Efforts to repeal the tuition tax credit received a reviving breath Thursday.
The state House Appropriations Committee approved a substitute bill that would refund about $27 million to in-state university students. MSU students taking 15 credits would receive an $82 refund per semester this year.
The new bill excludes out-of-state students from receiving the refund, adding more money for in-state students. MSU’s total share of the $27 million will decreases from about $5.3 to $4.9 million in the new bill.
Ryan Kumpf, an out-of-state fisheries and wildlife senior, said he understands why in-state residents would get the refund, but he’s still disappointed.
“Of course I’m not thrilled by it, but I can see the logic behind it,” the Illinois native said. “Obviously, out-of-state students are paying more.
“If it is coming from Michigan, from state taxpayers, I can see why it is going to nonresident students.”
And some state lawmakers say they are pleased, although they preferred the original bill.
“This is better than nothing,” said state Rep. Gretchen Whitmer, D-East Lansing. “Considering how people have been flip-flopping on votes, there was no guarantee anything would come out of committee today.”
Whitmer was hopeful the committee would have approved the old bill, which could have been hurried through the House floor to Gov. John Engler. The substitute bill will slow down the process, and Whitmer said she wanted it passed before Tuesday’s revenue estimating conference. If the bill is approved on the House floor, it will need agreement in conference committee, then the Senate and House, before Engler.
“I am disappointed that we weren’t able to get it done today,” she said. “The sooner we get this to the House floor, the more likely this will come to fruition.”
The Appropriations Committee approved the bill 18-11. Members met in a work group Wednesday to discuss alternatives to the original bill, which didn’t receive enough support in a subcommittee.
“It was a lively debate,” said Todd Harcek, a spokesman for state Rep. Marc Shulman, R-West Bloomfield, who is the committee chairman. “It exposed the variety and range of views that members have on this issue.
“The overall feeling was that there wasn’t a way to make everyone happy.”
Gov. John Engler maintains he will support legislation to repeal the credit.
“The tax credit has been found to be ineffective,” said Matt Resch, a spokesman for Engler. “It is a program that doesn’t work, so that is why we are looking to repeal it.”
The credit was designed to serve as an incentive for state schools to keep tuition down, but few schools have qualified.
If the credit is repealed, the money could be used to refund students who experienced tuition increases this school year. MSU raised tuition 8.9 percent.
MSU President M. Peter McPherson had reservations with the guidelines placed upon the repeal of the tuition tax credit.
“It did pass, but note that it is only applicable for in-state students, we wished it to be for all students,” he said. “It is most important that (the repeal) moves forward, but this is a problem.”
McPherson said the university will wait to see what is signed into law before determining how tuition will be adjusted.
MSU Trustee David Porteous said he was pleased to see the bill move forward, even though out-of-state students aren’t in line to collect anymore.
“The critical issue is repealing the tuition tax credit and this legislation does it,” he said. “If ultimately it means that some of our students from out-of-state don’t get a refund, be it for the greater good, I am satisfied with it.”
Marketing sophomore Angeli Kakade, an out-of-state student, said it isn’t her money to begin with, so she doesn‘t feel cheated.
“I came here knowing that my parents don’t pay Michigan taxes,” the Minnesota resident said. “So I think it makes sense.
“Going out-of-state, you’ll pay more, no matter where you go.”
