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Posted on 01.19.2018 Under Legislative, Recent Post

Judy Augenstein, Legislative Consultant

Michigan’s first gubernatorial veto override since 2002 became official this week when the House concurred with the Senate in pushing into law an accelerated sales tax phase-out on used car trade-ins.  Governor Rick Snyder commented that “changing the tax code without a plan to pay for it challenges the conservative fiscal responsibility of the past seven years.

A reinvention of the tax code balanced with responsible management of taxpayer dollars created our state’s comeback and we need to stay on the current course”.  Governor Snyder was not surprised at the vote since there has been talk since last summer about the House and Senate attempting to override his veto.

The veto override came as the North American Auto show takes place in Detroit; also as legislators and Governor Snyder attempt to hash out the size of a personal exemption on state income taxes.  Snyder wants 4,500, the House wants $4,800 with an additional $100 exemption for seniors.  The Senate wants $5,000 with a new child/elder care credit.   The Legislature left Lansing this week without coming to agreement on the personal exemption on state income taxes.  The income tax rollback is the result of unintended consequences in the new federal tax law.

This week a Joint Meeting with the Senate and House Transportation Committees held a hearing and took testimony on the impact of Federal Regulations on the trucking industry in Michigan.  All testifying commented on the additional costs and burdens the new ELD’s have on haulers and that the situation creates a less safe environment as truckers are pushing to get their daily “haul schedule” done in the mandatory 14-hour requirement.

Mike Elenz, MAT, a small Gaylord business owner with two log trucks and six employees outlined the challenges of the new ELD requirements.  Mike testified that they also continue to do a paper log as the new ELD’s require additional IT support which is not always available.

The average cost of a “box” runs $1,000 and requires an additional computer like service estimated at some $50 per month.  If a driver runs out of time during his 14-hour window of work, he either has to stay overnight when the time frame expires or someone else from Mike’s company has to travel to retrieve the driver.   His business is less profitable because of the additional requirements and costs.  Mike was the first to testify and please “click” on the attachment to view a picture of Mike giving excellent testimony.  He was the only log hauler to testify as we received real short notice on the hearing.

Ralph Bailey, Lansing, testifying on behalf of MSTA indicated that most septic haulers are mom/pop operations and the 14-hour limit gets eaten up real fast.  The ELD’s and their monthly hook up costs these small businesses more money and Ralph has concerns that drivers or the public are not any safer because of the regulations.  If a hauler has to travel from Lansing to Detroit and has a mechanical issue or other problem the 14-hour window goes fast and a driver can easily get out of compliance.

Phil Meyers, Ralph Meyers Trucking Incorporated, testified his company has been in business 75 years and it is typical to travel daily from Grand Rapids to Detroit to Toledo which the new ELD’s make it impossible to complete the traditional route.  He mirrored similar comments by Mike and Ralph.

Dave Wozniak, Jr., M C VanKampen Trucking, brought 12 other trucking company representatives from Grand Rapids area with him and served as the spokesperson for all.  Dave’s company employees 120 and runs nationwide.  The new ELD’s put a huge burden on his company.  Training for each driver averages $1,000 on top of the costs of the ELD device and its service costs.  Dave also outlined the California experience where they have somehow super-ceded federal regulations and passed an exemption to the federal regulations for “intra” state truck haulers.

Following the hearing Ralph Bailey, Mike Elenz and I approached  Senator Casperson and Rep. Cole to suggest Michigan mirror a legislative effort after California—they are on it!   Casperson and Cole are also preparing a resolution to forward to the Michigan congressional delegation and President Donald Trump.  All and all the hearing was very informative and beneficial.

Posted on 01.11.2018 Under Legislative, Recent Post

Judy Augenstein, Legislative Consultant

This week House and Senate leaders announced their legislative priorities for 2018.  Getting rid of driver responsibility fees and reforming mental health services in Michigan are among Speaker of the House Tom Leonard’s (R-DeWitt) legislative priorities for this year.  Getting the skilled trades package, which passed the House just before Christmas and awaits Senate action is another priority of House leadership.

Senate Majority Leader Arlan Meekhof, R-West Olive is focused on continuing the eighth year of a budget done ahead of schedule and addressing the impact of the new federal tax plan will have on Michigan taxpayers.  Meekhof also wants to address driver responsibility fee legislation.  The majority leader also is monitoring the proposed laws that may come before the legislature in the form of “citizens’ initiatives”.  So far, three initiative petitions have been submitted for the 2018 ballot regarding legalization of recreational marijuana, redistricting and repeal of the prevailing wage law.

Paying down the debt for MPSERS, State Employee Retirement, the State Police and other long term liabilities are a priority of both House Speaker Tom Leonard, R-DeWitt and Senate Majority Leader Arlan Meekhof, R- West Olive.

This week Governor Rick Snyder called for a simple fix to the tax exemption issue created by the federal tax cut.  Snyder is suggesting a simple and fair proposal to prevent state residents from paying as much as $1.6 billion more in state taxes.  Governor Snyder, Lt. governor Calley and State Treasurer Nick Khouri announced a plan to restore the ability of Michigan taxpayers to claim personal exemptions which has been lost under the federal change signed into law by President Donald Trump.  The proposal also calls for boosting the state’s personal exemption from $4,000 to $4,500 in 2021.  The exemption already would have risen under law that ties it to inflation, but not to the $4,500 amount by 2021.

The state is beginning work on the issue because the federal changes effectively do away with personal exemptions in favor of increasing the standard deduction.  Because the exemption will be ended, Michigan taxpayers cannot claim the state exemption when they pay their taxes in 2019.  State Treasurer Khouri contends the fix involves revising a date for the federal tax code in the state law.  The increase in the exemption, to be effective in 2021, will help take care of any additional increases in the tax liability in the next several years.  Senate Majority Leader Arlan Meekhof, R-West Olive and Speaker of the House Tom Leonard, R-DeWitt are reviewing the proposal and most likely will develop their own plan or blend a plan with Governor Snyder’s proposal.

The legislature was in session two days this week, but will return next week to resume their three day work schedule.

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