Senate Panel Passes Sales Tax on the Difference Escalation

The Senate Finance Committee met this week and approved Senate Bills 10 and 11 which amend the General Sales and Use Tax Acts to accelerate the schedule that excludes from taxation the value of a motor vehicle traded in for a new or used vehicle.

Under this legislation, exemption from the “sales tax on the difference” between the purchase price of a motor vehicle and what a purchaser actually pays after deducting the trade-in value of the vehicle it replaces would be fully implemented in 10 years rather than 23 years.

Under current law, vehicles purchased in 2015 would see $2,500 of a trade-in exempted from the sales tax, with that increasing $500 each year until 2039 when the entire value would be exempt. These bills would double the exemption for the current year as well as the annual increase, making the full value exempt in 2025.

Speaking in support of the legislation in Committee were representatives from the Auto Dealers Association, arguing the current exemption had contributed to the increase in vehicle purchases in the state. School and local government groups opposed the measure; however, arguing they had agreed to current law and could not absorb the revenue cut the bills would cause.

The Senate Fiscal Agency estimated the bills would cost the state $23.9 million in the current fiscal year ($19.5 million from the School Aid Fund, $1.2 million from the Comprehensive Transportation Fund, and $3.2 million from the General Fund), as well as cost local governments $2.78 million in constitutional revenue sharing. The school groups opposing these bills indicated they would remove their opposition if there was language holding the School Aid Fund harmless from any reductions. Senator Steve Bieda (D-Warren) said he would introduce such an amendment on the Senate floor.

The other bills in the package, SB 232 and SB 233, simply correct language in the law that currently applies it only to Michigan deals. If these bill become law it would ensure vehicles purchased out of state would have the same tax treatment as those purchased right here in Michigan.

posted by PAA Online , Friday, March 27, 2015 12:56 PM
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DHS – DCH Merger Gets Green Light

A resolution to block the Department of Human Services (DHS) and the Department of Community Health (DCH) merger until Michigan Governor Rick Snyder provides more details on savings was not acted on by the House on Thursday, meaning Governor Snyder's Executive Order is free to take effect on April 10.

The Legislature adjourned on Thursday for a two-week Spring recess and will return on April 13th. Snyder's order to merge the two departments will take effect on April 10, but Representative Henry Yanez (D-Sterling Heights) still introduced HCR 6 on Thursday in an attempt to block the merger

House Speaker Kevin Cotter (R-Mount Pleasant); however, said he expects efficiencies in the merger and doesn't see any reason to block it. The Speaker added he would like to see a big savings at the front end; however, understands it is going to take some time to realize the savings and there is also a cost associated with merging.

posted by PAA Online , 12:53 PM
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Seven Charter Authorizers have Warnings Withdrawn

Only four charter authorizers remain at risk of having their authority suspended, Superintendent of Public Instruction Mike Flanagan declared Wednesday.

Of the original 11 authorizers he had listed at risk of losing authority only Detroit Public Schools (DPS), the Education Achievement Authority (EAA), Highland Park Public Schools and Eastern Michigan University (EMU) remain on the at-risk list. At the time the original list was released, several of the others had, questioned their inclusion given overall performance.

Of note, three of those remaining on the list are tied to the EAA, as it is an inter-local agreement between DPS and EMU. Highland Park remains under an emergency manager and is one of two in the state where the schools are run by a charter operator.

Mr. Flanagan said those authorizers would remain on the at-risk list for now, leaving a decision on suspending their authority (existing charters would remain open but they could not authorize new ones) to incoming superintendent Brian Whiston. But department officials said he still retained the right to act if the current situation changed between now and July 1.

Jared Burkhart, Director of the Michigan Council of Charter School Authorizers, said removing the authorizers was a step, but the department needs a clearer process for adding authorizers to or removing them from the list.

Cindy Schumacher, Executive Director of The Governor John Engler Center for Charter Schools at Central Michigan University, said her group is working to put the accreditation system into statute, and Michigan Association of Public School Academies President Dan Quisenberry urged continued work on a proposal.

posted by PAA Online , 11:46 AM
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PAAdvisory Briefs

Benishek to Seek Re-election

Nearly five years after signing a pledge to support a three-term limit for members of Congress, U.S. Representative Dan Benishek(R-Crystal Falls) is planning to run for a fourth. When he first ran for office in 2010, the Congressman made a pledge that he would serve just three terms and leave the 1^st U.S. House District an open seat in 2016. In a radio interview this week; however, he announced that he would seek a fourth term.

STEM Diploma Endorsement Moves

The Senate Education Committee this week reported out Senate Bills 169 and 170, setting up a system for high school diploma endorsements in science, technology, engineering and math (STEM) for certain pupils. Both were reported with an S-1 substitute. The package was amended to shift the responsibility of issuing the endorsement to the Center for Educational Performance and Information (CEPI) and to allow a parent or legal guardian in a homeschool situation, or in a non-public school, the principal or chief administrative officer, to issue a STEM certification.

Ticket Scalping Measure Clears House

A bill that would allow a person to resell an event ticket for more than face value cleared the House on Wednesday. HB 4015, sponsored by Representative Tim Kelly (R-Saginaw) passed the chamber 70-40.The bill passed with an amendment from Representative Sam Singh (D-East Lansing) that would ban the use of bots – a term used to describe resellers using computers to buy a large amount of tickets quickly so tickets are not available to the average fan – from buying a mass amount of tickets from the sellers’ website. Those opposed have said that legalizing ticket scalping will further increase ticket prices for the consumer. The bill now goes to the Senate for consideration.

Unemployment Drops Below 6%

Employment increasing and the workforce decreasing drove the state’s unemployment rate to 5.9 percent in February, the Department of Technology, Management and Budget announced Wednesday. The new rate represented a 0.4 percentage point drop from January and a substantial drop from the 7.8 percent rate in February 2014. The new Michigan rate is the lowest since October 2001, but the report said the state’s workforce is still some 300,000 less than it was then. The decrease represented 13,000 new jobs in the state, the fifth consecutive month of increase, but also 5,000 fewer people working or looking for work, according to the report.

posted by PAA Online , 11:45 AM
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