November 25, 2025 • 23 mins
What do billion-dollar road funding shifts, a new marihuana tax, and leadership in national tax policy have in common? Michigan’s Treasury is at the center of it all.
In this episode, we meet Chief Deputy Treasurer Lance Wilkinson and hear about his path into public service and tax policy. He shares insights into the role of the Chief Deputy Treasurer and how leadership at Treasury supports the department’s long-term vision and commitment to public service.
We explore Michigan’s involvement in the Streamlined Sales Tax Governing Board and how it helps support taxpayers nationwide. Then, we dive into the many tax policy changes shaping the year ahead—from the Research and Development (R&D) Tax Credit and the Fiscal Year 2026 budget’s transportation funding overhaul to new developments like the Wholesale Marihuana Tax—and what these shifts mean for communities and businesses across the state.
Throughout the episode, you’ll hear how Treasury is prioritizing transparency, collaboration, and efforts to make tax systems that focus on improving the customer experience. From internal teamwork to national coordination, this conversation offers a clear look at how policy, leadership, and service come together behind the scenes.
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Episode Transcript
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Introduction (00:02):
Welcome to Treasury Talk, a podcast
featuring timely tips andinformation for Michigan
taxpayers, hosted by StateTreasurer Rachael Eubanks.
Listen for takeaways from oursubject matter experts that will
support you, your family, andyour business.
Rachael (00:19):
Welcome back to Treasury Talk, where we explore
the people, policies, andprograms shaping Michigan's
financial future.
I'm your host, State TreasurerRachael Eubanks.
Today I'm joined by someone whoplays a critical leadership
role in our department, ourChief Deputy Treasurer Lance
Wilkinson.
We're going to talk about abillion-dollar shift in how
(00:40):
Michigan funds its roads andwhat it means for your
neighborhood.
Lance brings deep experience intax policy, legal expertise,
and public service leadership.
We'll talk about his new role,current treasury policies, and
Michigan's growing influence onthe national stage.
Lance, welcome to the podcast.
Thanks.
Lance (01:00):
Great to be here.
Rachael (01:01):
So, Lance, you recently just stepped into this role as
Chief Deputy Treasurer.
And folks may not know who youare or may be hearing your voice
for the first time.
So can you tell us a little bitabout yourself?
Lance (01:12):
Absolutely.
I will start with a little minibiography, but it might run on
a little bit.
Born and raised in Michigan,grew up in Midland, went to
school in Ann Arbor, and Ithought I wanted to be an
economics professor.
So I got my bachelor's ineconomics.
But when I got to the point ofnearing graduation and getting
(01:34):
ready for grad school, Irealized I wasn't ready to go to
grad school.
I needed a break.
I wanted to go and work for awhile and then see what happened
from there.
So picked up, moved to Arizona,worked for a big tech company
where I did SAP implementations.
Fast forward a couple decades,and we're doing SAP
implementations here, and italways sort of harkens back to
what I did back when I workedfor Intel.
(01:55):
There, we were focused onwarehouse management.
Here it's a much differentpicture.
But after I did that for a fewyears, though, I realized that
that really wasn't the careerthat I wanted to spend the rest
of my life in.
So went to law school with anidea that I was going to go into
public service of some sort.
Wasn't exactly sure what thatlooked like.
(02:17):
And then once I was in lawschool, though, I got caught up
in the law school flow and endedup going into private practice,
which is about as far away frompublic service as you can get.
But I learned a lot while I wasthere, got into tax law, really
enjoyed that area of the law.
And from there, there's anopportunity that came open at
(02:40):
the state.
I had an opportunity to workfor Glenn White, who was
administrator of tax policy atthe time, took that job, and
I've been with Treasury eversince.
So I think I'm in year 20 nowor nearing year 20.
It's been a great journey.
Loved it every step of the way.
I think the key though was Ifind value in the public service
(03:03):
component.
Did not necessarily, I mean, Ilike working for Intel and I
like working in privatepractice.
But there's something morerewarding, I think, when you
have an opportunity to work forthe state as a whole.
You're, you know, working toraise money, to generate
revenue, collect revenue thatthe state uses to provide
services to its citizens.
So that's really what motivatesme, and it's what I've enjoyed
(03:25):
doing.
Rachael (03:25):
So and I love that you shared all that detail because I
remember one of the interviewsthat we had recently, we were
talking about, hey, you know,that school in Ann Arbor, which
I also went to, by the way,that's a very lancing thing to
say that I went to school in AnnArbor and not give any
additional details.
Yes.
Uh, but you know, we are botheconomists and we both were sort
of at U of M at the same time.
You were in law school when Iwas getting my bachelor's in
(03:47):
economics.
So lots in common there.
And I'm so glad that you didbring all of that background to
public service because you'vebeen a tremendous public
servant.
And uh seeing your growthhappen and then coming out of
tax policy to take on this newrole as chief deputy has been
very exciting to see.
And I'm wondering if you'vegiven any thought to what your
top priorities may be as you'vetransitioned in.
Lance (04:08):
It's been a transition in this new role.
The job of chief deputytreasurer is very broad compared
to where I was before.
And so a lot of what I've beendoing at the start is giving
myself a little grace to learnthe new role, learn the people,
learn the new duties, sort ofstep outside of that tax policy
framework where we're reallyfocused on tax law and
(04:30):
litigation and public guidanceand really learning what
everything else is, you know,everything else that's happening
in Treasury.
And so that's been a learningprocess.
Um, you know, I went back andhad a chance to look at my PD
for the current position.
It's very broad, but I thinkthe one line that sort of stuck
out is that you know, thisposition, the chief deputy
(04:52):
position, will assist the statetreasurer in the formulation and
implementation of agencyinitiatives as well as policies
and programs critical to themission, to the mission of
Treasury.
And that's really what I'mfocused on.
Now that could be anything on aday-to-day basis.
Um, so we have obviously biginitiatives of modernizing our
(05:14):
systems, continuing to providegreat customer service.
Um, but we also have issuesthat pop up from time to time.
It could be litigation, likewe've recently been sued um for
the marijuana wholesale tax thatwe're implementing as part of
the budget deal.
Another thing we're taking alook at is economic development.
So we have a relationship withthe MEDC where we're continuing
(05:38):
to look at some of the projectsthat are going through the MEDC.
So we're taking a close look aspart of our statutory
obligation to consult with theMEDC on these projects.
But we also know from the Houseand the Senate that they have
ideas to bring additionaleconomic development tools in
terms of job retention or jobcreation to the state to replace
(06:02):
some of the older antiquatedstatutory schemes we have now.
So we're gonna spend a lot oftime on that over the next two
months.
I think the goal, as stated bythe legislature, is to get
something done by the end of theyear.
So we're gonna have a lot ofwork to do over the next month
and a half.
Rachael (06:17):
Right.
And I know the governor hasshared that same goal, has
expressed her same same goal offinishing by the end of the
year.
And you brought up somethingthere that I think is really
important, people may notrealize is that the process of
analyzing treasury-related billsis extremely complicated.
There's a lot that goes into itfrom a legal underpinnings
perspective, from an economicperspective, from a revenue
(06:39):
perspective.
And we are really flagging andtracking these bills all through
the process, whether or not,you know, there's a strong
likelihood that they'll make itto conclusion or not.
But we want to be prepared andgive feedback to policymakers as
they're evaluating theirproposals.
So I thought that was a reallygreat point that you brought up.
Another unique thing about thechief deputy, which I find is
one of these state governmenttrivia points, is it's a role
(07:02):
that's actually defined bystatute.
Um, I'm not sure that any otherdeputy across the state of
Michigan has that, but reallyit's kind of your own statutory
office.
So it's kind of unique.
And I'm sure as an attorney,you must get a kick out of that.
Um, but as we think about youknow, your experience as tax
policy director, and what Ialways say when talking about
the department is, you know, the18 levels, which are these
(07:24):
bureau director levels, aretruly the engine and the driver
of a lot of um what the workthat we do because they're
taking sort of high pol uhhigh-level policy guidance and
translating it intoimplementation uh at the ground
level.
So, how do you think that thatexperience really prepared you
for making this transition uhinto your role?
Lance (07:44):
Yeah, senior leadership, you know, sets a strategic
direction for the department,but it's really the bureau
directors that has to implementall that, do all the work,
manage all the day-to-day stuffthat's occurring throughout the
department.
And as a bureau director, I hadthe opportunity to lead a group
that was conducting hearings,handling complex inquiries,
(08:05):
refunds on the sales tax side,um, handling litigation,
drafting guidance, analyzingbills.
So I had the opportunity tosort of look at that, you know,
relatively narrow slice of theTreasury Pie, but do it in a way
that was sort of deliberate.
And um I think I learned somevaluable skills in that area
(08:25):
because you're looking at verycomplex, important issues to the
state, but you have to do it ina way where you're looking at
the whole picture.
Uh you don't always have allthe time in the world, but you
can't be so rushed that you mississues or you're not looking at
all sides of a particularscenario.
But you need to do that, youneed to analyze it, you need to
(08:47):
come to recommendations, youneed to execute those solutions.
And I think those skills andthat approach is the same thing
you do at my current job.
So I've I learned a lot asbureau director.
I had a wonderful staff thatreally did all the work.
Um and I just had theopportunity to grow in that
role.
(09:07):
And I'm I'm hoping that I canuse those same skills, those
same relationships, that sameapproach in my current role.
Rachael (09:13):
And I know that the other bureau directors really
look up to you and uh appreciatethe fact that you understand
that you've walked in theirshoes.
And I think that's a huge uhyou know piece that's gonna
benefit you in your leadershipposition here.
So, speaking of leadershippositions, you've had a couple
new ones recently.
In addition to the chief deputyrole, uh you were also elected
(09:34):
president of the StreamlinedSales Tax Governing Board.
Congratulations.
Thank you.
It's an honor.
Absolutely.
What does this role mean forMichigan?
Lance (09:43):
I'll answer that question by first describing a little
bit about what Streamline'sabout.
I mean, the Streamlined SalesTax Governing Board, it's a
multi-state agreement.
There's 24 member states thatwork together to simplify sales
tax collection across statelines.
Um, it also makes it easier forremote sellers to pay tax into
(10:07):
Michigan.
Um, one of the early members ofStreamline always said that one
of the things you want to do isyou want to make that money bag
big enough that thoseout-of-state businesses can pay
their tax and make it easier foryou to collect.
And that's exactly whatStreamline does.
Um, as president, I can sort ofhelp make those efforts more
efficient.
I can certainly make sure thatMichigan's voice is heard.
(10:29):
And that's why I think one ofthe benefits of me being
president will be next year.
I mean, we've had otherleadership positions in Michigan
with Streamlined before.
Dave Mateslki was chair of thestate and local advisory
committee for quite some time.
And we had some streamlinedcompliance issues back then
where Dave was able to get theagreement amended to make sure
(10:51):
that Michigan remained incompliance.
And I think I'm gonna have thesame opportunity as president,
maybe even more so, um, to sortof direct the focus of the
streamlined organization overthe next year and make sure
Michigan's voice is heard.
Rachael (11:06):
And I am very happy to hear that you're involved with
that organization because Ithink that's a critical voice uh
for Michigan taxpayers andbusinesses and ensuring we stay
in compliance and the benefitsthat come along with that.
One of those wonkyorganizations that probably most
of our listeners didn't knowabout until just now.
So thank you for sharing.
So let's shift gears a littlebit.
Uh the fiscal year 2026 budgetcycle, which recently concluded,
(11:28):
uh, as usual, had quite a bit,uh quite a few components that
directly impacted Treasury,including several tax policy
changes, including thetransportation funding package,
which is a sweeping set ofreforms that touches on
everything from motor fuel tomarijuana to corporate income
tax earmarks.
What role are we playing inimplementing all these changes?
Lance (11:50):
I think it's an honor that the budget deal was passed
on really the back of severalnew tax initiatives, all of
which Treasury is critical inimplementing.
So I think that's sort of anhonor that Treasury gets to
participate there.
But it is a major undertaking,and Treasury is the absolute
center of its implementation.
(12:12):
And it's not just about the taxcode, it's also about making
sure that our local roads aresafer, commute is smoother, and
you know, our community isstronger in general.
But, you know, we have, as yousaid, the new marijuana tax, we
have decoupling, we havecoupling, and I can go into more
detail about all those later.
(12:33):
Um, we have the gas tax, salestax swap, and we are continuing
to implement the research anddevelopment credit that went
into effect last year.
So we are responsible foradministering all of these new
taxes, and it's a huge lift interms of we need to interpret
the statutes, we need to provideguidance to taxpayers so that
(12:56):
they can, you know, comply withthe law and take advantage of
the incentives that are outthere in terms of the RD credit,
for example.
But we also have to enact, youknow, adopt new systems, change
our forms, we have to, you know,just strategically plan how
we're going to effectivelyadminister all these new taxes
in a way that the state gets therevenue it needs to balance the
(13:18):
budget and to fund the roads.
And but also taxpayers knowwhat they're doing and the and
they can easily comply.
Rachael (13:24):
And really the tax work is critical to helping the
state realize its policypriorities and us driving that.
I I agree with you is a is ahuge honor and something that I
know that we all take veryseriously in the department uh
as we move our work forward.
So you mentioned the wholesalemarijuana tax.
Let's talk about that a littlebit more.
What's Treasury doing toimplement this policy as enacted
(13:45):
by lawmakers?
Lance (13:47):
So we are building out the systems and guidance needed
to support licensees and ensurecompliance.
Uh, this includes definingwholesale pricing, setting up
the return filing processes,working with the CRA or the
cannabis regulatory agency toalign our efforts and make sure
because it's a highly regulatedindustry.
So we have the tax piece, theyhave the regulatory piece, we
(14:09):
need to work together.
Um there's been a lot ofspeculation and misinformation
out there about this tax, oftenraised by parties that are also
um representing the marijuanaindustry in the lawsuit against
us about this tax.
So it's been a little bitdifficult to have those
conversations to iron those out.
But I think broadly there was areally two issues that were
(14:32):
raised.
One was there was a incorrectbelief that the tax was
circular, because the way thatthey define the tax is sort of
um includes any other tax on theproduct at the time that the
tax is imposed.
And there was this belief thatit would just keep you just kept
adding it back and back.
So it's a tax and a tax and atax.
(14:52):
So we've clarified that via anotice that we published
recently.
There's also just the odditiesof the marijuana market, I
guess, is because a lot of thesetransactions earlier in the um
in the chain uh might not bedone in cash.
Uh so it's done via credit oroffsets between parties or
(15:13):
related parties.
This is gonna require a tax inthat stage.
And so I think there's a lot ofconcern in the industry about
how they're gonna come up withthe funds to pay that tax.
So there's been a lot ofexplanation and guidance from us
on how we think that can bedone.
Rachael (15:29):
And you mentioned that there was a pending litigation.
I mean, what are we doing inthe environment of that pending
litigation?
Lance (15:35):
We are proceeding as normal.
It's the law.
We're required to implementthis.
It goes into effect umbeginning of 26.
So uh we have to proceed as ifwe're gonna win the lawsuit.
Um, they are seeking aninjunction in a lawsuit, so I
guess in the event that they winon that front, it would require
(15:55):
us to reevaluate things.
But as of right now, you know,the statute requires this tax go
into effect, you know, January1, 2026, and we have to be ready
for that.
Rachael (16:05):
Absolutely.
And I know folks all acrossTreasury are getting ready for
that.
Uh and that wasn't the only bigtax change, right?
You touched on the fuelchanges, which are big issues as
well.
What is that transition lookinglike?
Lance (16:17):
Aaron Powell So that's another complicated one that
consumers won't necessarily seebecause the price that any of us
pay at the pump after all ofthis goes into effect in 26 will
be about the same as you paynow.
Um but the big difference isthat the motor fuel tax is being
increased and the sales tax isbeing dropped off of fuel.
(16:40):
And so those sort of offset oneanother, but that actually
changes the the revenue streamand where those revenues go.
For example, right now there'sa 31 cent rate on motor fuel.
Um for 26, that'll get bumpedup to 51 cents and then be
adjusted for inflation.
So we're working on a noticethat will be published shortly
(17:02):
that will describe what thatrate will be for 26.
Um, but we also there's a floorstock tax, so we're gonna have
to work with um you know gasstations and really any fuel
retailers to make sure that thefuel that they have in storage
as of the date that this goesinto effect gets taxed and
basically trued up.
(17:22):
We're also handling the sunsetof the sales tax on fuel, which
requires us to backfill theschool aid fund to keep it
whole.
But again, as I said, fordrivers, the total tax at the
pump is gonna remain the same.
But the key difference is thatstarting next year, all the
taxes you pay at the pump willgo directly to road and bridge
improvements instead of beingsplit with other funds.
(17:43):
So this has been sort of a longtime coming.
I think this has been discussedoff and on over the years, but
it's actually gonna go intoeffect next year.
So we're excited about that.
Rachael (17:54):
Big changes, but as you said, you know, at the pump, it
shouldn't make that much of adifference.
So a critical piece of thetransportation funding plan uh
included some earmarking fromthe corporate income tax.
What does that mean forTreasury?
Lance (18:08):
This is a pretty big shift in how we manage and
forecast revenue.
So we expect to earmark up to$1 billion annually from the CIT
to the neighborhood roads fundbetween 29 and 30.
That requires careful trackingand coordination with the budget
office to ensure that the rightamounts are deposited and
distributed.
Rachael (18:28):
And we talked about this before.
Our uh Chief Revenue andEconomic Forecaster, Eric Buses,
has touched on how thecorporate income tax has been an
unpredictable tax to forecast.
And so I know that's somethingthat we're gonna be watching
extremely closely and makingsure that we get the right
dollars and the right fundswhere they go.
On that note, uh, with so manymoving parts, how are we getting
(18:49):
this done?
How are we ensuringtransparency?
How are we ensuringaccountability?
Lance (18:54):
We are definitely committed to clear
communication, timely reporting,and modernizing our systems to
handle these changesefficiently.
We're also working with our,you know, our state stakeholders
like the CRA and the MichiganDepartment of Transportation,
amongst other partners.
Um internally, we have sort ofimplementation teams.
(19:14):
So everybody has a piece to getthese new taxes across the
finish line.
You have Revenue Services hasto develop systems and forms to
make sure that people are ableto pay their taxes and report
the um statutory requirementsproperly.
You have tax policy and orderwho are you know analyzing the
statute, providing guidance andthen making sure that the
(19:37):
forecasts and numbers andrevenue goes to the right place.
Um we have TCB who's gonna thenyou know audit these taxpayers
and make sure that they arecomplying with the statute.
Um and so we have regularmeetings scheduled really from
now until post-implementation tomake sure everything's getting
done at the right time.
(19:58):
So so far we're on track, butit's a big lift.
This is a lot of new taxes allat once.
And you know, we, you know, forexample, in marijuana, even
though the tax goes into effectJanuary 1, 2026, we won't be
ready to accept payments untilsometime significantly later
than that.
So it's you know, communicatingto taxpayers so they know what
to expect, and then being readyto accept that revenue when we
(20:22):
have the systems and the abilityto do so.
Rachael (20:25):
And one last piece of the puzzle here, uh you touched
on the words coupling anddecoupling.
And I'm assuming you didn'tmean that in the context of like
celebrity couple marriages anddivorces, the way that they do
their press releases thatprobably has a technical tax
name for it.
Would you share uh what thoseprovisions were in the budget?
Lance (20:43):
So the way our corporate income tax and our individual
income tax work is we pick astarting point on the federal
code.
So for corporate income tax, Ithink it's federal taxable
income, and on the income taxside, it's AGI.
So when there's a change at thefederal level that impacts
those starting points, thatflows through to the Michigan
(21:06):
side.
So with um the one bigbeautiful bill act, which is
hard to say, I just sort ofusually say OB3 because it's
shorter and it sort of flowsbetter.
But there were a lot of changesin that OB3 Act that impacted
our revenue stream.
And so what we did, what thelegislature did was we uncoupled
(21:28):
or decoupled.
And what that means isbasically we say, look, we're
gonna calculate our tax as ifthe changes that the feds just
made didn't really happen.
Most of these are a timingchange, so they have to do with
depreciation schedules.
So it's not necessarily thattaxpayers won't get the benefit
of those federal changes, butthat those benefits will be
(21:48):
spread over time instead of allhappening in one year.
But by decoupling from thoseprovisions, we were able to
preserve Michigan's revenuestream to support the roads and
the projects that are part ofthe budget.
And then the coupling part isthere were also some provisions
in the OB3 Act, which basicallychanged the way we tax tips and
(22:12):
we tax overtime.
And again, those changes wouldnot have automatically flowed
through because of the waythey're calculated at the
federal level.
So we are basically coupling tothose changes, like making sure
that those changes at thefederal level also work at the
state level so that our citizensand our taxpayers get the
benefit of those federal changeson the state side as well.
(22:33):
But all of those are prettysignificant changes.
So again, we've got toimplement them.
It's a big lift, but we'rewe're on track.
Rachael (22:41):
And we'll continue to communicate as those as we work
through all those processes.
Uh, I know that all of ourlisteners really enjoyed hearing
from you, Lance.
I mean, at listening to youtalk, you're an incredible,
incredibly knowledgeable personin this area.
Uh, and that's been hugelyhelpful as we've gone to
implement this budget year 26deal.
From your new role as presidentof the Streamlined Sales Tax
Governing Board to Treasury'swork implementing the 2026
(23:04):
transportation funding package,it's clear that your leadership
is helping position Michigan atthe forefront of smart,
sustainable public finance.
To our listeners, thank you forturning into Treasury Talk.
We hope that today'sconversation gives you a better
understanding of how Michigan isworking behind the scenes to
support local communities,modernize tax systems, and
invest in Michigan's future.
(23:25):
If you'd like to learn moreabout the Neighborhood Roads
Fund, the new marijuana excisetax, or any of the topics we
cover today, visit Michigan.govslash Treasury.
If you have any questions aboutthese changes, email us at
TreasuryOutreach at Michigan.govor follow us on social media.
Until next time, take care andthank you for listening.
Welcome to Treasury Talk, a podcast
featuring timely tips andinformation for Michigan
taxpayers, hosted by StateTreasurer Rachael Eubanks.
Listen for takeaways from oursubject matter experts that will
support you, your family, andyour business.
Rachael (00:19):
Welcome back to Treasury Talk, where we explore
the people, policies, andprograms shaping Michigan's
financial future.
I'm your host, State TreasurerRachael Eubanks.
Today I'm joined by someone whoplays a critical leadership
role in our department, ourChief Deputy Treasurer Lance
Wilkinson.
We're going to talk about abillion-dollar shift in how
(00:40):
Michigan funds its roads andwhat it means for your
neighborhood.
Lance brings deep experience intax policy, legal expertise,
and public service leadership.
We'll talk about his new role,current treasury policies, and
Michigan's growing influence onthe national stage.
Lance, welcome to the podcast.
Thanks.
Lance (01:00):
Great to be here.
Rachael (01:01):
So, Lance, you recently just stepped into this role as
Chief Deputy Treasurer.
And folks may not know who youare or may be hearing your voice
for the first time.
So can you tell us a little bitabout yourself?
Lance (01:12):
Absolutely.
I will start with a little minibiography, but it might run on
a little bit.
Born and raised in Michigan,grew up in Midland, went to
school in Ann Arbor, and Ithought I wanted to be an
economics professor.
So I got my bachelor's ineconomics.
But when I got to the point ofnearing graduation and getting
(01:34):
ready for grad school, Irealized I wasn't ready to go to
grad school.
I needed a break.
I wanted to go and work for awhile and then see what happened
from there.
So picked up, moved to Arizona,worked for a big tech company
where I did SAP implementations.
Fast forward a couple decades,and we're doing SAP
implementations here, and italways sort of harkens back to
what I did back when I workedfor Intel.
(01:55):
There, we were focused onwarehouse management.
Here it's a much differentpicture.
But after I did that for a fewyears, though, I realized that
that really wasn't the careerthat I wanted to spend the rest
of my life in.
So went to law school with anidea that I was going to go into
public service of some sort.
Wasn't exactly sure what thatlooked like.
(02:17):
And then once I was in lawschool, though, I got caught up
in the law school flow and endedup going into private practice,
which is about as far away frompublic service as you can get.
But I learned a lot while I wasthere, got into tax law, really
enjoyed that area of the law.
And from there, there's anopportunity that came open at
(02:40):
the state.
I had an opportunity to workfor Glenn White, who was
administrator of tax policy atthe time, took that job, and
I've been with Treasury eversince.
So I think I'm in year 20 nowor nearing year 20.
It's been a great journey.
Loved it every step of the way.
I think the key though was Ifind value in the public service
(03:03):
component.
Did not necessarily, I mean, Ilike working for Intel and I
like working in privatepractice.
But there's something morerewarding, I think, when you
have an opportunity to work forthe state as a whole.
You're, you know, working toraise money, to generate
revenue, collect revenue thatthe state uses to provide
services to its citizens.
So that's really what motivatesme, and it's what I've enjoyed
(03:25):
doing.
Rachael (03:25):
So and I love that you shared all that detail because I
remember one of the interviewsthat we had recently, we were
talking about, hey, you know,that school in Ann Arbor, which
I also went to, by the way,that's a very lancing thing to
say that I went to school in AnnArbor and not give any
additional details.
Yes.
Uh, but you know, we are botheconomists and we both were sort
of at U of M at the same time.
You were in law school when Iwas getting my bachelor's in
(03:47):
economics.
So lots in common there.
And I'm so glad that you didbring all of that background to
public service because you'vebeen a tremendous public
servant.
And uh seeing your growthhappen and then coming out of
tax policy to take on this newrole as chief deputy has been
very exciting to see.
And I'm wondering if you'vegiven any thought to what your
top priorities may be as you'vetransitioned in.
Lance (04:08):
It's been a transition in this new role.
The job of chief deputytreasurer is very broad compared
to where I was before.
And so a lot of what I've beendoing at the start is giving
myself a little grace to learnthe new role, learn the people,
learn the new duties, sort ofstep outside of that tax policy
framework where we're reallyfocused on tax law and
(04:30):
litigation and public guidanceand really learning what
everything else is, you know,everything else that's happening
in Treasury.
And so that's been a learningprocess.
Um, you know, I went back andhad a chance to look at my PD
for the current position.
It's very broad, but I thinkthe one line that sort of stuck
out is that you know, thisposition, the chief deputy
(04:52):
position, will assist the statetreasurer in the formulation and
implementation of agencyinitiatives as well as policies
and programs critical to themission, to the mission of
Treasury.
And that's really what I'mfocused on.
Now that could be anything on aday-to-day basis.
Um, so we have obviously biginitiatives of modernizing our
(05:14):
systems, continuing to providegreat customer service.
Um, but we also have issuesthat pop up from time to time.
It could be litigation, likewe've recently been sued um for
the marijuana wholesale tax thatwe're implementing as part of
the budget deal.
Another thing we're taking alook at is economic development.
So we have a relationship withthe MEDC where we're continuing
(05:38):
to look at some of the projectsthat are going through the MEDC.
So we're taking a close look aspart of our statutory
obligation to consult with theMEDC on these projects.
But we also know from the Houseand the Senate that they have
ideas to bring additionaleconomic development tools in
terms of job retention or jobcreation to the state to replace
(06:02):
some of the older antiquatedstatutory schemes we have now.
So we're gonna spend a lot oftime on that over the next two
months.
I think the goal, as stated bythe legislature, is to get
something done by the end of theyear.
So we're gonna have a lot ofwork to do over the next month
and a half.
Rachael (06:17):
Right.
And I know the governor hasshared that same goal, has
expressed her same same goal offinishing by the end of the
year.
And you brought up somethingthere that I think is really
important, people may notrealize is that the process of
analyzing treasury-related billsis extremely complicated.
There's a lot that goes into itfrom a legal underpinnings
perspective, from an economicperspective, from a revenue
(06:39):
perspective.
And we are really flagging andtracking these bills all through
the process, whether or not,you know, there's a strong
likelihood that they'll make itto conclusion or not.
But we want to be prepared andgive feedback to policymakers as
they're evaluating theirproposals.
So I thought that was a reallygreat point that you brought up.
Another unique thing about thechief deputy, which I find is
one of these state governmenttrivia points, is it's a role
(07:02):
that's actually defined bystatute.
Um, I'm not sure that any otherdeputy across the state of
Michigan has that, but reallyit's kind of your own statutory
office.
So it's kind of unique.
And I'm sure as an attorney,you must get a kick out of that.
Um, but as we think about youknow, your experience as tax
policy director, and what Ialways say when talking about
the department is, you know, the18 levels, which are these
(07:24):
bureau director levels, aretruly the engine and the driver
of a lot of um what the workthat we do because they're
taking sort of high pol uhhigh-level policy guidance and
translating it intoimplementation uh at the ground
level.
So, how do you think that thatexperience really prepared you
for making this transition uhinto your role?
Lance (07:44):
Yeah, senior leadership, you know, sets a strategic
direction for the department,but it's really the bureau
directors that has to implementall that, do all the work,
manage all the day-to-day stuffthat's occurring throughout the
department.
And as a bureau director, I hadthe opportunity to lead a group
that was conducting hearings,handling complex inquiries,
(08:05):
refunds on the sales tax side,um, handling litigation,
drafting guidance, analyzingbills.
So I had the opportunity tosort of look at that, you know,
relatively narrow slice of theTreasury Pie, but do it in a way
that was sort of deliberate.
And um I think I learned somevaluable skills in that area
(08:25):
because you're looking at verycomplex, important issues to the
state, but you have to do it ina way where you're looking at
the whole picture.
Uh you don't always have allthe time in the world, but you
can't be so rushed that you mississues or you're not looking at
all sides of a particularscenario.
But you need to do that, youneed to analyze it, you need to
(08:47):
come to recommendations, youneed to execute those solutions.
And I think those skills andthat approach is the same thing
you do at my current job.
So I've I learned a lot asbureau director.
I had a wonderful staff thatreally did all the work.
Um and I just had theopportunity to grow in that
role.
(09:07):
And I'm I'm hoping that I canuse those same skills, those
same relationships, that sameapproach in my current role.
Rachael (09:13):
And I know that the other bureau directors really
look up to you and uh appreciatethe fact that you understand
that you've walked in theirshoes.
And I think that's a huge uhyou know piece that's gonna
benefit you in your leadershipposition here.
So, speaking of leadershippositions, you've had a couple
new ones recently.
In addition to the chief deputyrole, uh you were also elected
(09:34):
president of the StreamlinedSales Tax Governing Board.
Congratulations.
Thank you.
It's an honor.
Absolutely.
What does this role mean forMichigan?
Lance (09:43):
I'll answer that question by first describing a little
bit about what Streamline'sabout.
I mean, the Streamlined SalesTax Governing Board, it's a
multi-state agreement.
There's 24 member states thatwork together to simplify sales
tax collection across statelines.
Um, it also makes it easier forremote sellers to pay tax into
(10:07):
Michigan.
Um, one of the early members ofStreamline always said that one
of the things you want to do isyou want to make that money bag
big enough that thoseout-of-state businesses can pay
their tax and make it easier foryou to collect.
And that's exactly whatStreamline does.
Um, as president, I can sort ofhelp make those efforts more
efficient.
I can certainly make sure thatMichigan's voice is heard.
(10:29):
And that's why I think one ofthe benefits of me being
president will be next year.
I mean, we've had otherleadership positions in Michigan
with Streamlined before.
Dave Mateslki was chair of thestate and local advisory
committee for quite some time.
And we had some streamlinedcompliance issues back then
where Dave was able to get theagreement amended to make sure
(10:51):
that Michigan remained incompliance.
And I think I'm gonna have thesame opportunity as president,
maybe even more so, um, to sortof direct the focus of the
streamlined organization overthe next year and make sure
Michigan's voice is heard.
Rachael (11:06):
And I am very happy to hear that you're involved with
that organization because Ithink that's a critical voice uh
for Michigan taxpayers andbusinesses and ensuring we stay
in compliance and the benefitsthat come along with that.
One of those wonkyorganizations that probably most
of our listeners didn't knowabout until just now.
So thank you for sharing.
So let's shift gears a littlebit.
Uh the fiscal year 2026 budgetcycle, which recently concluded,
(11:28):
uh, as usual, had quite a bit,uh quite a few components that
directly impacted Treasury,including several tax policy
changes, including thetransportation funding package,
which is a sweeping set ofreforms that touches on
everything from motor fuel tomarijuana to corporate income
tax earmarks.
What role are we playing inimplementing all these changes?
Lance (11:50):
I think it's an honor that the budget deal was passed
on really the back of severalnew tax initiatives, all of
which Treasury is critical inimplementing.
So I think that's sort of anhonor that Treasury gets to
participate there.
But it is a major undertaking,and Treasury is the absolute
center of its implementation.
(12:12):
And it's not just about the taxcode, it's also about making
sure that our local roads aresafer, commute is smoother, and
you know, our community isstronger in general.
But, you know, we have, as yousaid, the new marijuana tax, we
have decoupling, we havecoupling, and I can go into more
detail about all those later.
(12:33):
Um, we have the gas tax, salestax swap, and we are continuing
to implement the research anddevelopment credit that went
into effect last year.
So we are responsible foradministering all of these new
taxes, and it's a huge lift interms of we need to interpret
the statutes, we need to provideguidance to taxpayers so that
(12:56):
they can, you know, comply withthe law and take advantage of
the incentives that are outthere in terms of the RD credit,
for example.
But we also have to enact, youknow, adopt new systems, change
our forms, we have to, you know,just strategically plan how
we're going to effectivelyadminister all these new taxes
in a way that the state gets therevenue it needs to balance the
(13:18):
budget and to fund the roads.
And but also taxpayers knowwhat they're doing and the and
they can easily comply.
Rachael (13:24):
And really the tax work is critical to helping the
state realize its policypriorities and us driving that.
I I agree with you is a is ahuge honor and something that I
know that we all take veryseriously in the department uh
as we move our work forward.
So you mentioned the wholesalemarijuana tax.
Let's talk about that a littlebit more.
What's Treasury doing toimplement this policy as enacted
(13:45):
by lawmakers?
Lance (13:47):
So we are building out the systems and guidance needed
to support licensees and ensurecompliance.
Uh, this includes definingwholesale pricing, setting up
the return filing processes,working with the CRA or the
cannabis regulatory agency toalign our efforts and make sure
because it's a highly regulatedindustry.
So we have the tax piece, theyhave the regulatory piece, we
(14:09):
need to work together.
Um there's been a lot ofspeculation and misinformation
out there about this tax, oftenraised by parties that are also
um representing the marijuanaindustry in the lawsuit against
us about this tax.
So it's been a little bitdifficult to have those
conversations to iron those out.
But I think broadly there was areally two issues that were
(14:32):
raised.
One was there was a incorrectbelief that the tax was
circular, because the way thatthey define the tax is sort of
um includes any other tax on theproduct at the time that the
tax is imposed.
And there was this belief thatit would just keep you just kept
adding it back and back.
So it's a tax and a tax and atax.
(14:52):
So we've clarified that via anotice that we published
recently.
There's also just the odditiesof the marijuana market, I
guess, is because a lot of thesetransactions earlier in the um
in the chain uh might not bedone in cash.
Uh so it's done via credit oroffsets between parties or
(15:13):
related parties.
This is gonna require a tax inthat stage.
And so I think there's a lot ofconcern in the industry about
how they're gonna come up withthe funds to pay that tax.
So there's been a lot ofexplanation and guidance from us
on how we think that can bedone.
Rachael (15:29):
And you mentioned that there was a pending litigation.
I mean, what are we doing inthe environment of that pending
litigation?
Lance (15:35):
We are proceeding as normal.
It's the law.
We're required to implementthis.
It goes into effect umbeginning of 26.
So uh we have to proceed as ifwe're gonna win the lawsuit.
Um, they are seeking aninjunction in a lawsuit, so I
guess in the event that they winon that front, it would require
(15:55):
us to reevaluate things.
But as of right now, you know,the statute requires this tax go
into effect, you know, January1, 2026, and we have to be ready
for that.
Rachael (16:05):
Absolutely.
And I know folks all acrossTreasury are getting ready for
that.
Uh and that wasn't the only bigtax change, right?
You touched on the fuelchanges, which are big issues as
well.
What is that transition lookinglike?
Lance (16:17):
Aaron Powell So that's another complicated one that
consumers won't necessarily seebecause the price that any of us
pay at the pump after all ofthis goes into effect in 26 will
be about the same as you paynow.
Um but the big difference isthat the motor fuel tax is being
increased and the sales tax isbeing dropped off of fuel.
(16:40):
And so those sort of offset oneanother, but that actually
changes the the revenue streamand where those revenues go.
For example, right now there'sa 31 cent rate on motor fuel.
Um for 26, that'll get bumpedup to 51 cents and then be
adjusted for inflation.
So we're working on a noticethat will be published shortly
(17:02):
that will describe what thatrate will be for 26.
Um, but we also there's a floorstock tax, so we're gonna have
to work with um you know gasstations and really any fuel
retailers to make sure that thefuel that they have in storage
as of the date that this goesinto effect gets taxed and
basically trued up.
(17:22):
We're also handling the sunsetof the sales tax on fuel, which
requires us to backfill theschool aid fund to keep it
whole.
But again, as I said, fordrivers, the total tax at the
pump is gonna remain the same.
But the key difference is thatstarting next year, all the
taxes you pay at the pump willgo directly to road and bridge
improvements instead of beingsplit with other funds.
(17:43):
So this has been sort of a longtime coming.
I think this has been discussedoff and on over the years, but
it's actually gonna go intoeffect next year.
So we're excited about that.
Rachael (17:54):
Big changes, but as you said, you know, at the pump, it
shouldn't make that much of adifference.
So a critical piece of thetransportation funding plan uh
included some earmarking fromthe corporate income tax.
What does that mean forTreasury?
Lance (18:08):
This is a pretty big shift in how we manage and
forecast revenue.
So we expect to earmark up to$1 billion annually from the CIT
to the neighborhood roads fundbetween 29 and 30.
That requires careful trackingand coordination with the budget
office to ensure that the rightamounts are deposited and
distributed.
Rachael (18:28):
And we talked about this before.
Our uh Chief Revenue andEconomic Forecaster, Eric Buses,
has touched on how thecorporate income tax has been an
unpredictable tax to forecast.
And so I know that's somethingthat we're gonna be watching
extremely closely and makingsure that we get the right
dollars and the right fundswhere they go.
On that note, uh, with so manymoving parts, how are we getting
(18:49):
this done?
How are we ensuringtransparency?
How are we ensuringaccountability?
Lance (18:54):
We are definitely committed to clear
communication, timely reporting,and modernizing our systems to
handle these changesefficiently.
We're also working with our,you know, our state stakeholders
like the CRA and the MichiganDepartment of Transportation,
amongst other partners.
Um internally, we have sort ofimplementation teams.
(19:14):
So everybody has a piece to getthese new taxes across the
finish line.
You have Revenue Services hasto develop systems and forms to
make sure that people are ableto pay their taxes and report
the um statutory requirementsproperly.
You have tax policy and orderwho are you know analyzing the
statute, providing guidance andthen making sure that the
(19:37):
forecasts and numbers andrevenue goes to the right place.
Um we have TCB who's gonna thenyou know audit these taxpayers
and make sure that they arecomplying with the statute.
Um and so we have regularmeetings scheduled really from
now until post-implementation tomake sure everything's getting
done at the right time.
(19:58):
So so far we're on track, butit's a big lift.
This is a lot of new taxes allat once.
And you know, we, you know, forexample, in marijuana, even
though the tax goes into effectJanuary 1, 2026, we won't be
ready to accept payments untilsometime significantly later
than that.
So it's you know, communicatingto taxpayers so they know what
to expect, and then being readyto accept that revenue when we
(20:22):
have the systems and the abilityto do so.
Rachael (20:25):
And one last piece of the puzzle here, uh you touched
on the words coupling anddecoupling.
And I'm assuming you didn'tmean that in the context of like
celebrity couple marriages anddivorces, the way that they do
their press releases thatprobably has a technical tax
name for it.
Would you share uh what thoseprovisions were in the budget?
Lance (20:43):
So the way our corporate income tax and our individual
income tax work is we pick astarting point on the federal
code.
So for corporate income tax, Ithink it's federal taxable
income, and on the income taxside, it's AGI.
So when there's a change at thefederal level that impacts
those starting points, thatflows through to the Michigan
(21:06):
side.
So with um the one bigbeautiful bill act, which is
hard to say, I just sort ofusually say OB3 because it's
shorter and it sort of flowsbetter.
But there were a lot of changesin that OB3 Act that impacted
our revenue stream.
And so what we did, what thelegislature did was we uncoupled
(21:28):
or decoupled.
And what that means isbasically we say, look, we're
gonna calculate our tax as ifthe changes that the feds just
made didn't really happen.
Most of these are a timingchange, so they have to do with
depreciation schedules.
So it's not necessarily thattaxpayers won't get the benefit
of those federal changes, butthat those benefits will be
(21:48):
spread over time instead of allhappening in one year.
But by decoupling from thoseprovisions, we were able to
preserve Michigan's revenuestream to support the roads and
the projects that are part ofthe budget.
And then the coupling part isthere were also some provisions
in the OB3 Act, which basicallychanged the way we tax tips and
(22:12):
we tax overtime.
And again, those changes wouldnot have automatically flowed
through because of the waythey're calculated at the
federal level.
So we are basically coupling tothose changes, like making sure
that those changes at thefederal level also work at the
state level so that our citizensand our taxpayers get the
benefit of those federal changeson the state side as well.
(22:33):
But all of those are prettysignificant changes.
So again, we've got toimplement them.
It's a big lift, but we'rewe're on track.
Rachael (22:41):
And we'll continue to communicate as those as we work
through all those processes.
Uh, I know that all of ourlisteners really enjoyed hearing
from you, Lance.
I mean, at listening to youtalk, you're an incredible,
incredibly knowledgeable personin this area.
Uh, and that's been hugelyhelpful as we've gone to
implement this budget year 26deal.
From your new role as presidentof the Streamlined Sales Tax
Governing Board to Treasury'swork implementing the 2026
(23:04):
transportation funding package,it's clear that your leadership
is helping position Michigan atthe forefront of smart,
sustainable public finance.
To our listeners, thank you forturning into Treasury Talk.
We hope that today'sconversation gives you a better
understanding of how Michigan isworking behind the scenes to
support local communities,modernize tax systems, and
invest in Michigan's future.
(23:25):
If you'd like to learn moreabout the Neighborhood Roads
Fund, the new marijuana excisetax, or any of the topics we
cover today, visit Michigan.govslash Treasury.
If you have any questions aboutthese changes, email us at
TreasuryOutreach at Michigan.govor follow us on social media.
Until next time, take care andthank you for listening.
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