Michigan Dem pitches bill to hike corporate taxes, divert state spending to schools

Legislation introduced by state Rep. Dylan Wegela (D-Garden City) aims to raise Michigan’s corporate income tax rate—and invest billions of dollars into public schools. 

LANSING—A bill introduced this week in the state House of Representatives would ramp up corporate income taxes and slash corporate subsidies, freeing up billions of dollars in state funding that could instead be used for “historic” investments in Michigan’s public schools.

State Rep. Dylan Wegela (D-Garden City) described his two-pronged legislation, which he introduced on Tuesday, as “simple.” First, it would hike the state’s corporate income tax rate from 6% to 10%. Second, it would eliminate $500 million in annual state spending that helps incentivize economic development through the Strategic Outreach and Reserve (SOAR) Fund.

And with the extra cash, Wegela said lawmakers would have about $2.4 billion annually that could instead be invested directly into supporting students and teachers in public schools.

“This would be a historic investment that fundamentally changes the quality of our public schools,” Wegela said in a press release announcing the legislation. “To put this in context: If all of this funding was given directly to Michigan’s roughly 98,058 instructional staff members as a salary raise, each instructional staff member could receive upwards of a $20,000 raise.”

Yesterday, I introduced HB 6105. A bill that would raise the corporate income tax by 4%, shift tax dollars away from corporate handouts, and instead make major investments in Michigan’s public schools and teachers. (1/2) pic.twitter.com/yrjjzcbE4S

— Dylan Wegela (@DylanWegela) November 13, 2024

The state’s SOAR fund has been a critical component of Gov. Gretchen Whitmer’s “Make it in Michigan” agenda, as well as the state’s ability to attract new manufacturers, industries, and jobs. Wegela has been an outspoken critic of state incentives for economic development. 

Wegela is a former teacher and union organizer who was re-elected in November. House Bill 6105, which hasn’t been posted online, is part of his “new vision” for state spending that will raise taxes on the wealthy and direct more tax money for “public good,” Wegela said.

“Right now what we are seeing in Lansing is the mismanagement of our tax dollars,” Wegela said in a press release. “It is our responsibility as representatives of the people to ensure taxpayer dollars stay in public spaces like our schools. This ensures that we are investing in the future of all Michiganders, instead of lining the pockets of shareholders and CEOs.”

A $23 billion budget bill that Whitmer signed into law this summer marked a record-breaking state investment in Michigan’s students and public schools—including an entirely free education from preschool through community college. Democratic state lawmakers also passed a $126 million supplemental budget for Michigan’s public schools, which Whitmer signed in October.

Still, Wegela contends the state can always be doing more to support public education.

“Strong public schools are the centerpiece of strong communities,” Wegela said in a press release announcing the legislation. “While I am proud of the work we have done in the legislature to increase investments in our students and teachers, we need to do more.”

Democratic lawmakers hold a majority in the state Legislature until next year, when Republicans will take charge of the Michigan House of Representatives as a result of this year’s elections.

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