LANSING –State Representative Joan Bauer (D-Lansing) today introduced a plan to create a city income tax check-off option that would allow taxpayers to contribute to a specified fund.
"This is a much-needed measure to help provide our cities with more revenue options," Bauer said. "Providing check-off options can help fund important local programs and can reduce administrative costs of issuing refunds. They also are optional for both the city and the taxpayer. This is a creative way to help out our cities in Michigan during tough budget times."
Bauer's bill, House Bill 4120, would allow 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 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. Michigan currently uses check-offs to collect contributions for the Children's Trust Fund, Military Family Relief Fund, Children of Veterans Tuition Grant Program, and the State Campaign Fund. Between 1983 and 2000, the Children's Trust Fund collected
$14.8 million from over 2 million state tax returns.
Bauer also expressed gratitude to State Sen. Gretchen Whitmer (D-East Lansing) for her work on this bill while she was a State Representative.
"I'm delighted that Rep. Bauer has hit the ground running at the State Capitol," said Lansing Mayor Virg Bernero. "This legislation will help cities like Lansing provide extra resources in key areas such as human services or public safety."
The plan passed the Tax Policy Committee unanimously today and now heads to the House floor for a vote.