HispanicBusiness

Mary Ann Cleary, director of the House Fiscal Agency, also urged caution in an interview with the Free Press on Thursday.

"Both the School Aid Fund and the general fund are tight for 2014," Cleary said.

Cleary's immediate concern is House Bill 5696, which would change the way new and used cars and boats purchased from dealers would be taxed.

Instead of paying sales tax on the entire purchase amount, the buyer would pay sales tax on only the difference between the purchase value and the value of any car or boat used as a trade-in in making the purchase -- good news for the consumer, but bad news for state and local government's bottom line.

Though the bill would phase in the change, it's estimated to immediately cut state revenues by $117 million and local revenues by $9.5 million, according to Kahn's document.

An amended version of the bill passed the Senate 37-1 Wednesday night, with Kahn casting the only no vote.

A version in September passed the House, which would now have to concur with the Senate version before it can move on to Gov. Rick Snyder for his signature. House approval was still pending at press time Thursday.

The Senate amendment Wednesday, phasing the change in over 10 years, will soften the immediate impact, but it did not ease Kahn's concerns.

A longer term issue, Cleary said, is the planned elimination of the personal property tax on commercial and industrial office furniture and equipment, which passed the Senate on Wednesday and passed the House on Thursday. The bill needs to go back to the Senate for final approval.

That change can impact the state budget by hundreds of millions of dollars, with the major impact starting in fiscal year 2016, Cleary said.

State Rep. Jud Gilbert, R-Algonac, said he thought the phase-in of tax cuts over several years would help alleviate the potential for deficits.

"If it's just a monthly report, that's not a concern," he said. "But if revenues are way down for the year, then yes, that's a concern."

More Details: Bills affecting the bottom line

Several recently passed or pending bills, some of which were still under consideration during the last day of the lame-duck session Thursday, are putting increased pressure on the state budget. They include:

Public Act 226 of 2012: Earmarks 4% of the sales tax from aviation fuel to the Michigan Aeronautics Fund.

--Estimated impact: $10 million

--Status: law

HB 4753: Eliminates tax when property transfers to certain family members.

--Estimated impact $1.6 million

--Status: Passed by Senate; in House on Thursday.

HB 4969/70: Exempts certain forest lands from property tax.

--Estimated impact: $4.4 million

--Status: Passed by Senate in lame duck, with changes.

HB 5444/5445: Exempts trucks and trailers used in interstate commerce from certain taxes.

--Estimated impact: $400,000

--Status: Passed in lame duck.

HB 5557: For 2011 only, extends deadline for downtown development authorities to seek certain reimbursements from state.

--Estimated impact: $200,000

--Status: Passed in lame duck.

HB 5696: Provides that when cars and boats are purchased from a dealer, buyer pays sales tax on only difference between the purchase value and the trade-in value.

--Estimated impact: $125 million, which will be lessened through a 10-year phase-in.

--Status: Passed Senate in lame duck; in House on Thursday.

HB 5732: Allows historic preservation tax credits to be assigned to others.

--Estimated impact: $2.4 million

--Status: Passed in lame duck.

Note: Estimated impact of bills could change as a result of late amendments.