Tax Attic

Jerry Coon

Last Monday, as a member of the Rockford City Council, I had the privilege to attend the final regular Council meeting for Councilwoman Mary Eadie and Councilman Rich Mol. Both Rich and Mary decided not to run for re-election in the coming election. Mary has served for 32 years and Rich has served for over 8 years. I have known both of them for many years and have served on the Council with both of these fine individuals for the past 2 years. In recognition of Mary’s 32 years and the many firsts held by Mary, such as Rockford’s first female Mayor, Kent County had declared Monday, October 8 as “Mary Eadie Day”. That was a very nice honor. No day was named for Rich, but as a Rockford resident, he has all of our heart-felt thanks for serving us for 8 plus years. Thanks Rich and Mary.

Speaking of elections, we will be voting on six proposals next month. Five of these proposals would amend our Constitution with the sixth asking us to approve or reject Public Act 4. Next week, I will give my opinion on that proposal but this week let’s take a look at Proposal 2012-06 proposing to institute a vote requirement before the State of Michigan constructs a new international bridge or tunnel for motor vehicles. Since 2000, Ontario and Michigan have been working on a solution to more efficiently move products and people from Southeast Michigan to Southwest Ontario. In 2004, they came to an agreement to solve the problem by building a new bridge originally called the Detroit River International Crossing and now called the New International Trade Crossing (NITC). The NITC would connect Detroit and Windsor and would provide a direct route via our I-75 to the Canadian’s Highway 401 through Detroit and Windsor. That freeway to freeway route doesn’t exist today. The NITC would be located about 2 miles south of the privately-owned existing Ambassador Bridge. This does not please the owners of the Ambassador Bridge, the Moroun family. In fact, they are so dis-pleased that they have chosen to fund, almost exclusively, Proposal 6, spending millions in the process. In 2009, the United States Federal Highway Administration, Transport Canada, and the Ontario Ministry of Transportation gave their final environmental clearances. The total project cost was estimated to be $3.6 billion. This figure includes $1.4 billion to bring the 401right to the NITC and $550 million for Michigan’s portion of the project. In 2010, the Canadians offered to pay Michigan’s $550 million and not ask for repayment. The $550 million as well as the Canadian’s costs will be recovered via the tolls collected. The fact that the Canadians are so sure they will recover the $3.6 billion of costs through tolls might tell you why the Morouns are so upset. Spending a few million to protect several billion makes sense. In any event, our legislature could not reach agreement to approve the NITC and accept the Canadian’s offer so in June, 2012 Governor Snyder signed a Crossing Agreement to build the NITC, side-stepping the legislature, as long as Michigan had to pay nothing for the project. The operative word in the entire proceeding sentence is “nothing”. The sources I have read all say that Michigan, by contract, will pay no part of the $3.6 billion and no part of the $550 million. A recent article in the Grand Rapids Press quoted Ray Norton, Canada’s Consulate General, as stating that the Canadian government is insulted by Proposal 6. After all, Ontario and Michigan have a written contract that holds Michigan harmless. If it’s in writing, I believe it. If I see it on TV, especially this time of year, I’m not so apt to believe it. I would have a hard time voting in favor of Proposal 6.

I have been going over the changes that Michigan made to our tax system for this year. They substantially changed the taxability of pension and the calculation of the Homestead Property Tax Credit. They also eliminated the refundable tax credits such as the City Income Tax paid credit, the homeless shelter/food bank credit, and the public TV/radio/colleges credit. In addition, they eliminated the extra personal exemption amounts for children and seniors. Given all of the changes made, it should be a very interesting tax year for tax professionals as they discuss the results of tax returns with their clients. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent and a

Registered Tax Return Preparer.

He owns Action Tax Service on

Northland Dr in Rockford.

Contact Jerry through his website

ºat www.actiontaxservice.com.

 

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