Detroit City Wire

On June 27, the Michigan Board of Canvassers approved summary language for two significant ballot proposals that could impact the state's business environment.

The first proposal, "Invest in MI Kids," seeks to impose an additional 5% tax on annual taxable income over $500,000 for single filers and $1 million for joint filers. The revenue would be directed to the state school aid fund. This measure is seen as a substantial tax increase that could more than double the income tax rate for many job creators, including small businesses that pay taxes through individual income tax returns. The Chamber expressed concern, stating that this proposal could harm Michigan's economic competitiveness by altering the state's tax code. "While the language refers to a 'surcharge,' it is, in fact, a graduated income tax that would create a 9.25% bracket for many business owners," according to the Chamber, which plans to oppose this tax increase.

The Board also approved language for a referendum aimed at repealing Public Act 1 of 2025. This act established a gradual increase in the minimum wage and supported tipped employees through bipartisan compromise. The law was supported by the Detroit Regional Chamber and brought certainty to the restaurant and lodging industry after a Michigan Supreme Court ruling in 2024 threatened to eliminate the tipped wage.

Repealing PA 1 would lower the minimum wage from levels set by the public act; for instance, in 2026, it would decrease from $13.73 to $13.29. However, it would significantly raise wages for tipped workers, eventually aligning them with the full minimum wage by 2030.

The Chamber argues that repealing PA 1 could reintroduce uncertainty for the restaurant industry and undermine a bipartisan agreement. It urges members and the public not to sign petitions supporting this referendum.

Both ballot proposals will move to signature gathering across Michigan unless legally challenged further.