LANSING - Citing the need to curb irresponsible state spending, State Representative Alma Wheeler Smith (D-Salem) today voted against a plan that would worsen Michigan's budget deficit. The plan, sponsored by House Republicans, would increase the state's revenue shortfall by an additional $30 million a year.
"This bill defies fiscal responsibility and will foster even greater cuts," said Smith. "If we truly want to impact Michigan businesses, create new jobs and grow our economy, then we must roll up our sleeves for some heavy lifting and stop passing 'feel good' legislation that only serves to place Michigan deeper and deeper in debt."
Smith said she agreed with the principle of House Bill 4342, which purports to reduce taxes for employers offering health care coverage, but voted against the plan because of its piecemeal approach to business tax relief. Smith supports Governor Jennifer M. Granholm's revenue neutral and more comprehensive Single Business Tax restructuring plan that would reduce taxes for 80 percent of Michigan businesses and believes any health care coverage tax credit would be better introduced as part of that plan.
Additionally, Smith questions whether HB 4342 in its current form will even accomplish its intended goal. According to Michigan Department of Treasury and House Fiscal Agency analyses, the bill would create an average tax cut of less than $575 a year for the roughly 59,000 eligible businesses. This is hardly enough to create even one new job, let alone encourage more businesses to offer health care coverage.
"The Legislature must work with the Governor in a collaborative effort that addresses Michigan business taxes and health care as a whole and not in a piecemeal, politically expedient fashion," said Smith. "This legislation is little more than a dangerous political ploy that looks good on the surface but has serious repercussions - I will not take the bait. Instead, I will continue to work with my colleagues in the legislature, the Governor and leaders in the business community to find lasting solutions that provide real relief from the escalating costs of health care coverage."
House Bill 4342 passed the Michigan House of Representatives, 66-44.