Senators Switalski and Cassis asked and were granted unanimous consent to make statements and moved that the statements be printed in the Journal.
The motion prevailed.
Senator Switalski’s statement is as follows:
I was prepared to go along with this because it is a small amount, and it is an investment. This is a very important issue, and it speaks to a very important principle. Are we going to pay as we go? If people are proposing tax credits or tax loopholes or tax expenditures, we better figure out how we are going to pay for those things. As the chair of Appropriations rightly points out, the effect of that would be to lessen money to school aid.
Now all of us should know that the Revenue Estimating Conference identified $420 million shortage in school aid, which translates into a $268 per-pupil cut. If we want that to get bigger, we can hand out more credits. If we want that to get smaller, we need to hang onto the revenue that we have, and look for other ways to generate revenue if you want to lower that.
If you are happy with a $268 per-pupil cut, then keep the status quo on the credits. Don’t add to the credits because this will enlarge that number. I stand convinced by the chair of Appropriations that we should vote “no” on this bill.
Senator Cassis’ statement is as follows:
This bill, as you know because we discussed it on the floor briefly last week, passed unanimously with total bipartisan support out of the Senate Finance Committee. I always appreciate when certain members of this great body get religion and now want to find ways of saving money in a way that goes against consumer-friendly legislation, which this is.
This bill, as you know, will amend the streamline sales and use tax revenue equalization tax to let a person, meaning a consumer, a customer, to claim a credit equal to the sales tax paid on a core charge. Let me clarify so that everyone is on the same page. Under current law with heavy earth-moving equipment—and as you know, this industry has been probably the most hard hit of all businesses in our state when such a part fails like an alternator, it can be replaced with a rebuilt part. That just makes common sense. When the rebuilt part is purchased, a core charge that is similar to a deposit is assessed to encourage the worn out or broken part to be returned. The core charge is subject to the sales tax. Now when that customer does return that worn-out or broken part, they are refunded the core charge but not the sales tax on it.
Let me give an analogy here which I think is particularly appropriate. This process is similar to the 10 cents bottle deposit which is assessed on every pop bottle purchased. When the bottle is returned, 10 cents is refunded to the customer. However, the major difference with a core charge is that the sales tax which is assessed on the core charge is never returned because the sales tax up till now has not been considered appropriate for refundability.
This bill will allow a person to claim the credit from the Department of Treasury equal to the sales tax they pay. Importantly, it will encourage the manufacturing of cores in Michigan and protect Michigan construction jobs by making Michigan competitive with other states who do exempt cores from sales tax.
This is Michigan businesses. These are Michigan jobs. These are Michigan customers, clients, and Michigan consumers. It is environmentally-friendly, and I’m sure you have already seen that amply as we’re encouraging recycling. It will cut down the amount of cores which are placed in landfills or scrap yards annually.
I think this is a good bill. I hope you see it as we do. It has been thoroughly vetted and supported in a bipartisan fashion. I ask for your support