There's a plan to eliminate the state property tax.

And here to pitch that plan is Karla Wagner, who is leading the effort.

She's also running for governor as a Republican.

Welcome back to OTR, where our lead story is: What's new on the budget?

Providing the analysis Chuck Stokes, Clara Hendrickson and Craig Mauger sit in with us as we get the inside out.

Off the Record.

Production of Off the Record is made possible in part by Bellwethe Public Relations, a full service strategic communications agenc partnering with clients through public relations, digital marketing and issue advocacy.

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And now this edition of Off the Record with Tim Skubick.

Thank you much Welcome to Studio C another edition of Off the record and another show on the budget or not as this case may be We're closer than I'd like to be already.

The budget deadline is October 1st.

It was six months ago in the dead of winter that the governor presented her new state budget and she's still waiting for it to be completed.

No deal yet, but there's plenty of talking going on.

You don't necessarily see it, but there' a lot of conversation going on.

But the budget clock is ticking towards tha deadline and government shutdown hangs over all of the conversations.

And if the Democrats cannot get their act together, then we're we're really facin a potential government shutdown.

The talking is also going on in the Oval Office with the governor making her third visit and spending one hour with the president asking him to adjust the auto industry, damaging tariffs and pleading for a modification to health care cuts for the needy.

What that's going to mean in terms of hardship for Michiganders and people who just want to get access to care.

Meanwhile educators have told the governor not to link a road deal to state aid.

One goes with the other.

The governor says she's not backing down.

So 49 days to a deal or a shutdown.

And the clock is ticking.

Mr. Mauger, you did a deep dive into this thing.

And so what did you come up with?

I mean, I think our state's leaders are in a extremely difficult situation here.

And they've put themselves there.

They've waited so late into the process to start really negotiating.

The state doesn't have the type of money it did a few years ago to give everything everybody, everything that they want.

And now everyone's expectin to get everything that they want because they've been getting it for the last four years.

That's how it is.

I mean, when you have.

Silly Peopl and you have the House speaker who is promising an income tax, promising $3 billion more for roads without showing where he's going to get the money.

Killed the income tax thing.

Now he's killing the income tax.

He still hasn't explained where the $3 billion for roads is going to come from.

All right.

You look at the budget, the state is facing cuts from the federal level possibly a billion dollar hole.

There's more and more money that lawmakers want to see go into schools to try to turn around what's happening there.

You can't do everything.

And how do they bridge the gaps between all of these desires?

But everybody in this town went gaga this week when the Senate finally showed up and did something.

Well, and Senate majority leader, Winnie Brinks said that she's not met one on one with Michigan House Speaker Matt Hall in a month, which is significant given that they blew past this July one deadline for passing a budget.

And like Craig said, this is a this is a complicated puzzle here.

This can't just be a status quo budget.

There are fiscal constraints as a result of wha the federal government has done with some of that having serious fiscal impact on Michigan.

And then you have roads in the mix.

I mean, it's not clea that anything is really change when it comes to these budget negotiation since they were talking in July.

Really, it seems to just be that Matt Hall has sort of changed his tune on the income tax cut, but he is still looking for tax cuts, saying he kind of wants to amplify what was in the one big beautiful bill act.

Yeah, and you do you just have to wonder who's going to blink first or will anyone blink and both sides are doing standoff.

There's some reminiscent here to when Governor Granholm was in office.

And we saw tough times and we saw that's going into way past October on to be able to get things done.

We're within a month or so of this and it doesn't look good right now.

I'm not sure who has the upper hand.

Part of this is obviously the fact that they know that Governor Whitmer is, quote unquote, a lame duck governor is getting towards the end of her terms.

They don't have to deal with her another four years.

So who's going to blink?

And this is our I mean, I think some Senate Democrats made a really good point this week in saying that the impacts of this standoff are already hitting people in the state.

We can't say, hey, the deadline is still 50 days away, less than 50 days away.

That's when the impacts are going to come.

No, they're already happening and people need to be aware of that.

School districts had to make decisions about how many kids were going to be in each classroom.

A few weeks ago.

They had to make decisions about how they were going to allocate the money that they think they're going to have.

They don't know how much money they're going to have.

Are they going to provide free lunches and breakfasts to their students?

They had to make that decision without the specifics from state lawmakers, because state lawmakers did not meet their own deadline here.

And this is no way to run a responsible government.

And you can't... Oh Chuck.

And you can't say they don't know how to do it because Governor Whitmer, They do know how to do it.

No they don't know they do it.

And Governor Whitmer has proven that she's gotten all of her budgets done on time.

So it's not like she's new to the process.

She knows what needs to be done and the amount of time.

The difference now is that she doesn't control all branches of the government anymore.

And she has a strong leadership over on the Republican side, on the House side with Speaker Hall, and he's exerting his muscle and saying, you don't get everything rubberstamped here.

Do you, Mr. Hall has been playing this note, not very loud, but it's it's audible that the Senate Democrats have problems with their Democratic governor.

Well he has repeatedly suggested that Governor Governor Whitmer in Hampshire just negotiate the budget together.

And Democratic lawmakers should get on board with whatever they decide.

I mean, it is pretty fascinating to look at the stark contrast that the two of them have been able to move this agenda in Washington, DC, working with President Trump's administration.

Selfridge, the Asian Carp protection, the disaster declaration up north and Hall has cited those policy wins as an example of, Hey, I can get bipartisan policy done in working with Governor Whitmer.

But then you look at this divided government in Lansing, and it's been unproductive.

They've not been able to move much legislation.

At the same time, they have kind of proven themselves capable of working up until the last minute.

That's what they did wit minimum wage and the sick leave.

And so the question is can they make that happen again when it comes to this budget?

I mean, it's fascinating to watch this because it's all happening, I guess, behind the scenes or nothing's happening.

I love the governor's line.

You might necessaril not see it.

Oh, yeah.

She said.

Don't worry about the deadline, Oh okay.

All right.

We'll take your word Gov.

And then you have, as she says, hey, there' lots of conversations happening.

And then a couple minutes later, the Senate majority leader says, I haven't spoken spoken possibly to the House speaker in at least a month.

And he keeps saying that you guys keep writing this story.

We're not talking, but we are talking.

Well, he often says he's not answering the question.

He just says we're meeting more than you think.

Yes.

Okay.

What does that mean then?

That' not an answer to the question.

Well, Winnie Brinks the Senate Democratic leader did address this issue in the news conference, basically said tha all governors of the same party and the same party in the Senate have difficulties along the way.

There's nothing new, is there?

Nothing to look at?

I mean, Rick Snyder and Arlan Meekhof, they were not always the best of friends And Randy Richardville.

Exactly.

So that's not unusual.

And this idea that, oh, if you just cut out one of the three legs of the stool, we can get this deal done.

That's not how it works.

Yeah.

Mr. Hall wants to go to a unicameral legislatur just for the sake of the budget.

And that's one other point on this.

That's illegal.

By the way.

One other point on this that I want to make, and I think this hasn't got the attention that other things have.

The House Republicans are setting up a budget right now from what they have put out there.

They're movin more than $1 Billion from school aid money that would essentially normally go to K-12 schools.

They're giving it to universities so they can free up general fund money likely to put to roads to get to that 3 billion.

Governo Whitmer has a long track record of past public statement saying this is not a good idea.

So that's that's the other thing where does she stand.

Go all the way back to Rick Snyder.

Remember Snyder started this thing.

Yes and she was on the Senate floor.

There's a video of this.

We've linked to it recently where she is just bashing the flow of money from school aid to kind of shuffle to get dollars available for roads.

So what is what is the relationship between all three of these people right now?

We have no idea.

And you got to wonder, how much pressure are they getting from outside?

Are they getting from the education community?

Are they getting from peopl and organizations and businesses heavily invested in road construction?

There are multiple jobs that are tied to these two industries.

And we're getting warnings now that if things come to a standstill, we're going to ge a whole lot of people laid off.

Well, the education lobby had a good gig a couple of weeks ago where they said concrete over kids.

Okay, roads are for kids which I thought was a good line.

They did not mention in that news conference the person who most strongly supporting that is who?

Governor Whitmer and Matt Hall, It's how shel got into office almost eight years ago.

Yeah, exactly.

So we'll see.

I think in the end they do come up with something.

Okay.

I think this is just a dance that's going on.

And the bad news is the band's an off key.

How much do you think they give for roads, Tim?

I'm curious, how much money do you thin they ultimately get for roads?

I think they reduced the number to $2 billion and say and go home.

They don't have to do 3 billion.

Yeah, The governor keeps saying we're not doing a budget without a road.

Exactly.

But that doesn't mean 3 billion.

It could mean much less.

I told you two weeks ago that eventually going to lower the target and declare victory.

They've claimed that many times in this town.

But, you know if you can't reach the mountain, go halfway and the people a home won't know the difference.

Probably true.

Unless we tell them.

And of course, nobody pay attention to us anymore anyway.

All right.

Let's talk about Matt Hall.

Near the end of the program last week, I asked a very simple question Do you support eliminating the property tax?

He said, No, I don't.

And by the way, I'm going to propos after we're done with the budget and my words, assuming there is one.

Okay.

And he wants to revisit Headlee, he wants to revisit Proposal A to do property tax relief.

Chuck, you've been around long enough to know that that Poppy took 30 years to be resolved in a legislature of seasoned veterans trying to get it done.

Your take on this?

During the time when they didn't have term limitation exactly.

And and leaders of respective committees had a tremendous amount of power.

You're right.

It took a long time to get that done.

If Dick Headlee were here today.

He would tell you how long it took to get done.

I think we're in for a really tough battle, and I think we're going to see some interesting ballot initiatives coming up in 2026.

And I don't think the education community wants to go back to that by any way.

Well, it's a roll of the dice when you say to a local government run school which depend on Proposal eight and the Headlee Amendment and all stuff, we're going to revisit that?

All of the bean counters are saying, Whoa, now what?

Yeah, but it's an exampl of how the House speaker has so I think smartly trie to continue to set the agenda.

If we get done with this issue, Here's next, this is what we're going to work on next.

Then everyone starts responding to what's next.

And what do you hear from the Senate about what their agenda is going to be?

Crickets.

We're not hearing what they want to do to drive policy.

They won these seats.

They control the chamber.

What is it that they want to accomplish after they do the budget?

They have not said.

The interesting wrinkle in this story besides doing that is that if there are two competing property tax issues on the ballot at the same time our guest, we're going to talk to wants to get rid of it all together.

And then he's got this hybrid thing.

What do the people do?

It's going to be complicated and we're going to have all of these other ballot proposals potentially.

And the more you start putting on this ballot, the more the risk is for the supporters of these proposals that someon just says vote no on all of it.

Well, let's not lose sight of the fact that the part of the I think and he never addressed this issue.

Mr.

Halls, it's an election year and Republicans put on the ballot a property tax relief plan.

What are the Democrats to do?

Does the governor endorse it?

Do the Democrats say this is a political ploy?

Vote no on giving yourself money back?

Clara?

It's it's not clear.

I mean, I think so much of it depends on what else is going to be on the ballot.

But, I mean, at this point something so complicated and has sort of been in place for so long, there are vested interests not saying that everyone is happy with the status quo.

You know, I get calls from seniors who say I've been in my house for a really long time.

I want to move, be clos to my grandkids on my property.

Taxes are going to go up.

How is that happening?

I mean, there are people who are frustrated, but that doesn't necessarily mean that there is a political appetite among the electorate to completely overhaul what has been in place for a long time now.

well, let's take that Segway and call in our guest now Karla Wagne on the west side of the state.

Miss Wagner, welcome to Off the Record.

So nice to have you on board.

Let's start with the obvious question, which is if there are two competing property tax proposals on the ballot, one for Mr. Hall at all in yours does that help you or hurt you?

I don't know, to be honest with you, I haven't really looked into his to see what it has, what how it differ on his differs from ours.

So well, it's not complet elimination of the property tax.

Let's start there and work backwards.

Well.

Yep.

All I can say is that for the last four years I've been cris crossing the state of Michigan.

I've got 40,000 more miles on my truck listening to what the people have to say.

And everyone is telling me that total elimination property taxes is the need.

So I'm not sure who Mr. Hall is talking to or if he's just looking at the numbers from the Lansing side of it.

I'm looking at it from the side of the people paying the property taxes.

Just a real quick question.

How do you pay and replace the revenue that you would take away?

You have said publicly that there's enough money in the state budget, but that is one time money.

And after the first year, if you use stood up, then how do you pay for it?

Well, you know, in a nutshell, you know, six years ago in 2019 I think our state was spending 58 and a half billio and now we're over 83 billion.

And we haven't even fixed the roads yet.

Where where I want to answer o where all that money has gone.

Where where has that money gone?

And why is it that the property tax payers are carrying the burden of making up that extra amount of money?

So there's multiple ways and it's a little bit like what they're doing in Lansing.

The House Republicans are writing a new budget and what they're doing is they're moving monies from one bucket to another to to fill a bucket, take money from here and put it there.

Basically exactly the same thing that we're trying to do with the axe my tax proposal.

It's not that we don't want to pay for some services, especially the essential services.

We just want to pay them a the risk of losing our property.

There's multipl other ways that that can be done and it should not be at the risk of people losing their homes their farms or their businesses.

Everyone talks about our economic decline here in Michigan.

Everyone talks about making Michigan the number one manufacturing state again in the United States.

That will never happen with property taxes.

We're losing people in businesses out of the state left and right.

Why?

Because it's too expensiv to do business here.

Mr. Mauger.

My question to you would be without property taxes, How would you fund any improvements to school buildings under your proposal?

I think what I want to address, number one is that we have a declining enrollment in public schools.

So if th if the enrollment is declining, why are we building more schools?

Why?

Why?

Because that doesn't have anything to do with the age of the building.

I mean, if you're losing kids.

But think about think about buildings in Europe.

They're way, way older than what these buildings are here.

So are you telling me that a 30 or 40 or a 50 year old building here in Michigan is built so badly that tells me the government shouldn't be involved in building?

What building in Europe are you referring to?

I never think of any think o any of the buildings in Europe.

They're hundreds of years old.

They're hundreds of years old, and they make them work.

We build buildings here, and then 20 years or 30 years later, we say, Oh that needs to be a new building.

I don't think so.

And you know what?

Buildings don't educate the kids my mom and dad were when I went in.

They they were educated in a one room schoolhouse up until the sixth grade.

And then they went into a junior high and high school after that.

And they're smarter than whips.

I'm just saying the decline in public school enrollment, there's more and more kids tha are going to Christian school, private schools, charter schools and are being homeschooled.

And yet we are funding the public school fund as though those kids are still going there.

When you have Christian and private schools that can fund themselves on tuition and donations and no state money, there's no reason why the state can't tighten their belts or the schools have to tighten their belt.

You also understand that the more pressure you put on the property taxpayers, what's happening to millage as they're turning them down, they're going to turn them down anyway.

So unless you create a different revenue stream to provide for those monies, the millages are going to are going to get turned down left and right.

And then where are they going to get the money?

Then for those school improvements because people are just done with property taxes.

Yeah.

So under your plan, I mean, this is taking away the main tool that local governments use to raise revenue.

It's about a $15 billion hole in collectively in local government revenue.

Michigan doesn't let local government impose a sales tax or an income tax outside of cities.

Would you like to see either of those things changed to address this issue that you're raising around?

How do local governments.

Absolutely.

So you talk about a $15 billion hole.

What is President Trump teaching us?

And at the low at the federal level, how much waste is there?

So if there's trillions of dollars of waste at the federal level, there's billions of dollars of waste at the state level, millions of dollars of wast at the county level, hundreds of thousands of dollars of waste at the township level.

Let's address the waste.

I don't want to replace waste.

Okay.

And I think there' a lot of things on our property tax bills that should be paid by consumption.

In fact, where I live, I'm paying for a zoo and a museum I've never set foot in.

But you also pay for those things at the door admission.

If you're paying for them through admission, why am I paying for them on my property tax bill?

Anything on your property tax bill that should be paid by the consumer should be paid by the consumer.

Zoos, museums, libraries, transit, whatever.

Let them be paid by the consumer because if that consumer is not paying thousands of dollars in property taxes, they can certainly afford to g to the zoo once every two years or once every three years and pay th pay the admission at the door.

We also can look at look, we are providing funding with our petition.

It funds the essential services, which is what the government is supposed to provide us police, fire, emergency services, road commission, elections those types of things that are tied to life, liberty pursuit of happiness, happiness.

Our government is supposed to protect our liberties, protect our property, protect our rights.

That is what they are supposed to do.

So essential services protect those rights.

That is what we should be paying for.

We just don't want to pay for them at the expense of losing our property.

And we also don't want to lose our property because people in Lansing don't know how to budget or spend money wisely.

We've all seen it.

There's so much waste in Lansing, it's ridiculous.

Miss Wagner, let me take you back a little bit.

June 2023.

I interviewed you and I aske the question, Can you hear me?

I asked the question.

I said, Are you running for political office?

You said, quote, I am not.

I said, are you using this your campaign for the ballot proposal to raise your name recognition, to run for political office?

You said, no, no.

What changed in that period of time?

Absolutely.

I'll tell you, because as soon as I saw you sitting there, I thought, he' going to ask me that question.

He's going to happen to me because because you know, at that you know, things change, right?

Times have changed.

Things have changed.

And I was very naive.

I was very politically naive at that time when I had that conversation with you.

And in the meantime, since then, what I have realized through multiple, multiple conversations with people in Lansing, I have state reps and, senators that are 110% behind my tax.

In fact, they're telling me you have to do it, Karla.

You have to do it through the citizens, because we cannot do it.

There are legislators, there's a House rep and a senator that are trying to write property tax relief or reform bills, and they cannot get enough support from their own party to help.

And they keep pushing me.

You have to do it.

You have to do it.

Are you?

The more I have, the more I have those conversations, the more I see what is going on.

That is what was I had no inclination, no desir to run for a political office.

But when I listen to the people in the state of Michigan, like I said, all of those presentations, I get emails, I get text, I get phone calls every day, every day from people who are afraid of losing their property, their businesses.

I'm in business myself, have multiple connections with a lot of different arenas in industrial arenas, that kind of thing.

People are hurting so badly and they feel like they have no voice.

And for some reason I have become that voice because I started the Citizens Initiative petition.

They're looking at me to help them.

How do I go after all of th support that they have given me?

And when I look at Lansing, when I loo at the current administration, when I look at the other candidates that are running right now for office, property tax elimination is not on anyone's agenda.

It's not anyone's passion but mine, because I live it every day out her in the real world where we live, where the property taxpayer pay, which this is where we live and we are paying, we are electing and we are paying the salaries of those people and they have stopped listening to us.

They refuse to listen.

Mrs. Wagner I want to make sure that I understood what you said to Clara's question.

Did you say you would support a sales tax increase our income tax increase?

No, no.

Number one, why would we want to increase sales tax?

Let's stop the exemption of things.

We always write bills and then we write 200 exemptions or exceptions or exemptions to that bill.

Instead of increasing sales tax.

Let's stop exempting things first and see where that gets us.

Income tax, state income tax.

We have multiple candidates that want to run on income tax elimination, and then we have people that are worried about the counties losing local control.

Here's my here's my suggestion.

If we're going to lower the state income, lower the state income tax to one and a quarter, allow the counties to charge up to 2% income tax for their county, We have multiple cities tha already charge a 1% income tax.

You're still at four and a quarter.

Services are paid counties get their money.

They don't have to worry about losing control.

It can all be done.

People just need to sit down and actually address it.

But I unfortunately, I think there's a lot of people in Lansing that don't maybe not have an accounting background, maybe not a fiduciary background, Maybe don't understand budgets and how these things have to work together.

That's all right.

Sure.

Very quickly, if you get this ballot proposal voted on and approved by the people, we would be the first state to totally eliminate property tax.

Has it ever occur to you that maybe that's the fact that it hasn't been done anywhere else is because it's not a great idea?

Well, I see multiple states are working on it.

You know, Governor DeSantis is looking at property tax elimination of some sort.

I think.

And I and I'm not because I'm not sure if he's talking about the state portion of property tax or if he's talking abou the whole state's property tax.

We've seen governors in multiple states have done reform.

They have they've already don reform of their property taxes.

You know, every every state does They collect property taxes differently and they use their property taxes in different methods.

Alright Mrs. Wagner I have to jump in.

Can you stay for some over tim and continue the conversation?

Can you do that?

All right, great.

Okay.

Let's go to closed credits single back.

Go to wkar.org for more of ou conversation right after this.

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