Press Release: Policymakers urged to use budget surplus for retirees’ pension tax relief

As state government anticipates another revenue windfall of billions of dollars, the Michigan Association of Retired School Personnel (MARSP) urges policymakers to provide tax relief to seniors and retirees who helped bail the state out of tough budgetary times for the past decade.

“We appreciate Gov. Gretchen Whitmer’s call to action to return the pension tax exemption for seniors,” explains MARSP Executive Director Royce Humm. “In 2011, when state government was facing a budget deficit, it boosted the tax on seniors’ pensions in order to balance the state books. It is time now, when state coffers are full, for policymakers to return some of the current surplus to seniors and retirees who had not expected, or planned for, the tax increase prior to their retirements.”

Public Act 38 of 2011 significantly reduced a promised, long-standing income tax exemption for pension income based on pensioners’ birthdates. State officials estimated that taxing seniors’ pensions would bring in hundreds of millions of dollars, which proved accurate. A number of bills have been introduced since 2011 on both sides of the aisle to reduce, reform, or repeal Michigan’s “pension tax,” but taxation of seniors’ pensions continues.

“MARSP members are weary of inaction,” Humm says. “With more than adequate general fund revenue to work with, policymakers should now provide relief and respect our seniors.”

MARSP is a statewide association of more than 35,000 public school retirees who rely on state provided pensions and health care.

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