2008 Budget Agreement Reached

A message from MAR CEO Bill Martin:

Greetings Everyone:

Recently, the Michigan Legislature laid the final piece of the 2008 budget deal into place and averted a lengthy state government shutdown. Because "zero hour" had come and gone before the entire legislative package was voted on and presented to the governor, the state was forced into a partial shutdown of government services, including the closure of state parks, highway rest areas and the cessation of lottery sales at 12:01 a.m.

Included in the bargain is an increase in the state's income tax from 3.9% to 4.35% and the implementation of a 6% sales tax on approximately 23 services. To the right, please find a list of all services covered in this expansion. And while I am extremely disappointed to report that Gov. Granholm and the Legislature ignored the business community's adamant opposition to a sales tax on services of ANY KIND, we were successful in keeping REALTORS® and all real estate services from being taxed. The hard work that you provided earlier in the year laid the ground work for successful negotiations by staff to assure that real estate related services would be exempt from any service tax related solution. These tax bills along with several reform measures and a 30-day continuation budget are on their way to the governor's desk and will likely have been signed into law by the time you read this.

View a complete list of taxed services and corresponding NAICS industry code details

Here is the breakdown of the votes on the two tax bills:

To view the Senate voting breakdown, please click here.

To view the House voting breakdown, please click here.

If you are unhappy with the way your legislator voted, please contact them. You can find their contact information by clicking on the links below:

• www.house.mi.gov
• www.senate.michigan.gov

This brings to an end an especially trying time in Michigan's history. This “solution” to the state budget was, in my estimation, the wrong direction and the wrong answer at the wrong time. The long-held position of the MAR public policy committee is to support cuts and restructuring before any tax increases. Asking citizens and businesses to pay more from their hard earned “paycheck” is simply wrong. You can be proud of the work done by your very dedicated (and tired) public policy staff. They worked tirelessly, literally 24/7 at the Capitol for the past couple of weeks. Whether it was 10:00 a.m., 8:00 p.m., or 3:30 a.m., they were there to make sure nobody tried to sneak anything past us. Again, while not pleased with the outcome, we take some comfort in our successful efforts to make certain REALTORS® and real estate services were not taxed.

Please continue to pay attention to your emails and MAR publications for the very latest on this story. There still remains a lot of work to be done.