MI: Whitmer signs bills allowing for Metro Detroit transit tax vote, optional hotel tax hike

Gov. Gretchen Whitmer has signed bills that would allow Metro Detroit communities to ask voters for tax increases to fund public transit and increase an optional tourism tax at hotels in the region.

The legislation was among 35 bills that Whitmer signed Friday following a lame duck rush of action in the House and Senate in November and December. Thirteen other bills were vetoed by the Democratic governor Friday.

"I am proud to sign these 35 commonsense bills that will lower costs for businesses, expand technical education for students, cut red tape, and so much more," Whitmer said in a statement Friday. "Together, we can help our young people thrive and make sure Michigan is the best state to start or grow your business."

'Opt-out' bill gets signed

State Rep. Alabas Farhat's bill would eliminate an "opt-out" provision that has previously allowed communities in Wayne and Oakland counties to opt out of votes on and participation in countywide transit programs.

The Dearborn Democrat's legislation, as initially introduced, would require the 17 Wayne County communities that currently opt out from the SMART bus system to participate in a vote with the rest of the county the next time the millage comes up for a vote. Currently, the millage rests at about 1 mill and will come up for a countywide renewal vote in 2026.

Among the largest communities in the county that have opted out are Livonia, Canton Township, Northville and Detroit, which has its own bus system.

The 17 communities are unlikely to overcome the general support from the rest of the county in an election, making it likely that those communities — some of which have opted out for nearly 40 years — would be opted into the tax and transit service.

While the legislation initially targeted Wayne County's opt-out provision, a last-minute change added Oakland County to the communities where the opt-out provision would be eliminated.

The legislation provides Oakland County with the ability to run transit through an authority in the future, when the county's transit millage expires in 2032 or earlier. The ability to move the millage to an authority would allow the county to take it off of its overall millage tally. A county's taxing capacity generally is capped at a certain ceiling and its proximity to that cap can sometimes be used to determine its bond rating.

Oakland County voters have not used the law creating a transit tax authority because of its allowances for opt out communities. Instead, Democratic leaders including County Executive Dave Coulter worked around the law in 2022 to pass a countywide millage that would be administered by the county, not a transit authority.

Hotel tax increase becomes law

State Rep. Tyrone Carter's bill would make amendments to the Convention and Tourism Marketing Act, which currently allows Visit Detroit, the travel and convention bureau in Wayne County, to assess up to 2% per room for lodging facilities with more than 35 guests. Hotels opt-in to pay the tax and receive advertising from Visit Detroit.

The Detroit Democrat's bill would increase the convention and tourism tax on hotel rooms in Wayne, Oakland and Macomb counties from 2% to 3% this year, then to 3.5% on Jan. 1, 2025, and 4% on Jan. 1, 2031.

The current rate generates about $18 million in tax revenue, according to a House Fiscal Agency analysis of the bill. Increases to the rate would result in about $900,000 in additional revenue for every 0.1 percentage point increase. In that sense, a 3.5% rate would increase revenue by about $13.5 million, to a total of $31.5 million.

Visit Detroit's tax rate is one of the lowest among comparably sized cities, Carter said. County executives from Wayne, Oakland and Macomb and the Detroit mayor were supportive of the change, Carter said Friday.

"Just imagine if it was in place right now with what the Lions are getting ready to do Saturday," Carter said, referring to the Detroit Lions' Saturday playoff game. "We’re a destination now and we are still the best dollar value when it comes to getting a hotel room. And it's not that often when you can get Wayne, Oakland, Macomb and Detroit to agree on something."

More: Lions vs. Commanders predictions: Can Detroit get back to the NFC title game?

Other bills signed

Whitmer signed the second of two bills that would exempt data centers from sales and use taxes. She signed the first of the bills last month.

Other legislation signed Friday would create the Office of the Tribal Legislative Liaison and allow Native American students to wear traditional regalia during school ceremonies, including graduation ceremonies. Another bill include legislation requiring public high schools to offer at least one computer science course.

Additional bills would require charter schools to post information about teachers' salaries and to give better access to the names of those authorizing and managing the schools. Sponsors of the bills argued they would bring transparency to the charter school system.

Other bills would expand print-on-demand ballot provisions — currently applicable only to early voting sites — to also include absentee ballots voted at a clerk's office, translated ballots or election day vote center. Another bill would prohibit an individual from serving on a canvassing board if he or she was convicted of certain election crimes.

Other bills from state Rep. Laurie Pohutsky, D- Livonia, would make the legal name change process easier for individuals seeking one, including those who are transgender or non-binary.

The bills would loosen rules surrounding name changes, including a requirement to provide fingerprints and a required presumption that a person seeking to change their name is doing so to hide a criminal record. A court still would be allowed to perform a background check but would do so at its own expense.

The legislation expands the reasons why a judge could waive publication requirements usually tied to a name change to include an affirmation of a person's gender identity, domestic violence, stalking or human trafficking. The bills also would eliminate requirements for a doctor’s affidavit of surgery to prove a sex change for a new birth certificate.

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