Matt Hall pitches $4B Michigan tax overhaul, $1B energy bill savings

Republican House Speaker Matt Hall is pitching a $4 billion tax overhaul plan
The proposal would eliminate personal property taxes, the State Education Tax and real estate transfer tax, among other things
Also part of the plan: Requiring utilities roll back a least $1 billion in rates in exchange for personal property tax cuts

LANSING — Michigan House Speaker Matt Hall is developing a $4 billion tax overhaul plan in a bid to address rising housing costs and statewide affordability issues.

The Richland Township Republican offered a partial outline of the plan on Thursday, telling reporters he wants to eliminate the State Education Tax, personal property taxes and a real estate transfer tax.

Utilities that benefit should be required to cut energy bills by a combined $1 billion, he said, and schools and local governments that rely on property taxes should not face funding cuts as a result.

How would he pay for it all? Hall declined to say, but noted the potential for spending cuts in this year’s budget negotiations.

“I have a plan. I’m not going to get into it today, but it’ll be lower taxes,” he said during a Lansing press conference. “We’re going to replace all the funding. It’ll be revenue neutral on these schools and local governments.”

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Michigan began phasing out personal property taxes for many large businesses under a 2014 law. But Hall said he’d “like to go further” and scrap the tax altogether, arguing it “punishes growth and investment” throughout Michigan.

Utilities could save money as a result, he said, telling reporters he would not eliminate their personal property taxes “without also mandating at least a $1 billion rollback in our energy bills.”

“You can’t take away the cost, push them toward investment and then not see a major reduction in our utility bills,” Hall said. “I think this will lead to major savings for our residents of Michigan. We can get a more reliable grid and a more affordable energy bill.”

Spokespersons for DTE Energy and Consumers Energy did not immediately respond to a request for comment.

A key component of Hall’s plan: Eliminating the State Education Tax, which is a 6-mill tax rate that Michiganders pay on their summer property taxes. It generated nearly $3 billion in the 2025 fiscal year. If eliminated, Hall estimated it’ll save the average Michigan homeowner about $900 a year.

Hall’s comments came about a week after Gov. Gretchen Whitmer proposed a 10% property tax cut for seniors 65 and older as part of her $88 billion budget proposal.

Hall applauded the spirit of the proposal but said Thursday he opposes it because it could discourage seniors from downsizing, which would open up larger homes for other residents looking to buy.

He is instead proposing to eliminate the state’s real estate transfer tax and what he called a “pop-up tax,” which he said could eliminate barriers for people to more easily buy and sell homes.

In 1994, Michigan voters passed Proposal A, which limits the amount that property taxes can increase on an annual basis, meaning when a property is purchased the taxable value is capped and cannot increase by more than the rate of inflation or 5%, whichever is less.

The longer a person owns the property, the more likely there is a difference between a property’s taxable value and the home’s market rate. But when the property is sold, its taxable value is uncapped and the new buyer’s taxable value can “pop up” dramatically.

Eliminating that could incentivize seniors to downsize, creating a cascading effect where larger homes become available for families trying to break into the market, he argued.

“We need less regulations, we need a better tax structure and we need to come up with a better way to incentivize a bigger supply of homes,” he said. “If we do that, I think you’ll see a much better outcome — and you won’t have to spend hundreds of millions of taxpayer dollars to subsidize all these homes that, essentially, the government has made unaffordable.”

While Hall vowed to maintain funding for schools despite cutting taxes, his failure to propose any concrete steps to do so did not go over well with some education groups.

In a statement, Peter Spadafore of the Michigan Alliance for Student Opportunity criticized plans by both Hall and Whitmer, whose executive budget also proposed spending a record $1.8 billion in School Aid Fund revenue on community colleges and universities.

“Both Gov. Whitmer’s and Speaker Hall’s proposals to further erode tax dollars available to support essential services would blow massive holes in Michigan’s budget, and our students would pay the price,” Spadafore said. “Schools are not a piggy bank to be raided for political tax cut talking points this fall.”