Lt. Gov. Gilchrist kicks off statewide retirement tax repeal tour – The Macomb Daily
Larry Reichle of Sterling Heights spent 38 years working for the Ford Motor Company before deciding to retire, along with his wife, who worked at Ford almost as long as he did.
They planned for their retirement.
But shortly after leaving the workforce and becoming retirees a pension tax was enacted by Gov. Rick Snyder to help fill a $930 million budget shortfall created by other state cuts.
“We had no warning. No idea that we were going to be penalized for retiring and no chance to change our mind,” said Reichle, who was among the retirees who gathered at UAW Local Union 400 Region 1 in Warren on Monday to hear what Lt. Garlin Gilchrist II had to say about the tax being repealed.
“Starting this year retirees will see a difference,” said Gilchrist, during the first stop in a statewide tour highlighting the roll back of the retirement tax.
He is encouraging retirees to take advantage of savings in upcoming tax filings.
Signed last March, the Lowering MI Costs plan rolls back the retirement tax and increases the working families tax credit. The bill, signed into law last month, amends the Income Tax Act to phase out the retirement tax over the next four years.
Although the repeal is good news, seniors were hoping for more.
“They’re offering crumbs,” said Reichle, who, like many of the seniors in attendance, was hoping to see the tax end immediately instead of in phases over the next four years. “If it was wrong, it was wrong; just get rid of it.”
Macomb County Executive Mark Hackel, who was among those in attendance, said he doesn’t blame seniors for being upset.
“They’re facing huge increases in the cost of living,” said Hackel.
Sheila Cote concurred.
“The repeal of the retirement tax will benefit our seniors and community as a whole. The cost of living has increased and those on a fixed income (seniors) are struggling to make ends meet. Older retired individuals have worked hard throughout their lives to ensure security in their later years. They deserve to live in comfort without financial stress. This is what we all plan for,” said the director of the office of senior services for Macomb County. “It is heartbreaking to hear from seniors who cannot afford prescriptions or groceries. These are individuals who worked, sacrificed and saved for their futures. Nearly 18% of the population in Macomb County is 65 and older. It is in the best interest to support older individuals so they can continue to contribute to the economy, reside in their homes and enjoy the life they made in our community.”
When asked why it cannot be done immediately Gilchrist said he understands the question. However, while it’s easy to break things, fixing something takes a little more time.
“This gives us an opportunity to fix it right and to backfill the revenue that was generated by the tax,” said Gilchrist, who stopped several times on his way to the podium, to talk with seniors or pose for selfies.
Among those who were anxious to hear what he had to say was Ruthie Stevenson, 77, of Mount Clemens.
“I’m hearing a lot of different things,” said Stevenson, past president of the Macomb County NAACP chapter who retired from Ford Motor Company after 40 years, eight months and seven days. “I wanted to hear exactly what is going to happen.”
The proposal would replace, on average, $1,000 a year taken from the pockets of 500,000 Michigan households by exempting public pensions and restoring deductions for private retirement income, including private-sector pensions, withdrawals from individual retirement accounts (IRAs), and the portion of a 401K account subject to an employer match.
“I’m hoping the little bit that we’ve been able to put back in your pocket is helpful,” said state Sen. Veronica Klinefelt, who was among the legislators in attendance for the event.
