Budget & Taxes

HB 4170 permanently sets Michigan's individual income tax rate at 4.05% for all taxpayers, replacing a temporary 4.25% rate scheduled to take effect in 2024. It creates a mechanism where the rate could decrease further if state revenue growth exceeds inflation, requiring annual revenue reviews. The bill directly affects all Michigan residents who pay individual income tax. The change takes effect immediately for tax years beginning January 1, 2025, with the 4.05% rate now permanent unless triggered by the revenue growth condition.

HB 4162 allocates $17.77 billion in state and federal funds for Michigan's K-12 public schools for the 2025-2026 fiscal year, primarily from the state school aid fund and other designated trust funds. It sets a new target per-student funding level of $10,025 and establishes a formula to calculate each school district's foundation allowance based on the previous year's funding, inflation (using the Consumer Price Index), and the target amount. School districts with funding below the target receive adjusted increases, while those above the target see smaller raises tied to inflation. The bill directly affects all public school districts by determining their state funding allocation through this updated formula.