Michigan House Republicans
Rep. Hall plan protects small businesses from tax hikes after COVID-19 shutdowns
RELEASE|August 17, 2020
Contact: Matt Hall

State Rep. Matt Hall, of Marshall, today introduced a proposal which prevents local business owners from being required to pay higher taxes after Gov. Gretchen Whitmer used her emergency powers to shut down their businesses.

As COVID-19 started to spread throughout Michigan, Gov. Gretchen Whitmer issued executive orders which closed small businesses throughout the state. With no way to make a living following those orders, unemployed workers were paid from UIA’s trust fund – financed completely through state and federal unemployment insurance taxes.

At the start of COVID-19, Michigan’s Unemployment Insurance Trust Fund contained $3.9 billion – the third-highest total in the nation. But a surge in claims dropped the fund below $2.5 billion, automatically triggering a law which allows UIA to implement a tax increase for small businesses in the next calendar year to replenish the funds. Hall’s legislation temporarily would suspend the trigger when the fund falls during a statewide emergency that forces businesses to close.

“This is an extremely unfair position for our local businesses to be put in,” said Hall, of Marshall. “Many family businesses were struggling to get by during the shutdown because they were unable to generate income through no fault of their own. Some are still unfairly closed because of the governor’s orders when they have shown they can reopen safely and responsibly. Now they are being penalized further by being forced to contribute more of their hard-earned dollars.

“I find it concerning that UIA resorted to pursuing tax hikes when the agency also announced around the same time it had overpaid over $8 million in duplicate unemployment payments. UIA is also potentially liable for hundreds of millions of dollars in fraudulent payments. The agency should get its own affairs in order before reaching out to the backbone of our communities and local economies for more.”

Hall, who chairs the Joint Select Committee on the COVID-19 Pandemic, said recent testimony from UIA and local business owners raised concerns about the fund and spurred him to offer the needed protections within legislation. House Bill 6123 has been referred to the House Commerce and Tourism Committee for consideration.


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