LANSING –State Representative Joan Bauer (D-Lansing) today announced that her plan to create a city income tax check-off option that would allow taxpayers to contribute to a specified fund has passed the Michigan House.
"I'm so pleased and honored to have passed my first bill," Bauer said. "Check-off options give us different ways to help provide our cities with more revenue options, which is especially important during these tough economic times."
Bauer's bill, House Bill 4120, allows any city that collects its own income tax to create new check-off programs. Taxpayers may contribute all or a portion of their refund to a specified fund. The check-off fund would be a restricted fund within the city's general fund. The money may only be used for the specified purposes such as a fire trucks, youth programs, or senior programs, and may not lapse to the general fund. The city treasurer may direct the investment of the fund and use a small portion of the money to implement the fund. The fund also may collect interest, further appropriations from the city and other donations.
Check-offs are a line or box on a tax form that taxpayers can fill out to donate a portion of their refund to a particular fund. They are commonly used on federal and state income tax forms. Currently, 22 cities, including Lansing, collect a city income tax.
Bauer added several taxpayers had indicated their interest in donating their small refunds, inspiring her to introduce the bill. Lansing had 35,500 refunds under $20 during the 2005 tax year.
Bauer also expressed gratitude to State Sen. Gretchen Whitmer (D-East Lansing) for her work on this bill while she was a State Representative.
"Providing our local communities with creative ways to generate revenue while still providing our tax payers with the option to participate will help us maintain important local programs," Bauer said. "This is the right thing do for our taxpayers and the right thing to do for our community."