State income tax to be raised

This week the Michigan House has found itself in a dilemma as opposing parties try to reach a compromise before the new fiscal year, which begins on October 1, in attempts, to deal with a $1.7 billion deficit. A raise in the state income tax from 3.9% to 4.6% has been agreed upon, with the Democratic plan involving implementation of ways to generate revenue, and Republicans offering budget cuts as their part of the solution. Even with the 18% tax raise, the budget gap will remain unfilled, making further cuts a necessity and forcing lawmakers to confront the fact that ignoring the challenge of the budget gap this long was a bad idea. While Democrats and Republicans have been struggling to reach an acceptable bi-partisan solution, time is running out. After a plan is approved in the House it has to go through the Senate, where it must sit for at least five days before it can be acted on. Checks to cover state bills are due Oct. 1, but will have to be processed by the end of the prior week, and missing any deadline will result in a great deal of damaged credit, not to mention negative attention to an already struggling economy.