REVENUE FOR HISTORIC CAPITOL SITE FUND:

NO ADJUSTMENT IF CUMULATIVE CPI IS NEGATIVE

Senate Bill 956 as passed by the Senate

Sponsor:  Sen. Jim Stamas

House Committee:  Appropriations

Senate Committee:  Appropriations

Complete to 8-30-16

SUMMARY:

Under the Tobacco Products Tax Act, since Fiscal Year 2014–15, $3 million has been directed annually from tobacco tax revenue to the Capitol Historic Site Fund.[1]  Currently, this amount is to be adjusted annually to reflect the cumulative annual percentage change in the consumer price index.  Senate Bill 956 would amend the act so that in any year in which the cumulative annual CPI percentage change is negative, no adjustment will be made to revenues directed to the Capitol Historic Site Fund. The bill applies to the 2015–16 Fiscal Year and subsequent years.

MCL 205.432

FISCAL IMPACT:

As written, the bill would prevent the tobacco tax earmark to the Capital Historic Site Fund from falling below the prior year's level in the event that cumulative inflation relative to FY 2014-15 is negative. Although future inflation rates are not known, it is unlikely that persistent negative inflation rates would be sufficient to generate a significant fiscal impact.

                                                                                        Legislative Analyst:   Chris Couch

                                                                                                Fiscal Analyst:   Jim Stansell

■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.

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