Could city income taxes increase? - KCTV5

Could city income taxes increase?

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State Representative Andy Schor State Representative Andy Schor
LANSING, MI (WNEM) -

A State Representative has a plan to increase the income tax rates that some Michigan cities charge, a move that could bring increased revenues into those communities.

Representative Andy Schor's plan is to lift the current state cap on city income tax rates.

Right now, there is a 1 percent limit on city residents and a .5 percent limit on everyone else, but four cities are allowed to collect more than those rates. Those cities are Detroit, Grand Rapids, Saginaw and Highland Park. Detroit levies a 2.5 percent tax for residents and a 1.25 percent tax for nonresidents. Grand Rapids is at 1.3 percent and 0.65 percent. Highland Park levies a 2 percent tax on residents and a 1 percent increase on non-residents. Saginaw's tax rates are at 1.5 percent and 0.75 percent.

With Flint being one of the cities that is bound by the current tax code, Mayor Dayne Walling says Flint could benefit from raised rates to the tune of $10 million a year.

"The income tax is much better in alignment with our economic development efforts," says Walling. "It recognizes the role and burden for the city of being a regional employment hub."

There are 21 cities in the state that charge a tax on those working and living in the city, including Detroit, Grand Rapids, Saginaw, Highland Park, Albion, Battle Creek, Big Rapids, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield and Walker.

The legislation could take months to implement because Representative Schor hasn't signed the bill and needs to work with city officials about raising those income tax rates.

WNEM will continue to follow this story and provide updates as they become available.

Copyright 2013 WNEM (Meredith Corporation). All rights reserved.

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