What will Michigan do with $971 million budget surplus?

Income tax cut idea gains traction as Michigan sees bigger budget surplus than expected

By Mara MacDonald - Reporter

DETROIT - The cash rolling into the state of Michigan from taxes is more than anticipated, as in a lot more -- some $971 million.

The question is what to do with it.

One of the biggest ideas getting traction is a tax cut moving Michigan's personal income down from 4.25 percent to 3.9 percent.

"My top priority would be a tax cut and preferably an income tax," said state Rep. Pete Lund (R-Shelby Township).

However, Lund says while that's a possibility there are other directions to move that money.

"While we ran a surplus, we still have long-term debt that we need to get rid of and that's something we really need to address here," he said.

As that gets debated, what we first reported in December now is gaining steam -- state money to help backfill Detroit's underfunded pensions, whether it comes in the form money to the Detroit Institute of Arts or directly to the pension funds.

"I think there is a drum beat that's getting steadily louder," said political strategist Dennis Darnoi.

Lansing sources tell Local 4 the governor is set to announce his plans shortly and that we should be expecting a plan isn't just Detroit-centric and the money that would end up in Detroit is between $100-$175 million.

"I think you're going to see action in a relatively short time frame. Again, there are a lot of pieces of the puzzle that need to be put together," said Darnoi.

Where does it come from? Not from the surplus and not from a yearly appropriation, which leaves a state-floated bond as a possibility. How to get that through the legislature in an election year will be no easy feat.

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