The state is confronting a 2008 fiscal year budget deficit of $1.75 billion as a result of a sluggish economy mainly related to the auto industry's impact on the state, according to the Michigan Boating Industries Association. With a Democratic governor, Democrat-controlled House and a Republican-controlled Senate, the state legislature struggled to reach a compromise between budget cuts and tax increases to balance the state budget. As a revenue enhancement, the governor proposed a service tax on so called "luxury" services, including a tax on marina services.
But the MBIA and its lobbying firm, Muchmore Harrington Smalley and Associates, succeeded yesterday in excluding any marina or marine service tax from the legislation passed by both chambers.
"This is a huge victory for Michigan's recreational boating industry," said MBIA's president Van Snider, in a statement. "We were able to effectively express how implementing a luxury services tax on the recreational boating industry would devastate our industry and further erode the economic benefits that boating provides to our state.