Michigan’s State of the State

On Jan. 29, the governor gave her annual State of the State address. In characteristic fashion, she was very optimistic about the year ahead. I applaud her optimism. At the same time, we must be sober in our assessment of the challenges before us and what it will take to solve them.  Her call for cooperation and collaboration definitely has merit.

The governor touched on many of the problems we continue to face in Michigan. She has said she will not raise taxes or fees to balance the budget or to create new programs. I certainly support that decision. After hearing the proposals in her address, however, one must ask how spending will keep within tax revenues.

I am pleased the governor has embraced what Republicans have always known—it is important to reward companies that create jobs. The governor announced the Michigan “Job Creation Tax Credit” which appears similar to an initiative in law.  I authored the ME2, Michigan Entrepreneurial Exemption, in the new Michigan Business Tax (MBT).  The ME2 abates taxes for 3 years and does not create winners and losers by picking only the 50 fastest growing industries as the governor proposed.   Under the ME2, a business with gross receipts less than $25 million that creates 20 new jobs and invests $1.25 million is exempt from 100 percent of the taxpayer’ MBT liability.

I worked hard to place this exemption into law and am delighted to see the governor’s interest in expanding the ME2 credit in the Michigan Business Tax or using it as a model for a new program. I look forward to working with the governor.

The governor also proposed the Michigan Invests! Fund. The new account would invest 1 percent of the state’s pension fund—$300 million—in high-growth companies based in Michigan. I do have some concerns regarding public competition with the private sector.  Also, just think how we could jump start job creation and the economy if the money were used to lower business tax rates.

Education Week’s annual Quality Counts report, recently issued Michigan a “D” grade on student achievement.  Students who underachieve or fail are at risk of not graduating or dropping out early.  To address this, the governor has proposed spending $300 million for smaller schools and keeping students in school until the age of 18.  However, this proposal raises questions about achieving the most effective way to use this money to get results.

While it is our intention to work with the governor we need to address the root causes of failure. As a former educator with 19 years experience and a member of the Senate Education Committee, I know firsthand that simply making schools smaller and keeping students until the age of 18 will not solve the problem. In our increasingly diverse society, we need to take a fresh look at curriculum that will meet the needs of our students. And teachers need to be well trained to be able to offer diverse programming for the different skill levels of students to tap talents in the fine arts; drama; technical, vocational and robotics programs, etc. 

Cassis bill increases Homestead Property Tax Credit

I recently introduced legislation to provide relief to homeowners struggling in the current housing market by increasing the Homestead Property Tax Credit from $1,200 to $1,500.

Given Michigan’s continuing recession, slumping home values, high rate of foreclosures, and Michigan's property tax burden many residents are coping with stresses and having a hard time making ends meet.  This measure will provide real, immediate relief for homeowners and renters.  The Homestead Property Tax Credit has not been increased since 1975.

Michigan's Homestead Property Tax Credit helps qualified homeowners and renters pay some of their property taxes by providing them with a tax credit. For most people, the credit is based on a comparison between household income and property taxes paid.

As Chair of the Senate Finance Committee, I plan on taking up Senate Bill 1065 for discussion in the near future.

Budget process starts in Lansing

On February 7, the governor will release her 2009 Executive budget in a joint meeting with the House and Senate Appropriations Committee.  In the weeks ahead I will provide more information on the Executive budget process.

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State Senator Nancy Cassis, a Novi Republican, represents the 15th Senate District, which includes the townships of Commerce, Highland, Holly, Lyon, Milford, Novi, Rose, West Bloomfield and White Lake; as well as the Villages of Holly, Milford and Wolverine Lake; and the cities of Novi, Northville (the portion in Oakland County), Orchard Lake, South Lyon, Walled Lake and Wixom.