How Gretchen Whitmer Became An Outlier Among Democratic Governors

Twenty eight of the nation’s 50 governors are Republicans and 22 are Democrats. With 36 gubernatorial contests to be decided in the 2022 midterm elections, millions of dollars are now being spent by and on behalf of both parties to increase their gubernatorial ranks. A midwestern race that was previously thought to be uncompetitive is now, according to recent polls, tightening up and presenting a pickup opportunity for Republicans to gain control of another governor’s mansion.

As the 2022 election cycle enters the home stretch, Michigan Governor Gretchen Whitmer (D) finds herself on the defensive and with her challenger gaining ground less than 20 days before the final votes are cast. Whitmer’s Republican opponent in the November 8 general election, Tudor Dixon, has focused on Whitmer’s support for various tax increases in recent media interviews. Another point Dixon is hitting as part of her closing message is to highlight not just the tax increases for which Gretchen Whitmer has advocated, but also the tax relief from which Michiganders could be benefitting had Governor Whitmer not blocked it with her veto.

Vetoing Republican-passed tax cuts might not sound like an unusual move for a Democratic governor and historically it hasn’t been one. But these days Gretchen Whitmer’s rejection of legislatively approved state income tax relief makes her an outlier, even compared to her Democratic counterparts in other states and how they responded when similar tax relief packages hit their desks.

Acting in contrast to Whitmer are Wisconsin Governor Tony Evers (D), Louisiana Governor John Bel Edwards (D), and North Carolina Governor Roy Cooper (D), all of whom have signed significant income tax cuts passed by their GOP-led state legislatures over the past two years. Governor Edwards went so far as to support a package that could phase out Louisiana’s income tax in the coming years.

Gretchen Whitmer, meanwhile, has vetoed personal income tax cuts and other tax relief sent to her desk by the Republican-led Michigan House and Senate. This past summer on June 10, for example, Governor Whitmer vetoed a bill that would’ve reduced the personal income tax rate from 4.25% to 4.0%, increased the Earned Income Tax Credit, established a $500 child tax credit, and boosted tax breaks for disabled military veterans and seniors.

The tax cut that Whitmer vetoed in June would’ve resulted in a $2.7 billion annual net tax cut. While Whitmer blocked income tax relief for Michigan families and employers with her veto, on the campaign trail in nearby Wisconsin Governor Tony Evers is now touting the income tax cuts he signed last year, which were approved by the GOP-led Wisconsin Senate and Assembly.

Governor Roy Cooper signed a new budget last November that will phase out North Carolina’s corporate income tax entirely by the end of 2030. Four months after Cooper signed that corporate income tax-eliminating budget, Governor Whitmer vetoed legislation that would’ve cut Michigan’s corporate income tax rate from 6% to 3.9%. Five months after Whitmer vetoed that corporate tax cut, her Democratic counterpart in Pennsylvania, Governor Tom Wolf (D), was touting his signing of a bipartisan reform that will cut the Keystone State’s corporate income tax in half over time, taking it from 9.99% down to 4.99%. Governor Wolf’s office touted in an official release published August 8 that the move to a 4.99% corporate rate, which will be more than a full percentage point below Michigan’s rate, will give Pennsylvania “a healthier, more competitive business environment that attracts good-paying jobs and moves our economy forward.”

While Whitmer has responded to legislative Republicans with her own tax relief plan, sources in the Michigan political and public policy community contend Whitmer’s tax cut counterproposal is aimed more at helping her base of voters and not the broader public. Republican critics of Whitmer’s fiscal policy record and proposals acknowledge her campaign for re-election is based around conservative messaging. She’s running ads, for example, that tout her enactment of balanced budgets that did not include tax hikes. While Whitmer’s ads boast about not raising taxes, they leave out the fact that she tried to raise the gas tax but was blocked by the Republican-run legislature.

“Governor Whitmer has brought Republicans and Democrats together to deliver four balanced budgets that have made historic investments in Michigan’s public education system, infrastructure, public safety, and economy,” writes Joseph Costello, a Whitmer for Governor spokesperson, in an email responding to questions from this author. “The Governor has also gotten the state’s fiscal house in order by turning a projected $3 billion deficit into a $7 billion surplus, paying down billions in debt, and bringing the rainy day fund to an all-time high of nearly $1.6 billion – without raising taxes.”

While Governor Whitmer’s team says she has brought Republicans and Democrats together, it’s clear Republican leadership in the state legislature doesn’t see it that way.

“Governor Whitmer is a tax hiking, big spending liberal and the only reason Michigan taxpayers have been protected is because of legislative Republicans stopping her tax increases,” Michigan Senate President Pro Tempore Aric Nesbitt (R) told this author.

“If Governor Whitmer had had her way, gas would be 45 cents more and the small businesses who survived her shutdowns would be paying 40% higher taxes,” Senate President Nesbitt adds. “She has vetoed every inflation relief bill we’ve sent her, including suspending the gas tax, lowering the income tax and creating a child tax credit. Michigan voters are smarter than she gives them credit for and they know she’s prioritized government’s spending over relief for working families.”

“We’re in a state right now where she could offer tax relief. She’s been given the opportunity to offer people tax relief,” Tudor Dixon said of Whitmer’s record during an interview on the October 20 episode of the Ruthless variety program. She ran saying she wouldn’t increase taxes, but time and time again…when she has been given the opportunity to provide relief to the people of Michigan, she vetoes that every single time.”

In response to such criticism, Whitmer’s campaign points to the tax plan that Whitmer has offered as a counterproposal to the tax relief package approved this year by the Michigan House and Senate.

“Governor Whitmer has fought to lower costs and send real relief to hardworking families as quickly as possible by pushing to triple Michigan’s earned income tax credit, calling for a suspension of the state’s 6% sales tax on gas, and proposing a plan to immediately send $500 to families from the state’s surplus,” Costello adds. “The Governor continues fighting to fully repeal Michigan’s retirement tax, which would save half a million households an average of $1,000 annually.”

Republicans in the Michigan legislature, however, are not keen on Governor Whitmer’s counterproposal. Representative Matt Hall (R), who chairs the Michigan House Tax Policy Committee, called Whitmer’s planned rebate a “one time gimmick.”

“I don’t know if she will ever change her mind and allow hard-working taxpayers to keep more of their own money, but I do know House Republicans will continue to fight for tax relief and continue to give her the chance to finally do the right thing,” Representative Hall added. “This isn’t over.”

There are sure to be more state level efforts to enact rate reducing and flattening income tax relief in 2023. Not only that, such proposals will be introduced in states where there is unified partisan control and also in places where there is divided control of government. Nearby in Wisconsin, for example, Republican legislators are planning to introduce another income tax cut next year no matter who wins their gubernatorial election.

There is growing bipartisan support for income tax relief at the state level, demonstrably so, but Gretchen Whitmer has prevented Michigan from being part of that trend. Michigan state government is projected to have a $5 billion surplus over the next two years. As it stands, the state’s Democratic governor and Republican-run state legislature are in fierce disagreement over how much of that surplus to return to taxpayers and the manner in which to do so. On November 8, Michigan voters will decide whether they want Whitmer to retain the authority to continue blocking income tax relief for the next four years, or whether they prefer the Republican challenger who happens to be campaigning on the type of income tax relief that many of Whitmer’s Democratic counterparts in other states have recently enacted.