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By Tim Martin, Associated Press Writer

LANSING, Mich. (AP) — People who owe back state taxes could be let off the hook under an amnesty proposal that advanced Tuesday in the Michigan Legislature, part of a plan aimed at balancing the state budget.

The Democratic-led House passed a bill that would set up a window — May 15 through June 30 — for delinquent taxpayers to pay off their debts without criminal or civil penalty from the state treasurer. The program would apply to taxes due before the end of 2009.

The bill passed 58-49 mostly along party lines. It now returns to the Republican-led Senate, which passed a version of a tax amnesty plan in 2009.

The two chambers will have to resolve differences between their versions for tax amnesty to become part of the state's overall budget solution. The tax amnesty plan could raise about $60 million to help offset a projected deficit of $484 million in the budget year starting Oct. 1.

Lawmakers on Tuesday voted on spending plans for a few state departments as they race to finish the budget by the middle of next week.
Republican leaders say no prisons would be closed under a Department of Corrections budget unanimously approved in the Senate. The House could vote on that bill later this week.

Prison officials would have to find some cost savings to offset inflation and the growing cost of employee salaries and retirement benefits. The bill would direct the Department of Corrections to make $42 million in unspecified cuts.

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A budget bill reflecting higher Medicaid costs for the Department of Community Health passed the Legislature.

Lawmakers also passed a Department of Energy, Labor and Economic Growth budget that eliminates some state funding for a worker retraining program called No Worker Left Behind. The program is funded mostly with federal money.

Another key piece of the budget plan, a retirement incentive package for state employees, is awaiting a vote in the House.


The tax amnesty bill is Senate Bill 884; the Department of Corrections bill is Senate Bill 1153; the Department of Community Health bill is Senate Bill 1152; the Department of Energy, Labor and Economic Growth bill is House Bill 5884.

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