In an effort to generate feedback and spur debate, the Snyder Administration released a discussion draft of their proposal to replace the Michigan Business Tax (MBT) with the Michigan Corporate Income Tax. A copy of the document can be found at http://www.gongwer.com/public/biztaxdraft.pdf.

The proposal, which will no doubt be brought into further focus when the Governor releases his budget next month, follows through on Snyder’s campaign promise of a simplified, 6-percent corporate income tax. Only one credit will remain, the small business credit, as the proposal eliminates all other credit structures (e.g. film credit, MEGA credit, industrial property tax credit); however, retains the favorable treatment of insurance companies and financial institutions and the $350,000 filing threshold.

As a corporate-level tax, the proposal eliminates taxation of partnerships, limited liability companies (LLCs), S Corporations, and proprietorships. This, added to the elimination of the gross-receipts tax, which accounted for roughly two-thirds of the MBT, put the revenue estimates for this proposal at $1.5 Billion below the MBT – a significant number considering the State is already facing an approximate $1.85 budget deficit for the next fiscal year.

The coming days and weeks will certainly begin the debate the release of this preliminary draft was intended to generate as the proposal is reviewed and analyzed by legislators, staff and interest groups. Stay tuned to PAAdvisory for timely updates.

On the heels of endorsement by Governor Rick Snyder during his first State of the State Address, the initiative to build a new international bridge aross the Detroit River into Canada continued to build momentum this week. The Detroit River International Crossing (DRIC) bridge may even get a new name, if Governor Snyder has his wish; he stated this week that all involved need to differentiate between last year’s failed proposal and the reinvented initiative.

Legislation, House Bill 4131 and Senate Bill 66, have been introduced by Representative Douglas Geiss (D-Taylor) and Senator Hoon-Yung Hopgood (D-Taylor), both of whom represent downriver Detroit communities that stand to benefit from the proposed project. Furthermore, the House and Senate Transportation committee chairs, Representative Paul Opsommer (R-DeWitt) and Senator Tom Casperson (R-Escanaba), have been discussing how to handle the debate and are considering joint hearings on the topic.

The project has also won support from leaders of Michigan’s agricultural industry through a coalition including the Michigan Allied Poultry Industries, the Michigan Milk Producers Association, the Michigan Agri-Business Association, the Potato Growers of Michigan and GreenStone Farm Credit Services. All four living former Michigan Governors have indicated their support for the project, as well.

Former Governor Jennifer Granholm and her husband, former First Gentleman Dan Mulhern, are headed to California for teaching positions at the University of California-Berkley, Granholm’s alma mater. Both will begin teaching immediately and finish the 2011 academic year on a part-time basis, followed by commitments through 2013. In addition to teaching and finishing a book on her experiences as Governor, slated for publication in September, Granholm will also become a commentator for NBC’s “Meet the Press.”

Granholm, whose parents live in California, and Mulhern reported their intentions of making Michigan their permanent home and are evidently searching for waterfront property.

Governor Rick Snyder continued to announce appointments to several boards, commissions and other positions:

House Republican, Democrat Campaign Teams Announced
After winning 20 seats in last November’s Republican sweep, the House Republican Caucus announced their campaign team will stay in place for the 2011-12 term. Rep. Pete Lund (R-Shelby Township) will remain campaign chair and Reps. John Walsh (R-Livonia) and Joseph Haveman (R-Holland) will stay on as finance co-chairs. Meanwhile, the House Democratic Caucus will also keep the leader of their campaign efforts who completed the last cycle after taking over in March, Rep. Jon Switalski (D-Warren).

Civil Service Commission (CSC) Approves Domestic Partner Benefits
Letters of understanding approved by the CSC this week will allow state employees represented by the Service Employees International Union (SEIU), United Auto Workers (UAW) and non-exclusively represented employees to have their benefits extended to “other eligible adult individuals” who are not members of the employee’s immediate family; and who have shared a permanent residence for at least 12 consecutive months.

“Citizen-Friendly” Financial Statement Coming
In an effort to create an improved public understanding of the State’s fiscal condition, Governor Snyder’s Administration will be releasing a “citizen-friendly” or plain-language version of the state’s comprehensive annual financial report (CAFR). It is expected that the report will be released publically following the Governor’s appearance at the Business Leaders for Michigan 2011 Leadership Summit this coming Monday in Lansing.