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Evening Out the City Income Tax

FOX 47 News

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Evening Out the City Income Tax

CREATED Jan. 23, 2013

22 cities in Michigan currently impose the city income tax. For most of them, people working and living in city limits pay an income tax rate of 1%, while those working but living outside of city limits pay half. Forking over extra is what some people say they're willing to do for working and living in the same city.

"As a resident here, there are some advantages we have of living here like police protection and what not, and I'm happy to pay that extra half a percent," said Kris Young, who works and lives in Lansing.

However, it's essential services like police and fire that Rep. Andy Schor, D-Lansing, says is given to everyone working in the city - and non-residents paying half of what residents pay simply doesn't add up.

"If you don't live in Lansing but work in Lansing, the services that we have to provide for you are costing more than the share you're providing in the city income tax," said Rep. Schor.

He's proposing to make some changes so that cities have the option of increasing the income tax rate on non-residents to match that of residents should the cities feel it's necessary. According to Rep. Schor, the alternative has become too much of a financial burden on local municipalities where residents are the ones picking up the slack.

"Like in Lansing we had a four-mill increase, which went to roads, police and fire and the residents are paying for that," said Rep. Schor.

However, Sen. Rick Jones, R-Grand Ledge, says the status quo is working well, while stirring it up could push people away.

"They could locate in a nearby township that doesn't have any income tax, so I think it's a bad idea for many reasons and I think we should leave it alone," said Sen. Jones.

According to Rep. Schor, the push for change comes after hearing suggestions from residents and local officials.

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