Michigan GOP Hopefuls Push Income Tax Cuts in 3-Way Governor Debate

Q: With proposals to eliminate the income tax, which essential state services would face the most significant budget cuts in Michigan?

The biggest cuts would likely hit K-12 school funding and the state’s main operating budget for core services. Michigan’s 4.25% income tax is a major revenue source. According to Bob Schneider of the Citizens Research Council, eliminating it without replacing the money would require “large-scale reductions to state services,” especially in the School Aid Fund and the General Fund. Those two funds support much of what residents think of as essential state government. That means public schools would be among the most exposed, because the School Aid Fund helps finance K-12 education. The General Fund would also be under pressure, affecting services such as higher education support, public health programs, corrections, public safety, and other statewide operations. The candidates argued that spending cuts, efficiency gains, and eliminating waste could offset some of the loss. John James has said he would phase out the tax only after restructuring the budget and finding $3 billion in wasteful spending. Perry Johnson said he would not replace the lost revenue with new taxes. But the outside fiscal warning in the reporting is that, absent a replacement revenue source, the scale of the income-tax loss would be too large to absorb without deep service reductions. So, in practical budget terms, schools and the broad range of services paid through the General Fund would face the most significant risk.

3 articles · Updated · Detroit Free Press · Jul 9

Three Republican candidates for Michigan governor centered a Grand Rapids debate on affordability and education, with Mike Cox, John James and Perry Johnson all backing cuts to the state income tax.
Johnson also proposed property tax cuts, while Cox and James said they would repeal Michigan's 2040 100% clean-energy law to curb utility bills; none detailed how to offset lost revenue without cutting services.
James paired his economic pitch with a down-payment assistance pilot and a proposed Parents' Bill of Rights, while Cox attacked corporate job subsidies, hospital consolidation and teachers' unions as drivers of poor outcomes.
The exchange was more policy-focused than the prior night's attack-heavy debate, though personal clashes persisted, including Cox's criticism of James over his family's logistics business and James's sharp rebuttal.
The Aug. 4 primary will decide who advances to the Nov. 3 general election to replace term-limited Gov. Gretchen Whitmer; James enters with Donald Trump's endorsement.