Taxes, driver debt, prevailing wages atop legislative agenda

LANSING, Mich. (AP) — At the onset of 2018, Michigan lawmakers have a growing to-do list — led by talk of cutting taxes, wiping clean driver fee debt and improving mental health services.

Also top of mind, at least for Republicans, is repealing a law that mandates higher “prevailing” wages on state-financed construction projects. Democrats, meanwhile, want to boost spending on schools and infrastructure, address water-quality problems and hold hearings on Michigan State University’s handling of a sports doctor who sexually abused young female athletes.

The legislative session resumed this past week. Republican Gov. Rick Snyder will soon outline his agenda in his annual State of the State address and budget proposal.

A look at the issues legislators are prioritizing:

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TAXES

Snyder’s call to quickly keep intact Michigan’s personal tax exemption — which he says was inadvertently eliminated due to how the state tax code is linked to the federal code — has been embraced in the Capitol. The rub: Legislators want to go further this election year.

The stage is being set for another tax showdown between majority Republicans and Snyder, whose top aides say taxes have been cut enough under his watch. As one example, they point to how a road-funding deal that raised fuel taxes and vehicle registration fees will squeeze the general fund by shifting dollars to transportation, eventually expand a property tax credit and reduce the personal income taxes under certain conditions.

Snyder favors boosting the $4,000 exemption, which already is scheduled to rise to $4,300, to $4,500 to offset other impacts of the federal overhaul. GOP senators want a $4,800 exemption, though, possibly more. House Republicans will propose a tax cut plan soon.

House Minority Leader Sam Singh favors targeted tax relief for low-income earners, whose tax credit was reduced under Republicans’ 2011 tax rewrite.

“If we’re going to do anything, we need to rectify that wrong that was done,” he said.

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DRIVER FEES

Legislators overwhelmingly support forgiving some or all of the estimated $634 million in debt facing 348,000 drivers who owe outstanding state “responsibility fees” for certain traffic infractions, which have been criticized for disproportionately hurting low-income motorists who cannot afford to pay.

While Snyder has had some concerns about the budget impact, House Speaker Tom Leonard said $250 million that was unspent in the last fiscal year is more than enough to “give people their driver’s licenses back. The time for excuses is over. The governor is the one that is holding this one up, and we need to get it done.”

Snyder spokeswoman Anna Heaton said he is open to discussing debt forgiveness during the budget cycle.

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PREVAILING WAGE

Michigan has a 1965 law that requires workers on state-financed government construction projects to be paid local wage and benefit rates, which are based on union contracts. Nonunion contractors and conservatives want to repeal the measure, and have turned in hundreds of thousands of signatures for initiated legislation. If the state certifies that enough petitions are valid, GOP lawmakers could pass the veto-proof bill over Snyder’s objections.

Democrats and union leaders hope to lobby enough Republicans to let the legislation instead go a statewide vote in November.

“I want to save the taxpayers money. That’s what I want to do,” said Senate Majority Leader Arlan Meekhof, contending that the law makes public projects more expensive.

Senate Minority Leader Jim Ananich countered that there is a shortage of workers in the trades.

“It’s the wrong message to send as we’re saying we want more talent, but the way we’re going to do it is pay you less and make sure you have not enough training,” he said.

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MENTAL HEALTH

A House task force of Republicans and Democrats on Wednesday will issue findings from a review of ways to better help residents with mental health problems. The report will be used to draft bills related to mental health services, veterans, substance abuse treatment and law enforcement training. Leonard said the mental health system is “broken.”

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OTHER ITEMS

Democrats do not set the agenda but are pushing key issues before the November elections, which will determine if they gain power after years in the minority.

Singh, the House leader, said Democrats’ two biggest priorities are spending more on schools and infrastructure such as roads, and Republicans have not shown “bold leadership” to rectify funding gaps. Classroom sizes are too high, he said, and parents should have a guarantee that their child will be in a class with no more than a certain number of other students. Singh also suggested that lawmakers ask voters to approve a bond to fund road improvements.

Ananich said more can be done on water-related policies, and he called for the Senate to hold hearings on how Dr. Larry Nassar was able to sexually abuse gymnasts and others for “so long” without Michigan State University intervening.

Meekhof said Republicans are discussing possible responses to the scandal, but he did not commit to oversight hearings and said the university is autonomous. No decision has been made on whether MSU could lose some state funding, he said.