Whitmer proposes cutting taxes, insulin costs in 4th State of the State address

Jan 27, 2022 at 10:16 am
Gov. Gretchen Whitmer delivers her fourth State of the State speech, Jan. 26, 2022.
Gov. Gretchen Whitmer delivers her fourth State of the State speech, Jan. 26, 2022. Screenshot

Taxes, health care, including lowering insulin costs and increasing access to mental health resources, and growing Michigan’s electric vehicle industry were among the highlights Gov. Gretchen Whitmer tackled in her State of the State address Wednesday night.

Speaking live from the Detroit Diesel manufacturing floor, Whitmer delivered her second fully virtual State of the State status report  — her fourth total — featuring an introduction by Lt. Gov. Garlin Gilchrist III from the Upper Peninsula.

“While 2021 wasn’t as miraculous as any of us wanted, we have made progress. We’re stronger in large part thanks to science and life-saving vaccines. We have come a long way, and I am encouraged about the path ahead,” Whitmer said.

“…It can be hard to see in the moment, but tough times make us stronger.”

Whitmer acknowledged the “unexpected challenges and constant threats” at hand, including the ongoing COVID-19 pandemic, historic weather events and a foiled right-wing plot to kidnap and murder her, but focused on progress the state has made so far despite those and other challenges.

The first-term Democrat also proposed plans to expand the Earned Income Tax Credit (EITC), end the state’s “retirement tax,” lower insulin costs, expand access to mental health resources and make electric vehicles more affordable with rebates for families.

Whitmer said that although the pandemic slowed down her trademark goal to “fix the damn roads” and her plan to invest in better infrastructure overall, the state has still made progress. She cited highways, roads and bridges that have been repaired, built or rehabilitated since she took office.

She noted that billions more in funding from the $1.2 trillion federal Bipartisan Infrastructure Plan are set to “turbocharge” that progress.

Much like her 2021 address, Whitmer struck a tone of bipartisan unity Wednesday with the state’s Republicans — despite being sharply criticized by GOP legislative leaders both before and after her speech.

“I know at times our nation’s capital feels hopelessly gridlocked, but at our state Capitol, Republicans and Democrats have shown we can come together to put Michiganders first,” she said, citing childcare access expansion, small business relief funds, criminal justice reforms, historic education funding and more accomplishments forged from bipartisanship.

In contrast, Senate Majority Leader Mike Shirkey (R-Clarklake) said in a press conference earlier Wednesday that “ineffective and tone-deaf leadership both in Washington and the governor’s mansion allowed Michigan to be controlled by the COVID-19 pandemic.”

Shirkey added that the Democratic administration’s past COVID-19 orders have been “often illogical” and “based on a common theme of fear.”

The state, which currently has no restrictions to address the spike in COVID-19 infections, has recorded as many as 20,000 cases per day and a record 4,580 hospitalizations as of Jan. 10 — the highest number yet of pandemic. More than 29,000 people have died.

But Whitmer kept an optimistic focus throughout her speech.

Once, she said, Michigan was unable to economically compete with other states. Pointing to Tuesday’s news that General Motors will invest up to $7 billion in Michigan’s electric vehicle (EV) industry, Whitmer said that is no longer the case.

“Yesterday, the world saw what we can accomplish,” Whitmer said. “Democrats, Republicans, businesses, utilities and labor joined forces to equip Michigan with solid economic tools to attract big projects and create thousands of jobs.  

“We showed the world that we have tools, we move fast, and we work together. And Michigan is going to win.”

To continue building that momentum, Whitmer proposed several initiatives to save Michiganders money and support working families.

Whitmer said she is seeking a repeal of the controversial “retirement tax,” enacted under GOP former Gov. Rick Snyder in 2011. That policy taxes the pensions and 401(k) incomes of the state’s retirees, which Snyder argued was necessary to make all residents pay their fair share and save the state money.

Whitmer first called to repeal the pension tax in 2019.

“If we phase it out over the next few years, we can save half a million households in Michigan an average of $1,000 bucks a year,” Whitmer said Wednesday. “That’s money for prescriptions, rent, car payments, or gifts for grandkids.”

She said she is ready to work with Republicans to roll back the policy.

Michigan’s largest labor group, the Michigan AFL-CIO, said the plan has been a “top priority of Michigan’s labor movement since former Governor Snyder first taxed Michiganders’ pensions.

“Retirees across our great state are so grateful to have Governor Whitmer as their champion, always prioritizing their right to retire with dignity and the protection of their hard-earned pensions,” AFL-CIO President Ron Bieber continued in a statement Wednesday evening.

The Michigan Education Association (MEA) also quickly released a statement praising the proposal.

“The Michigan Education Association strongly supports Governor Whitmer’s proposal to finally eliminate Michigan’s unfair retirement tax. Michigan seniors cannot continue shouldering such a heavy burden while corporate special interests enjoy disproportionately low tax bills,” MEA President Paula Herbart said.

“We need real tax reform that levels the playing field for Michigan families and properly funds our children’s schools. Eliminating the unfair retirement tax on seniors is a step in the right direction.”

Whitmer also called for the Michigan EITC to be raised. The two tax proposals combined “will keep more money in people’s pockets, and … ensure less comes out,” she said.

In addition to enacting the pension tax in 2011, Snyder also lowered the EITC to 6% that year to help pay for his business tax cut. The bipartisan tax break helps lower-income families and others.

“In 2010, Michiganders received an almost $3,000 tax refund from the combined EITC. But a year later, taxes on working families went up to pay for a tax giveaway for big corporations they didn’t need. That’s not right,” Whitmer said.

She said that restoring the EITC back to 20% of the federal credit would lift more than 22,000 people out of working poverty, and send more than 730,000 families an average refund of nearly $3,000 once again.

State Sen. Erika Geiss (D-Taylor) said the proposal is “exactly the type of nudge needed to bring economic relief to thousands of Michigan workers and their families,” which she noted is especially crucial among Black and Brown communities.

The Michigan League for Public Policy (MLPP) also heralded the move. The Lansing-based group has been supportive of the EITC since its creation in 2006 and has fought to expand it again since 2011.

“This one-two punch of economic impact bumps up everyone’s bottom line and benefits every corner of the state,” MLPP President and CEO Monique Stanton said.

And, as the Michigan Advance first reported earlier Wednesday, Whitmer announced a plan to cap the cost of insulin at $50 per month.

Due to the high prices of insulin, “too many Michiganders are forced to forgo insulin or ration it — putting their lives at risk,” she said.

“We all agree that insulin costs too much, and I know we can work together to hold drug companies accountable, lower costs and save lives.”

The proposal was applauded by the Committee to Protect Health Care doctors’ group.

“As a family physician, I’ve seen too many times what happens to people when they can’t afford the insulin or prescription drugs they need, so I’m thankful that Governor Whitmer is working to tackle these critical issues for Michiganders,” said Dr. Farhan Bhatti, the committee’s Michigan lead and a family physician in Lansing.

“The ongoing pandemic has only highlighted the need to make prescriptions more affordable so that people can stay healthy and take care of their families regardless of their income. … I commend Gov. Whitmer for taking this step to help individuals thrive and to strengthen our state,” Bhatti continued.

According to Whitmer’s office, more than 912,000 Michiganders need insulin. With the average cost of a single vial at $98.70 and most people needing two or three vials per month, those costs can add up to around $200 or $300 in a single month. That price tag has tripled over the last decade.

There is currently a bipartisan bill to cap the cost of insulin that cleared the state House last March. It has yet to clear the Michigan Senate.

Finally, Whitmer put forth a plan to better address mental health by expanding Michigan’s Loan Repayment Program for mental health professionals and investing to retain more mental health workers.

She added that she also plans to invest further in mental health in next year’s school aid budget.

Several Democratic lawmakers and state groups, including the Michigan Association of Counties (MAC), thanked Whitmer for prioritizing the issue.

“Our communities have been struggling with mental health for some time, and those problems have only been made worse by the COVID pandemic,”  state Sen. Stephanie Chang (D-Detroit) said in a statement.

“I am excited to partner with the governor and all colleagues to ensure we are doing everything we can to recruit more people to become social workers by incentivizing them toward public service, investing in training, and helping them pay back their expensive student loans.”

Despite mostly positive reactions, the Michigan Environmental Council (MEC) noted that Whitmer missed an opportunity in her speech to emphasize the importance of protecting the environment and access to clean water.

“Support for the $3.3 billion water infrastructure supplemental under discussion in the legislature and the passage of Filter First legislation that prevents lead poisoning from school drinking water are two ways the administration could take further action this year,” MEC President and CEO Conan Smith said.

“It is unfortunate that calls to support these efforts were absent in the final address, despite the overwhelming support these policies have amongst Michiganders and the legislature.”

Originally published Jan. 27 by Michigan Advance. It is republished with permission.