need it the most, benefiting our communities and local economies in the process.”
Data compiled by the Michigan League for Public Policy shows that 20,307 households in Senate District 8 received the EITC in 2019. With the Working Families Tax Credit, local recipients will receive around $658 more, benefiting 26,330 kids and raising 1,009 families out of poverty.
Lowering MI Costs phases out the retirement tax over four years and ultimately puts an average of $1,000 back in the pockets of 500,000 households. The plan equalizes the exemption on both public and private retirement income. According to 2019 U.S. Census Bureau data, in Oakland County, a total of 139,404 households receive retirement income averaging $27,865 annually, and 184,844 Wayne County households received an average of $23,897 in retirement income per year.
The Lowering MI Costs Plan also invests $50 million of surplus tax revenue in the state’s Housing and Community Development fund, which prioritizes projects offering veterans, seniors, people with disabilities, and working families safe, affordable places to call home. This is significant, sustainable and ongoing dedicated funding to affordable housing. The plan also provides $50 million for Revitalization and Placemaking (RAP) grants to turn underutilized office, commercial, or community space into places for people to enjoy, including affordable housing, parks, outdoor dining spaces, community gathering places, and more.
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