August 30, 2006
August 30, 2006
Acknowledges Senate action on New Merit Award scholarship
LANSING – Governor Jennifer M. Granholm today said working families in Michigan are the winners in a legislative agreement reached by her administration and state lawmakers on Senate Bill 453 that will enact a state earned income tax credit (EITC). The decision will mean millions of additional dollars in disposable income for working families each year.
“Everyday we are fighting for working families, and today we have won a victory on their behalf,” Granholm said. “This agreement rewards the hard work of low wage workers and strengthens families by giving them more disposable household income.”
The agreement to enact a state EITC is part of an agreement on House Bill 6213 that would restore overtime exemptions that are scheduled to expire October 1. Under the agreement, working families will now be eligible to receive a percentage of the federal EITC.
Granholm also applauded the state Senate for advancing part of her comprehensive economic plan (Senate Bill 1335) that would grant a $4,000 New Merit scholarship to every student who successfully completes two years of college or technical training – an amount roughly equal to two years of community college tuition.
“Giving working families the means to help their children pay for higher education will help secure the middle class way of life in the 21st century they came to expect in the 20th century,” Granholm said. “We appreciate the Senate’s action today and the Speaker of the House expressing a willingness to take up the bill later this year. We are interested in his ideas on how we might improve the bill and student access to higher education.”
The EITC rewards work by providing assistance to low and moderate income working families.
In 2004, some 663,000 Michigan working families with incomes below $35,458 received federal refund checks for EITCs averaging $1,764. Depending on a person's income and number of dependents, the federal EITC can reach a maximum of over $2,700 for families with 1 child, and over $4,700 for families with two or more children. Almost 90 percent of the federal EITC is paid to taxpayers as a tax refund, and the new Michigan EITC will provide additional assistance to these working families.
Under today's agreement, working families in Michigan will be eligible for a phased-in percentage of the federal EITC, starting with 10 percent for 2008 and going up to 20 percent for 2009.
Michigan joins 17 states plus the District of Columbia that have enacted state-level earned income tax credits.
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