State of the State: Gov. Whitmer expected to propose plan to help low income workers, pensioners

Poll: What Michigan topic do you think should take center stage?
Virus Outbreak Michigan
Posted at 8:46 AM, Jan 26, 2022
and last updated 2022-01-26 18:18:21-05

(WXYZ) — Michigan Governor Gretchen Whitmer will deliver her State of the State address on Wednesday evening.

Which topic do you think should take center stage?

We're told the leader of the State of Michigan is getting ready to announce a plan to put more money back into the hands of low income workers and pensioners.

Lawmakers say meetings behind the scenes point to tax savings playing a key role in the governor’s State of the State speech. State lawmakers tell us two groups identified by the governor as needing the most help right now are people living on pensions and low income families — and that will be a focus of her speech.

State lawmakers say Governor Whitmer intends to propose major steps toward helping citizens surviving on a low wage and those living on a pension.

A single mother from Detroit’s east side, Johnettia Johnson, wants to know more.

"Start at the bottom with low income families and work your way up to the top. Hopefully, it helps a little bit more,” said Johnson.

State lawmakers with knowledge of discussions behind the scenes say Gov. Whitmer will push to repeal a tax on retirement income and triple a tax credit for low income workers.

"We have clients coming in and saying, 'I heard the governor is going to make a change. How will that affect me?'” said tax expert Jim Olah.

Olah calls it a big move considering how many people are trying to keep up with staggering inflation.

"For seniors who are receiving pension income, this will be a good change for them," he said.

With the state running a surplus and massive stimulus aid coming to Michigan, House members on both sides are optimistic the proposed additional tax credits will become a reality.

"Combined we’re talking about over a million Michiganders earning some level of tax relief. That’s good thing," said Rep. Darrin Camilleri (D-Brownstown Twp.)

Rep. Joe Bellino (R-Monroe) said "any kind of tax relief we bring for any people that live in Michigan, is good for Michigan.”

While proposals would reverse moves made by former Gov. Rick Snyder, professor of political science at Michigan State University Matt Grossman says this could be historic and benefit both parties.

"That doesn’t mean there won’t be disagreements, but certainly when there is more money to split, it becomes easier to make those deals," said Grossman.

Currently, the earned income tax credit gives working families who qualify a 6 percent refund on state taxes. Whitmer is expected to work to restore it to 20 percent.
That means an average tax credit going from $150 to about $500.

"There’s more money in the state and that means there’s more money to give away,” said Grossman.

And estimates from the state suggest 50,000 or more people could benefit from the higher pension tax credit, putting $1,000 a year back in people’s pockets.

For Johnson, stress of a pandemic has her saying any help is being welcomed and would go a long way.

"Gas. Home repairs. Children needing coats and hats and gloves, and scarves and boats. Groceries. Definitely," said Johnson.

A timeline on all this could still be in the process of being worked out, however bi-partisan support appears strong for providing tax relief. Whitmer is also expected to discuss road funding as well.

The State of the State address will take place virtually at 7 p.m. and be streamed on