Latest / Treasury Talk Podcast / Leadership, Tax Policy, and National Impact: A Conversation with Chief Deputy Treasurer Lance Wilkinson

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Leadership, Tax Policy, and National Impact: A Conversation with Chief Deputy Treasurer Lance Wilkinson · Treasury Talk Podcast

• 0:02
  Introduction: Welcome to Treasury Talk, a podcast featuring timely tips and information for Michigan taxpayers, hosted by State Treasurer Rachael Eubanks.
• 0:11
  Introduction: Listen for takeaways from our subject matter experts that will support you, your family, and your business.
• 0:19
  Rachael: Welcome back to Treasury Talk, where we explore the people, policies, and programs shaping Michigan's financial future.
• 0:26
  Rachael: I'm your host, State Treasurer Rachael Eubanks.
• 0:29
  Rachael: Today I'm joined by someone who plays a critical leadership role in our department, our Chief Deputy Treasurer Lance Wilkinson.
• 0:37
  Rachael: We're going to talk about a billion-dollar shift in how Michigan funds its roads and what it means for your neighborhood.
• 0:44
  Rachael: Lance brings deep experience in tax policy, legal expertise, and public service leadership.
• 0:51
  Rachael: We'll talk about his new role, current treasury policies, and Michigan's growing influence on the national stage.
• 0:57
  Rachael: Lance, welcome to the podcast.
• 0:59
  Rachael: Thanks.
• 1:00
  Lance: Great to be here.
• 1:01
  Rachael: So, Lance, you recently just stepped into this role as Chief Deputy Treasurer.
• 1:05
  Rachael: And folks may not know who you are or may be hearing your voice for the first time.
• 1:08
  Rachael: So can you tell us a little bit about yourself?
• 1:12
  Lance: Absolutely.
• 1:12
  Lance: I will start with a little mini biography, but it might run on a little bit.
• 1:18
  Lance: Born and raised in Michigan, grew up in Midland, went to school in Ann Arbor, and I thought I wanted to be an economics professor.
• 1:27
  Lance: So I got my bachelor's in economics.
• 1:29
  Lance: But when I got to the point of nearing graduation and getting ready for grad school, I realized I wasn't ready to go to grad school.
• 1:37
  Lance: I needed a break.
• 1:38
  Lance: I wanted to go and work for a while and then see what happened from there.
• 1:42
  Lance: So picked up, moved to Arizona, worked for a big tech company where I did SAP implementations.
• 1:47
  Lance: Fast forward a couple decades, and we're doing SAP implementations here, and it always sort of harkens back to what I did back when I worked for Intel.
• 1:55
  Lance: There, we were focused on warehouse management.
• 1:57
  Lance: Here it's a much different picture.
• 1:59
  Lance: But after I did that for a few years, though, I realized that that really wasn't the career that I wanted to spend the rest of my life in.
• 2:07
  Lance: So went to law school with an idea that I was going to go into public service of some sort.
• 2:14
  Lance: Wasn't exactly sure what that looked like.
• 2:17
  Lance: And then once I was in law school, though, I got caught up in the law school flow and ended up going into private practice, which is about as far away from public service as you can get.
• 2:28
  Lance: But I learned a lot while I was there, got into tax law, really enjoyed that area of the law.
• 2:37
  Lance: And from there, there's an opportunity that came open at the state.
• 2:41
  Lance: I had an opportunity to work for Glenn White, who was administrator of tax policy at the time, took that job, and I've been with Treasury ever since.
• 2:49
  Lance: So I think I'm in year 20 now or nearing year 20.
• 2:53
  Lance: It's been a great journey.
• 2:55
  Lance: Loved it every step of the way.
• 2:57
  Lance: I think the key though was I find value in the public service component.
• 3:04
  Lance: Did not necessarily, I mean, I like working for Intel and I like working in private practice.
• 3:09
  Lance: But there's something more rewarding, I think, when you have an opportunity to work for the state as a whole.
• 3:13
  Lance: You're, you know, working to raise money, to generate revenue, collect revenue that the state uses to provide services to its citizens.
• 3:21
  Lance: So that's really what motivates me, and it's what I've enjoyed doing.
• 3:25
  Rachael: So and I love that you shared all that detail because I remember one of the interviews that 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 Ann Arbor and not give any additional details.
• 3:39
  Rachael: Yes.
• 3:39
  Rachael: Uh, but you know, we are both economists and we both were sort of at U of M at the same time.
• 3:44
  Rachael: You were in law school when I was getting my bachelor's in economics.
• 3:47
  Rachael: So lots in common there.
• 3:49
  Rachael: And I'm so glad that you did bring all of that background to public service because you've been a tremendous public servant.
• 3:54
  Rachael: And uh seeing your growth happen and then coming out of tax policy to take on this new role as chief deputy has been very exciting to see.
• 4:01
  Rachael: And I'm wondering if you've given any thought to what your top priorities may be as you've transitioned in.
• 4:08
  Lance: It's been a transition in this new role.
• 4:10
  Lance: The job of chief deputy treasurer is very broad compared to where I was before.
• 4:15
  Lance: And so a lot of what I've been doing at the start is giving myself a little grace to learn the new role, learn the people, learn the new duties, sort of step outside of that tax policy framework where we're really focused on tax law and litigation and public guidance and really learning what everything else is, you know, everything else that's happening in Treasury.
• 4:38
  Lance: And so that's been a learning process.
• 4:40
  Lance: Um, you know, I went back and had a chance to look at my PD for the current position.
• 4:46
  Lance: It's very broad, but I think the one line that sort of stuck out is that you know, this position, the chief deputy position, will assist the state treasurer in the formulation and implementation of agency initiatives as well as policies and programs critical to the mission, to the mission of Treasury.
• 5:03
  Lance: And that's really what I'm focused on.
• 5:05
  Lance: Now that could be anything on a day-to-day basis.
• 5:08
  Lance: Um, so we have obviously big initiatives of modernizing our systems, continuing to provide great customer service.
• 5:17
  Lance: Um, but we also have issues that pop up from time to time.
• 5:20
  Lance: It could be litigation, like we've recently been sued um for the marijuana wholesale tax that we're implementing as part of the budget deal.
• 5:30
  Lance: Another thing we're taking a look at is economic development.
• 5:34
  Lance: So we have a relationship with the MEDC where we're continuing to look at some of the projects that are going through the MEDC.
• 5:42
  Lance: So we're taking a close look as part of our statutory obligation to consult with the MEDC on these projects.
• 5:48
  Lance: But we also know from the House and the Senate that they have ideas to bring additional economic development tools in terms of job retention or job creation to the state to replace some of the older antiquated statutory schemes we have now.
• 6:06
  Lance: So we're gonna spend a lot of time on that over the next two months.
• 6:10
  Lance: I think the goal, as stated by the legislature, is to get something done by the end of the year.
• 6:14
  Lance: So we're gonna have a lot of work to do over the next month and a half.
• 6:17
  Rachael: Right.
• 6:17
  Rachael: And I know the governor has shared that same goal, has expressed her same same goal of finishing by the end of the year.
• 6:22
  Rachael: And you brought up something there that I think is really important, people may not realize is that the process of analyzing treasury-related bills is extremely complicated.
• 6:33
  Rachael: There's a lot that goes into it from a legal underpinnings perspective, from an economic perspective, from a revenue perspective.
• 6:40
  Rachael: And we are really flagging and tracking these bills all through the process, whether or not, you know, there's a strong likelihood that they'll make it to conclusion or not.
• 6:48
  Rachael: But we want to be prepared and give feedback to policymakers as they're evaluating their proposals.
• 6:52
  Rachael: So I thought that was a really great point that you brought up.
• 6:55
  Rachael: Another unique thing about the chief deputy, which I find is one of these state government trivia points, is it's a role that's actually defined by statute.
• 7:04
  Rachael: Um, I'm not sure that any other deputy across the state of Michigan has that, but really it's kind of your own statutory office.
• 7:10
  Rachael: So it's kind of unique.
• 7:11
  Rachael: And I'm sure as an attorney, you must get a kick out of that.
• 7:13
  Rachael: Um, but as we think about you know, your experience as tax policy director, and what I always say when talking about the department is, you know, the 18 levels, which are these bureau director levels, are truly the engine and the driver of a lot of um what the work that we do because they're taking sort of high pol uh high-level policy guidance and translating it into implementation uh at the ground level.
• 7:38
  Rachael: So, how do you think that that experience really prepared you for making this transition uh into your role?
• 7:44
  Lance: Yeah, senior leadership, you know, sets a strategic direction for the department, but it's really the bureau directors that has to implement all that, do all the work, manage all the day-to-day stuff that's occurring throughout the department.
• 7:56
  Lance: And as a bureau director, I had the opportunity to lead a group that was conducting hearings, handling complex inquiries, refunds on the sales tax side, um, handling litigation, drafting guidance, analyzing bills.
• 8:11
  Lance: So I had the opportunity to sort of look at that, you know, relatively narrow slice of the Treasury Pie, but do it in a way that was sort of deliberate.
• 8:21
  Lance: And um I think I learned some valuable skills in that area because you're looking at very complex, important issues to the state, but you have to do it in a way where you're looking at the whole picture.
• 8:33
  Lance: Uh you don't always have all the time in the world, but you can't be so rushed that you miss issues or you're not looking at all sides of a particular scenario.
• 8:44
  Lance: But you need to do that, you need to analyze it, you need to come to recommendations, you need to execute those solutions.
• 8:50
  Lance: And I think those skills and that approach is the same thing you do at my current job.
• 8:57
  Lance: So I've I learned a lot as bureau director.
• 9:00
  Lance: I had a wonderful staff that really did all the work.
• 9:03
  Lance: Um and I just had the opportunity to grow in that role.
• 9:07
  Lance: And I'm I'm hoping that I can use those same skills, those same relationships, that same approach in my current role.
• 9:13
  Rachael: And I know that the other bureau directors really look up to you and uh appreciate the fact that you understand that you've walked in their shoes.
• 9:20
  Rachael: And I think that's a huge uh you know piece that's gonna benefit you in your leadership position here.
• 9:25
  Rachael: So, speaking of leadership positions, you've had a couple new ones recently.
• 9:29
  Rachael: In addition to the chief deputy role, uh you were also elected president of the Streamlined Sales Tax Governing Board.
• 9:36
  Rachael: Congratulations.
• 9:38
  Rachael: Thank you.
• 9:39
  Rachael: It's an honor.
• 9:40
  Rachael: Absolutely.
• 9:40
  Rachael: What does this role mean for Michigan?
• 9:43
  Lance: I'll answer that question by first describing a little bit about what Streamline's about.
• 9:46
  Lance: I mean, the Streamlined Sales Tax Governing Board, it's a multi-state agreement.
• 9:52
  Lance: There's 24 member states that work together to simplify sales tax collection across state lines.
• 10:01
  Lance: Um, it also makes it easier for remote sellers to pay tax into Michigan.
• 10:08
  Lance: Um, one of the early members of Streamline always said that one of the things you want to do is you want to make that money bag big enough that those out-of-state businesses can pay their tax and make it easier for you to collect.
• 10:20
  Lance: And that's exactly what Streamline does.
• 10:22
  Lance: Um, as president, I can sort of help make those efforts more efficient.
• 10:26
  Lance: I can certainly make sure that Michigan's voice is heard.
• 10:29
  Lance: And that's why I think one of the benefits of me being president will be next year.
• 10:34
  Lance: I mean, we've had other leadership positions in Michigan with Streamlined before.
• 10:38
  Lance: Dave Mateslki was chair of the state and local advisory committee for quite some time.
• 10:43
  Lance: And we had some streamlined compliance issues back then where Dave was able to get the agreement amended to make sure that Michigan remained in compliance.
• 10:53
  Lance: And I think I'm gonna have the same opportunity as president, maybe even more so, um, to sort of direct the focus of the streamlined organization over the next year and make sure Michigan's voice is heard.
• 11:06
  Rachael: And I am very happy to hear that you're involved with that organization because I think that's a critical voice uh for Michigan taxpayers and businesses and ensuring we stay in compliance and the benefits that come along with that.
• 11:16
  Rachael: One of those wonky organizations that probably most of our listeners didn't know about until just now.
• 11:20
  Rachael: So thank you for sharing.
• 11:22
  Rachael: So let's shift gears a little bit.
• 11:24
  Rachael: Uh the fiscal year 2026 budget cycle, which recently concluded, uh, as usual, had quite a bit, uh quite a few components that directly impacted Treasury, including several tax policy changes, including the transportation funding package, which is a sweeping set of reforms that touches on everything from motor fuel to marijuana to corporate income tax earmarks.
• 11:47
  Rachael: What role are we playing in implementing all these changes?
• 11:50
  Lance: I think it's an honor that the budget deal was passed on really the back of several new tax initiatives, all of which Treasury is critical in implementing.
• 12:02
  Lance: So I think that's sort of an honor that Treasury gets to participate there.
• 12:06
  Lance: But it is a major undertaking, and Treasury is the absolute center of its implementation.
• 12:12
  Lance: And it's not just about the tax code, it's also about making sure that our local roads are safer, commute is smoother, and you know, our community is stronger in general.
• 12:22
  Lance: But, you know, we have, as you said, the new marijuana tax, we have decoupling, we have coupling, and I can go into more detail about all those later.
• 12:33
  Lance: Um, we have the gas tax, sales tax swap, and we are continuing to implement the research and development credit that went into effect last year.
• 12:42
  Lance: So we are responsible for administering all of these new taxes, and it's a huge lift in terms of we need to interpret the statutes, we need to provide guidance to taxpayers so that they can, you know, comply with the law and take advantage of the incentives that are out there in terms of the RD credit, for example.
• 13:04
  Lance: But we also have to enact, you know, adopt new systems, change our forms, we have to, you know, just strategically plan how we're going to effectively administer all these new taxes in a way that the state gets the revenue it needs to balance the budget and to fund the roads.
• 13:19
  Lance: And but also taxpayers know what they're doing and the and they can easily comply.
• 13:24
  Rachael: And really the tax work is critical to helping the state realize its policy priorities and us driving that.
• 13:30
  Rachael: I I agree with you is a is a huge honor and something that I know that we all take very seriously in the department uh as we move our work forward.
• 13:37
  Rachael: So you mentioned the wholesale marijuana tax.
• 13:40
  Rachael: Let's talk about that a little bit more.
• 13:41
  Rachael: What's Treasury doing to implement this policy as enacted by lawmakers?
• 13:47
  Lance: So we are building out the systems and guidance needed to support licensees and ensure compliance.
• 13:53
  Lance: Uh, this includes defining wholesale pricing, setting up the return filing processes, working with the CRA or the cannabis regulatory agency to align our efforts and make sure because it's a highly regulated industry.
• 14:06
  Lance: So we have the tax piece, they have the regulatory piece, we need to work together.
• 14:10
  Lance: Um there's been a lot of speculation and misinformation out there about this tax, often raised by parties that are also um representing the marijuana industry in the lawsuit against us about this tax.
• 14:23
  Lance: So it's been a little bit difficult to have those conversations to iron those out.
• 14:27
  Lance: But I think broadly there was a really two issues that were raised.
• 14:32
  Lance: One was there was a incorrect belief that the tax was circular, because the way that they define the tax is sort of um includes any other tax on the product at the time that the tax is imposed.
• 14:45
  Lance: And there was this belief that it would just keep you just kept adding it back and back.
• 14:50
  Lance: So it's a tax and a tax and a tax.
• 14:52
  Lance: So we've clarified that via a notice that we published recently.
• 14:56
  Lance: There's also just the oddities of the marijuana market, I guess, is because a lot of these transactions earlier in the um in the chain uh might not be done in cash.
• 15:08
  Lance: Uh so it's done via credit or offsets between parties or related parties.
• 15:14
  Lance: This is gonna require a tax in that stage.
• 15:17
  Lance: And so I think there's a lot of concern in the industry about how they're gonna come up with the funds to pay that tax.
• 15:23
  Lance: So there's been a lot of explanation and guidance from us on how we think that can be done.
• 15:29
  Rachael: And you mentioned that there was a pending litigation.
• 15:31
  Rachael: I mean, what are we doing in the environment of that pending litigation?
• 15:35
  Lance: We are proceeding as normal.
• 15:37
  Lance: It's the law.
• 15:38
  Lance: We're required to implement this.
• 15:41
  Lance: It goes into effect um beginning of 26.
• 15:44
  Lance: So uh we have to proceed as if we're gonna win the lawsuit.
• 15:49
  Lance: Um, they are seeking an injunction in a lawsuit, so I guess in the event that they win on that front, it would require us to reevaluate things.
• 15:57
  Lance: But as of right now, you know, the statute requires this tax go into effect, you know, January 1, 2026, and we have to be ready for that.
• 16:05
  Rachael: Absolutely.
• 16:05
  Rachael: And I know folks all across Treasury are getting ready for that.
• 16:09
  Rachael: Uh and that wasn't the only big tax change, right?
• 16:11
  Rachael: You touched on the fuel changes, which are big issues as well.
• 16:15
  Rachael: What is that transition looking like?
• 16:17
  Lance: Aaron Powell So that's another complicated one that consumers won't necessarily see because the price that any of us pay at the pump after all of this goes into effect in 26 will be about the same as you pay now.
• 16:31
  Lance: Um but the big difference is that the motor fuel tax is being increased and the sales tax is being dropped off of fuel.
• 16:40
  Lance: And so those sort of offset one another, but that actually changes the the revenue stream and where those revenues go.
• 16:47
  Lance: For example, right now there's a 31 cent rate on motor fuel.
• 16:53
  Lance: Um for 26, that'll get bumped up to 51 cents and then be adjusted for inflation.
• 16:58
  Lance: So we're working on a notice that will be published shortly that will describe what that rate will be for 26.
• 17:05
  Lance: Um, but we also there's a floor stock tax, so we're gonna have to work with um you know gas stations and really any fuel retailers to make sure that the fuel that they have in storage as of the date that this goes into effect gets taxed and basically trued up.
• 17:22
  Lance: We're also handling the sunset of the sales tax on fuel, which requires us to backfill the school aid fund to keep it whole.
• 17:30
  Lance: But again, as I said, for drivers, the total tax at the pump is gonna remain the same.
• 17:34
  Lance: But the key difference is that starting next year, all the taxes you pay at the pump will go directly to road and bridge improvements instead of being split with other funds.
• 17:43
  Lance: So this has been sort of a long time coming.
• 17:47
  Lance: I think this has been discussed off and on over the years, but it's actually gonna go into effect next year.
• 17:52
  Lance: So we're excited about that.
• 17:54
  Rachael: Big changes, but as you said, you know, at the pump, it shouldn't make that much of a difference.
• 17:58
  Rachael: So a critical piece of the transportation funding plan uh included some earmarking from the corporate income tax.
• 18:05
  Rachael: What does that mean for Treasury?
• 18:08
  Lance: This is a pretty big shift in how we manage and forecast revenue.
• 18:12
  Lance: So we expect to earmark up to $1 billion annually from the CIT to the neighborhood roads fund between 29 and 30.
• 18:21
  Lance: That requires careful tracking and coordination with the budget office to ensure that the right amounts are deposited and distributed.
• 18:28
  Rachael: And we talked about this before.
• 18:29
  Rachael: Our uh Chief Revenue and Economic Forecaster, Eric Buses, has touched on how the corporate income tax has been an unpredictable tax to forecast.
• 18:38
  Rachael: And so I know that's something that we're gonna be watching extremely closely and making sure that we get the right dollars and the right funds where they go.
• 18:44
  Rachael: On that note, uh, with so many moving parts, how are we getting this done?
• 18:49
  Rachael: How are we ensuring transparency?
• 18:51
  Rachael: How are we ensuring accountability?
• 18:54
  Lance: We are definitely committed to clear communication, timely reporting, and modernizing our systems to handle these changes efficiently.
• 19:01
  Lance: We're also working with our, you know, our state stakeholders like the CRA and the Michigan Department of Transportation, amongst other partners.
• 19:10
  Lance: Um internally, we have sort of implementation teams.
• 19:14
  Lance: So everybody has a piece to get these new taxes across the finish line.
• 19:18
  Lance: You have Revenue Services has to develop systems and forms to make sure that people are able to pay their taxes and report the um statutory requirements properly.
• 19:30
  Lance: You have tax policy and order who are you know analyzing the statute, providing guidance and then making sure that the forecasts and numbers and revenue goes to the right place.
• 19:41
  Lance: Um we have TCB who's gonna then you know audit these taxpayers and make sure that they are complying with the statute.
• 19:48
  Lance: Um and so we have regular meetings scheduled really from now until post-implementation to make sure everything's getting done at the right time.
• 19:58
  Lance: So so far we're on track, but it's a big lift.
• 20:00
  Lance: This is a lot of new taxes all at once.
• 20:03
  Lance: And you know, we, you know, for example, in marijuana, even though the tax goes into effect January 1, 2026, we won't be ready to accept payments until sometime significantly later than that.
• 20:14
  Lance: So it's you know, communicating to taxpayers so they know what to expect, and then being ready to accept that revenue when we have the systems and the ability to do so.
• 20:25
  Rachael: And one last piece of the puzzle here, uh you touched on the words coupling and decoupling.
• 20:31
  Rachael: And I'm assuming you didn't mean that in the context of like celebrity couple marriages and divorces, the way that they do their press releases that probably has a technical tax name for it.
• 20:40
  Rachael: Would you share uh what those provisions were in the budget?
• 20:43
  Lance: So the way our corporate income tax and our individual income tax work is we pick a starting point on the federal code.
• 20:52
  Lance: So for corporate income tax, I think it's federal taxable income, and on the income tax side, it's AGI.
• 20:59
  Lance: So when there's a change at the federal level that impacts those starting points, that flows through to the Michigan side.
• 21:06
  Lance: So with um the one big beautiful bill act, which is hard to say, I just sort of usually say OB3 because it's shorter and it sort of flows better.
• 21:16
  Lance: But there were a lot of changes in that OB3 Act that impacted our revenue stream.
• 21:23
  Lance: And so what we did, what the legislature did was we uncoupled or decoupled.
• 21:29
  Lance: And what that means is basically we say, look, we're gonna calculate our tax as if the changes that the feds just made didn't really happen.
• 21:37
  Lance: Most of these are a timing change, so they have to do with depreciation schedules.
• 21:42
  Lance: So it's not necessarily that taxpayers won't get the benefit of those federal changes, but that those benefits will be spread over time instead of all happening in one year.
• 21:51
  Lance: But by decoupling from those provisions, we were able to preserve Michigan's revenue stream to support the roads and the projects that are part of the budget.
• 22:03
  Lance: And then the coupling part is there were also some provisions in the OB3 Act, which basically changed the way we tax tips and we tax overtime.
• 22:13
  Lance: And again, those changes would not have automatically flowed through because of the way they're calculated at the federal level.
• 22:20
  Lance: So we are basically coupling to those changes, like making sure that those changes at the federal level also work at the state level so that our citizens and our taxpayers get the benefit of those federal changes on the state side as well.
• 22:33
  Lance: But all of those are pretty significant changes.
• 22:36
  Lance: So again, we've got to implement them.
• 22:38
  Lance: It's a big lift, but we're we're on track.
• 22:41
  Rachael: And we'll continue to communicate as those as we work through all those processes.
• 22:45
  Rachael: Uh, I know that all of our listeners really enjoyed hearing from you, Lance.
• 22:48
  Rachael: I mean, at listening to you talk, you're an incredible, incredibly knowledgeable person in this area.
• 22:53
  Rachael: Uh, and that's been hugely helpful as we've gone to implement this budget year 26 deal.
• 22:58
  Rachael: From your new role as president of the Streamlined Sales Tax Governing Board to Treasury's work implementing the 2026 transportation funding package, it's clear that your leadership is helping position Michigan at the forefront of smart, sustainable public finance.
• 23:13
  Rachael: To our listeners, thank you for turning into Treasury Talk.
• 23:16
  Rachael: We hope that today's conversation gives you a better understanding of how Michigan is working behind the scenes to support local communities, modernize tax systems, and invest in Michigan's future.
• 23:25
  Rachael: If you'd like to learn more about the Neighborhood Roads Fund, the new marijuana excise tax, or any of the topics we cover today, visit Michigan.gov slash Treasury.
• 23:34
  Rachael: If you have any questions about these changes, email us at TreasuryOutreach at Michigan.gov or follow us on social media.
• 23:41
  Rachael: Until next time, take care and thank you for listening.