By Jackie Smith
mlive.com
(TNS)
LANSING, MI – Some state lawmakers are reviving the push to tax Michigan’s wealthiest earners to drum up more money for K-12 schools after a campaign to get a proposal on November’s ballot was suspended earlier this year.
The coalition driving the “Invest in MI Kids” initiative announced in March that organizers were pressing pause on the effort with plans to resume campaigning next year for a question on the 2028 ballot.
But earlier this week, state Sen. Stephanie Chang, D-Detroit, introduced a resolution advocating for the same idea as the ballot drive, proposing a 5% tax on the income of individuals earning more than $500,000 a year or at least a $1 million for join earners.
“Michiganders deserve strong communities—including affordable housing options, healthcare they can afford, quality schools for all our children, and water infrastructure we can rely on,” Chang said in a statement Wednesday, July 15.
“Our proposal to make the wealthy pay their fair share in taxes will help raise more than a million dollars specifically for many of the most critical priorities that we need in order to have a good quality of life.”
Although Invest in MI Kids organizers called for another shot at the ballot in two years, the joint Senate resolution calls for levying the “fair share surcharge” after Jan. 1, 2027. Additionally, starting with 2028, it proposes adjusting the tax rate annually based on the percentage increase of the U.S. Consumer Price Index for the previous year.
After it was introduced, the resolution was forward to the Senate’s committee on government operations.
Currently, Michigan has a flat 4.25% personal income tax.
Some business groups, including the Michigan Chamber of Commerce and Michigan Restaurant and Lodging Association, have been opposed to the idea of an additional surcharge, airing concerns that it would “wreck” small businesses and decrease the minimum wage.
However, school advocates have said additional sources of revenue to support K-12 education is needed to help keep students from falling behind.
Originally dubbed “babies over billionaires,” the push to send a jolt of funds to Michigan’s public schools also came after years of stagnant or slow-to-grow per-student funding levels from the state in contrast to rising in inflationary costs.
According to a 2023 study from the Education Law Center, it would cost an estimated $4.5 billion to fill major funding gaps in Michigan’s local school districts.
Organizers have said the tax would apply to fewer than 60,000 of the state’s 4.9 million income tax filers in 2021 who made more than $500,000, raising about $1.7 billion or less than a 10% increase of the state’s last K-12 budget.
State lawmakers recently OK’d an education budget for the 2026-27 school year and continued to draw some criticism across the state for cuts to schools.
Overall, schools are expected to see a 2.5% or $250 per-student hike in per-pupil funding, a $502 million investment in literacy and academic program support, more than $300 million for mental health and school safety grants, $150 million for one-time educator compensation funds, and $123 million for special education student supports.
“This budget clearly illustrates that Michigan has a revenue problem,” Rachelle Crow-Hercher, director of the Michigan Education Justice Coalition, said in a statement this week. “In order to fulfill our obligations to make sure every child in Michigan has a quality public education and attends a fully funded school, we must address raising revenue.”
Photo credit: Michigan State Capitol Commission
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Tags: Income Taxes, michigan, Taxes, wealthy
