May 1, 2026 | This Week in Government: House Begins Property Tax Discussions, Dems Would Like to See the Math

Discussion on House Republican’s property tax proposal began in earnest on Thursday with the majority caucus touting it as a revenue neutral way to address the housing and affordability crisis, while House Democrats begged to see the math.

The plan, which was discussed before the House Government Operations Committee on Thursday, would cut $5 billion in property taxes and reduce utility bills by $1 billion statewide, House Republicans say.

Although the full package was not discussed before the committee on Thursday, the proposal includes HB 5873, HB 5874, HB 5875, HB 5876, HB 5877, HB 5878, HB 5879, and HB 5880.

Taken together, the package would eliminate the personal property tax, the state education property tax, repeal the real estate transfer tax, and require public utilities to reduce residential rates in correlation to personal property tax savings. A resolution, HJR, sponsored by Rep. Ann Bollin, R-Brighton, would eliminate the pop up tax. The matter of eliminating the pop up tax would ultimately have to be put to voters, as it would amend a section of the Constitution.

The last bill in the package, HB 5580, would extend the 6% sales tax to “covered services,” though it is not clear what those would be.

Rep. Luke Meerman, R-Coopersville, sponsor of HB 5880, acknowledged to reporters on Thursday the language of the bill was intentionally vague as decisions had not been finalized, but he said the tax would only be applied to luxury services.

House Speaker Matt Hall, R-Richland Township, said that what services would be included were still being determined, explaining that the tax policy conversation was “really complicated.”

“In order to get it precise, I think we really will benefit from collaboration with the Treasury Department,” he said. “I really want to make sure the local governments are healthy, they’re taken care of, and that the schools are held harmless.”

Hall said the total estimated value of all taxable services was $18 billion, and House Republicans were looking to make up $5 billion to support the property tax plan.

Rep. Brian BeGole, R-Perry, who chairs the House Government Operations Committee, said the property tax plan had every intention of backfilling the School Aid Fund and ensuring that local governments had enough.

“We definitely do plan on contributing back toward the school education tax,” he said. “Local government, traditionally, we’ve done really well with that. I mean, we’re anticipating a $60-some-million higher revenue sharing this year. We’ve delivered on the Public Safety Trust Fund, so they’ve seen an increase.”

The House provided a 1% increase to statutory revenue sharing in its 2026-27 budget proposal and the Senate provided no increase. Constitutional revenue sharing would also see a slight increase.

Prior to the property tax discussion, the committee also heard a presentation from

Ryan Kilpatrick, representing Flywheel, on housing opportunities in Michigan.

During his presentation, Kilpatrick noted that one of the things driving housing costs was the expense of building out infrastructure. He said changes to zoning to allow smaller lot sizes would allow local governments to bring in more revenue from additional taxes, which would, in turn, lower the cost of building out infrastructure.

Rep. John Fitzgerald, D-Wyoming, asked about how conversations about increasing housing density would play into the property tax discussion.

“We saw some of the tax revenues that could be generated by increasing that density. But, when we talk about eliminating the pop up, existing homes would not see as great an increase as, say, a new home would. So, a new home that’s built at $500,000 – those owners would then bear the brunt of paying that higher tax rate than those who might purchase a home that was last sold in 1995, 1999, 2005, and their tax burden would be low, increasing competition for an existing build,” he said. “What that might do to, again, the incentive to build new homes?”

Bollin said she thought the answer was to be found in the free market.

“The need will continue to be there, for both used and new housing,” she said. “If all the emphasis is on the new housing, you’re going to get people stuck. You’re not going to have neighborhood stabilization. You’re going to have people that can’t age in place. I think there are other problems, and we have to look at this much more holistically … this is about making sure that life is more affordable in the state of Michigan, and one of the biggest impediments to making life affordable is the cost of property taxes.”

BeGole also waved off the argument for addressing the housing shortage by increasing density.

“We’ll take a look at it,” he said. “We as Republicans, traditionally, like the idea of cutting taxes and solving the housing problem.”

Rep. Steve Frisbie, R-Battle Creek, discussed his bill to eliminate the state education tax, HB 5873.

He said the intention of the bill was to put money back in people’s pockets and force Lansing to address its “spending problem.”

“I added language that states it’s the intent of the Legislature to backfill any losses (to the School Aid Fund), which we can do by prioritizing our state spending better, and the elimination of more ghost jobs,” he said. “We don’t have a revenue problem. We have a spending problem.”

Rep. Regina Weiss, D-Oak Park, who worked on the K-12 education budget last term, talked to reporters about the proposal on the House floor. She said although affordability was important, the School Aid Fund was not the solution.

“This idea that we’re going to hold School Aid harmless, I’m just going to call bullshit on that,” she said. “There was no evidence in anything that they have provided that shows that they would actually hold School Aid harmless.”

Weiss pointed out there are no details about what the services tax bill will look like or how that revenue would be raised.

“We know what the cost would be to district, to schools, which is about $3.5 billion reduction in funding for our schools which they absolutely cannot absorb, and which we absolutely cannot pay for from the General Fund,” she said. “The idea that we’re going to pay for that … by eliminating ghost employees? I thought we already did that. … I don’t know where that money is coming from.”

She went on to say that last year, the Legislature similarly promised to hold the School Aid Fund harmless in its plan for funding roads, but ultimately the money that was backfilled was taken out to fund higher education to free up more money for the General Fund to support cuts that were made elsewhere to fund roads.

“We absolutely did not hold School Aid harmless with the roads package,” she said. “I have no confidence that this Legislature would continue to do that with this proposal.”

Weiss also expressed concern that the property tax proposal was not included in the budget proposal passed by the House last week, but Bollin said it did not need to be, because the property tax proposal was revenue neutral.

During committee, Fitzgerald raised concerns about how the proposal might affect local governments.

“If we don’t have this pop up or some sort of adjustment to equalize or bring that value up, cities, townships, counties … school districts, are going to be missing out on significant revenue that is important to preserving home value, creating community improvement, community integrity,” he said.

Bollin said, coming from local government, she did not think counting on an eventual increase in revenue from a pop up tax was a smart way for local governments to budget.

“I think that’s a poor way of budgeting, and maybe that’s why we have so many unfunded pension liabilities. How many are coming to the state, the federal government, for more money?” she said. “Maybe they should approach budgeting a little bit differently. I don’t think most of us anticipate and base (decisions) on our future potential earnings.”

She went on to say that revenue sharing has continued to increase, and local government has other ways of collecting revenue. Bollin also said that local governments have short-changed themselves by creating TIFS, downtown development authorities and increment financing districts.

“I would argue they’re not losing money they are currently not collecting,” she said.

The House is not in session next week, but BeGole said that within the next couple of weeks, he expected discussion on the bill package would continue.

“Hopefully, our plan is good and there won’t be a lot of controversy, because I think people really want us move on property tax,” he said. “This is one of our main efforts this year, so we’re hoping that we can come to a great agreement.”

Bipartisan bills that would create a housing opportunity tax credit program in Michigan were discussed by the House Regulatory Reform Committee on Thursday.

HB 5805 and HB 5807, sponsored by Rep. Joe Aragona, R-Clinton Township, would create a housing opportunity tax credit program to encourage the development of low-income buildings and allow insurers to claim the housing opportunity tax credit the insurer is eligible to claim for a qualified project.

HB 5806, sponsored by Rep. Kristian Grant, D-Grand Rapids, would allow taxpayers to claim a housing opportunity credit against the individual income tax, corporate income tax, or flow-through entity tax.

The tax credit would cost $42 million in its first year and $252 million or more by year six, the House Fiscal Agency said in an analysis.

“As you know, Michigan is in a housing crisis and we are short 100,000-plus units,” said Jennifer Bowman, director of federal and strategic initiatives at the Michigan State Housing Development Authority.

She said these bills are necessary additional financing tools that would help lead to more affordable homes being built and could create thousands of units per year across the state.

Michigan is the only state in the country that does not have a state housing credit and as time goes on, an increasing number of developers with a multi-state presence are leaving to create developments elsewhere, she said. Gov. Gretchen Whitmer called for the creation of a credit in her State of the State speech.

“We do not need help asking people to stop developing in Michigan, we need to encourage that development,” Bowman said. “This tool would help put us on even par with our colleagues around the Midwest.”

Grant said allowing Michigan to pair a state tax credit with the federal tax credit will enable the state to leverage federal dollars that are “left on the table right now.”

“This really is just a next step that will allow us to not only scale production but scale production for groups that are not seeing new housing hit the market, so really allowing people who need more affordable housing to have more options available to them,” she said.

Rep. Doug Wozniak, R-Shelby Township, asked how much time it would take for a developer to go through the application process.

Tony Lentych, chief housing investment officer at MSHDA, said it takes longer than they would like it to be, sometimes up to a year.

Lentych, on how to speed the process up, said MSHDA is trying to find ways to expedite the process by having environmental review and legal review happening at the same time, as opposed to a linear process.

Wozniak asked if there are any costs to the developer or builder and how one estimates the credit verses the value of the project. Lentych said there are upfront costs like producing site plans and estimating values, which depends on what the target rents are going to be.

“The lower the rents the more subsidy you’re going to require and that’s how we will adjust that,” Lentych said.

Mark Lockwood, president and chief executive officer of Lockwood Companies, spoke in support of the bills. Lockwood said rising interest rates have slowed production, making him worried about the future.

He said the current system is unpredictable and creates a narrow lane in ways developments can be built. The new tax credit would create opportunities for development of communities across the state.

“This credit is sent up to incentivize private capital investment that is leveraging federal resources that are currently under-utilized in the state of Michigan, he said. “Many states across the country have this credit and those states are finding by-in-large that they’re utilizing 100% of their federally allocated dollars in taxes and bonds and housing credits.”

Chris Potterpin, vice president of PK Companies, also spoke in support of the bills. He said interest rates have risen so much that projects that could have been built four years ago are no longer possible.

“That’s why we’re here in support of the Michigan Housing Opportunity Credit,” he said.

David Northern, chief executive officer of the Flint Housing Commission, said he has built affordable housing in many states with tax credits.

“The expansion of low-income tax credits at the state level should focus and give more points and ideas toward distressed cities similar to Flint,” he said.

He said building new developments also creates job opportunities for people in the state.

During the meeting, legislators also heard testimony on HB 5755, sponsored by Aragona. The bill would require all state agents to provide legislative reports to the State Department of Technology, Management and Budget.

Currently, each department – though not all – posts the reports the Legislature requires it to submit on state operations to its own website. It is difficult to locate all reports for each department.

Within 90 days, the DTMB would have to create a website and publish the legislative reports. These reports would be free and accessible to the public.

Rep. Ann Bollin, R-Brighton, testified in support of the bill. She said the legislation will enhance the public’s trust in state government.

“Transparency is not just a best practice, it is our responsibility,” she said.

A debate over budget stability preceded a party-line vote Wednesday in the Senate on a $63 billion omnibus budget bill for departments and agencies covering the upcoming fiscal year.

Majority Democrats said the Senate budget proposal that passed Wednesday for all state agencies, except for K-12, higher education, and community colleges, funds top state priorities while attempting to weather federal actions that are placing pressure on the state’s coffers.

Republicans countered that the state’s budget has exploded in size in recent years via excessive spending by Democrats. They said Democrats blew through a $9 billion surplus in only a few years while setting the stage for structural instability in state funding.

Senate Appropriations Committee Chair Sen. Sarah Anthony, D-Lansing, said the budget presented to the chamber seeks to provide funding for childcare, school meals for students, and expanded workforce training.

She added that the budget sought to cushion the blow of federal Medicaid cuts and other areas affected by federal tax law changes passed last year.

“This budget shows that even in uncertain times, the Michigan Senate is choosing stability, fairness and above all, the people of Michigan,” Anthony said.

Her comments came prior to the 19-18 vote on SB 878, a $63 billion ($12.7 billion General Fund) state government omnibus spending bill.

The Senate is expected to vote on an education omnibus bill Thursday containing $25.1 billion ($1.47 billion General Fund), which includes $22 billion for K-12 schools.

Taken together, the total Senate budget once passed would be $88.1 billion ($14.2 billion General Fund).

This is compared to the House budget which passed last week totaling $75.8 billion, which does not reference the $9 billion from Medicaid provider taxes that would be placed into a contingency fund, bringing their actual budget closer to $84.8 billion.

Senate Republicans laid into SB 878 on Wednesday, calling it shortsighted and full of waste and poor priorities.

Senate Minority Leader Aric Nesbitt, R-Porter Township, said Democrats have an insatiable desire for spending.

“Democrats can’t stop spending taxpayer like it’s theirs to burn,” Nesbitt said. “Hard working Michigan families balance their checkbooks every month. It’s time the government does the same.”

He said Democrats have spent so much that it is now trying to use the state’s rainy day fund.

“This bloated Democrat spending spree doesn’t deliver for the people, it delivers for their special interests. I vote no,” Nesbitt said.

Sen. Thomas Albert, R-Lowell, said the Senate budget has two major flaws: the use of $350 million in Budget Stabilization Fund monies and using one-time funding to cover the costs of ongoing programs.

“Democrats are far more worried about funding state government than helping struggling families,” Albert said. “Times are tough for many Michigan families, but this budget proposal won’t help them.”

Sen. Joseph Bellino, R-Monroe, said the Senate budget doubles down on Democratic policies which he said blew through the former surplus the state had while the state has slid into the bottom tier in the country in student reading scores and one of the highest unemployment rates in the country.

“You don’t smash open a piggy bank every time you have an impulse to spend,” Bellino said. “Michiganders deserve better than higher taxes.”

Wednesday’s vote came after 51 floor amendments were offered by Republicans, of which two were adopted.

One was from Sen. Jim Runestad, R-White Lake, that included language dealing with funding in the budget to increase staffing ratios in adult protective services programs.

The amendment stipulates that the purpose of the staffing increases is meant for increasing the standard of promptness for investigations, by beginning an investigation within 24 hours, establishing face-to-face contact with a client within 72 hours and completing an investigation within 30 days.

The other was from Albert and dealt with language in the Department of Labor and Economic Opportunity budget. The amendment as introduced would have prevented the department from providing grants to organizations that have a history of supporting terrorist organizations or threats of physical violence. Albert’s amendment was amended further by Anthony to specify that grants would be withheld from groups that have been convicted of the state’s statute on providing material support for terrorist acts or soliciting material support for terrorism.

SB 829 passed unanimously on Wednesday as well. The bill would provide funding for capital outlay projects through the Natural Resources Trust Fund. The bill includes $45 million for 75 projects.

Anthony told reporters that the Senate omitted the governor’s $800 million in tax increases on tobacco and vaping products or on online gaming, but they are open to negotiations if there are any responsible ways to raise revenue.

She said the key areas of focus in the Senate budget were healthcare and education, with an overall focus on also maintaining whatever is possible in areas within the budget the Democrats have tried to invest in in recent years.

The senator said it is good that both chambers have been able to pass their budgets, but she has observed some glaring differences between what was passed Wednesday and what the House focused on in its budget.

“One of the things that I’ve been concerned about is a lot of the boilerplate language,” Anthony said of the House budget. “There’s a lot of hateful language in there, particularly around marginalized communities. We’ve seen that be the M.O. of the House for a while, very divisive language that ultimately just divides our state.”

Anthony said that is something that she will want to address in negotiations with the House, along with the deep operations funding cuts in higher education, particularly for the University of Michigan and Michigan State University.

“There are some key contrasts that we’re looking at, but ultimately, when we get into the negotiations table, we’re going to be standing up for the people,” Anthony said. “I hope they can say that they’re doing the same.”

The Michigan Achievement Scholarship was the topic of conversation in multiple House committees on Wednesday.

In the full House Appropriations Committee, members discussed SB 382 and SB 383, which would codify the Michigan Achievement and the Michigan Achievement Skills Scholarship into law.

Sen. Sarah Anthony, D-Lansing, chair of the Senate Appropriations Committee and bill sponsor, said codifying the scholarships into law sends the message to students that they are valued.

“These have always been introduced and championed in a bipartisan manner,” Anthony said. “In this very partisan environment, these types of bills have always been championed on both sides of the aisle because they mean so much to so many students and families across the state.”

Brandy Johnson, president of the Michigan Community College Association, spoke in support of the bills.

“Institutions need stability to build and sustain programs and employers need confidence that Michigan is committed to developing a consistent and reliable talent pipeline,” she said. “Putting these scholarships into statute ensures they remain a long-term investment in our state’s future.”

Johnson also asked that the state expand the Michigan Achievement Scholarship to adult learners.

Steve Little from Business Leaders for Michigan also spoke about the importance of the scholarships.

“Success in our economy today requires skills and learning that go beyond high school, whether that’s at an academic institution or work in skilled trades,” he said. “These bills will help continue progress towards the 60 by 30 goal of 60% of Michiganders with a post secondar credential by 2030. … We also think it’s important by codifying these two scholarship programs that we help ensure that education reforms are systematic, scalable and enduring, not one-off projects or short-lived mandates.”

In the House Appropriations Higher Education and Community Colleges Subcommittee, the Michigan Achievement Scholarship was also front-of-mind for several of Michigan’s independent colleges that were there to testify.

Jackie Spicer with Baker College advocated for the expansion of the Michigan Achievement Scholarship. Currently, the scholarship is only available to students enrolling within 15 months of graduation and attending school full-time.

“The sunset of the Michigan Tuition Grant has created a significant gap for others, particularly adult learners and part time students,” she said. “As a result, many financially vulnerable students – those balancing work, family and education, no longer qualify for state support.”

People representing Albion College and Hope College also spoke before the subcommittee.

Matt Scogin, president of Hope College, advocated for protecting and expanding the Michigan Achievement Scholarship. Scogin asked that the scholarship be extended to people in the school’s prison program.

Richard Ray, chair of the steering committee for the Michigan Consortium for Higher Education in Prison, also testified before the committee. He also asked that the Michigan Achievement Scholarship be extended to incarcerated students.

“I’m told if it was taken advantage of by the incarcerated bachelor’s degree seeking students who are in prison right now, it would cost the state less than a million dollars,” he said. “In a program that’s already been funded at $560 million, I think that’s a kind of rounding error.”

Ray also asked for the Michigan Reconnect program to be expanded to incarcerated students and that, in the Department of Corrections budget, funding be maintained for higher education.

The House Appropriations Committee also reported HB 4551, which would transfer the Michigan Commission on Law Enforcement Standards to be overseen by LARA rather than Michigan State Police. Additionally, the House Appropriations Committee heard testimony on HB 5504, HB 5505, and HB 5663, which would create a state digital service office within the Department of Technology, Management, and Budget.

Stricter regulations governing social media access for minors were passed Wednesday by the Senate with some bipartisan support following divided testimony over whether the proposed changes would effectively address a problem driving mental health issues among children.

Those supportive of the package said it would help rein in social media addiction among youths, but Republican opponents called the legislation a half-measure.

Sen. Kevin Hertel, D-Saint Clair Shores, urged support of the four-bill package of which he was one of the lead sponsors.

Hertel spoke of an event he held in his district focused on online safety of minors. He said parents shared stories of children who were distracted at school, dealing with anxiety and mental health issues and at least one incident of a child taking their life due to their use of social media.

“What we are facing is a public health crisis affecting the mental and emotional well-being of an entire generation,” Hertel said. “Right now, parents are being asked to play that battle without the tools that they need.”

Each of the four bills passed by votes of 20-17, with two Republicans, Sen. Mark Huizenga of Walker and Sen. Ed McBroom, R-Vulcan, voting in support while one Democrat, Sen. Rosemary Bayer of West Bloomfield Township, voted against the bills.

The first bill in the package, SB 757, would create a Stop Addictive Feeds Exploitation for Kids Act, which is intended to ban social media platforms from pushing addictive, data-driven feeds to minors without parental approval. It would also ban social media platforms from sending notifications to minors during the evening hours and during certain weekday daytime hours during the months that schools are in session.

Two further bills, SB 758 and SB 759, would beef up data privacy protection for minors.

The final bill, SB 760, would create a Leading Ethical AI Development for Kids Act. This would block minors from accessing AI chatbots. The intent is to prevent access to AI chats that direct minors toward illegal activities, consumption of drugs or alcohol, violence, or sexually explicit interactions.

Republicans who opposed the bills contended that Democrats had pushed the bills without buy-in or collaboration with GOP lawmakers.

Sen. Jonathan Lindsey, R-Coldwater, said he believed the bills were being pushed by Democrats to score political points.

“There’s bipartisan work being done on this issue, and there’s tons of opportunity to collaborate,” Lindsey said. “Instead, what we see is the majority in this chamber deciding to put politics ahead of actually fixing problems for our kids.”

Senate Minority Leader Aric Nesbitt, R-Porter Township, said the bills do not truly protect children. He said the Democrats were rushing the bills through without collaboration.

Prior to the vote, Nesbitt attempted to offer an amendment that he said would have enacted a ban on social media access to minors under age 16. It was rejected from being considered by Democrats, who said it was not germane due to being a rewritten version of the bill with a new title.

“This is an epidemic, but unlike some epidemics, we know exactly how to stop it,” Nesbitt said. “The question is whether we have the guts to do so. Unfortunately, the bills before us today do not. They’re more press releases than policy.”

Nesbitt said the source of the problem for young people must be cut off, not addressed through half-measures, which he said the bills would do.

Following the votes, Sen. Dayna Polehanki, D-Livonia, told reporters that the proposed Nesbitt ban was not possible, like a similar social media ban enacted in Australia, because the United States has the First Amendment.

“This bill package goes as far as we can go without violating First Amendment rights,” Polehanki said.

Sen. Darrin Camilleri, D-Trenton, told reporters the changes were needed because there are no federal laws in place to rein in large technology companies from targeting minors when it comes to social media.

“We’re proud that we’re doing something to protect our children, because we know that just like so many parents across the country, we are dealing with the ramifications of a social media world that none of us grew up with,” Camilleri said.