Lawmakers in Lansing have been debating a fix to Michigan's budget crisis for several months. While the Fiscal Year 2007 budget is balanced, that for Fiscal Year 2008 (which begins October 1) is not.
A key sticking point in budget talks has been whether to raise taxes. Tax hikes aren't an easy pill to swallow, but neither are poor schools, lousy healthcare, or more potholes.
So to make the tax-hike pill easier to swallow, here are some facts about tax policy in the Great Lakes State for you to ponder.
- In February, a bipartisan panel said that Michigan "must develop a fiscal plan that includes a combination of revenue increases, spending cuts, and reform of how public services are delivered." (emphasis added)
- For someone earning $50,000 per year, Michigan's income tax is the eleventh lowest in the country (including sttaes which have chosen to fund their revenues through means other than income taxes).
- State spending is lower now than anytime since 1974, following several years of budget cuts.
- Governor Granholm has cut business taxes nearly one hundred times since becoming governor.
- It's not like the state wastes your taxpayer dollars. Michigan has been ranked the third-best-managed state in the nation by Governing Magazine.
- Wall Street is watching. Citing uncertainty surrounding the state's budget, particularly with regards to the elimination of the Single Business Tax, Standard & Poor’s recently dropped Michigan’s credit rating. This rating affects Michigan’s ability to attract businesses and create jobs.
- Raising taxes isn't all that unpopular either. The people of Michigan believe a tax increase is needed as part of a solution to the budget crisis.
- The Chamber of Commerce also supports a tax increase. The Chamber, people, the Chamber!
- Republican Kalamazoo County Administrator Don Gilmer recently told the Detroit News that "Taxes are the price you pay for a civilized society."
- Well, we need a tax hike right now. Without tax increases, funds for cities and counties are often cut, often resulting in jobs for firefighters and police officers being cut. This not only hurts the economy, it can also cost lives.
- Still unconvinced? Without tax increases, funding for education is often cut. This results in higher tuition for college students, cuts to programs in K-12 schools, and layoffs in both.
- Finally, it's not like Republicans are completely opposed to raising taxes. When John Engler was governor, the sales tax was raised from 4% to 6%, the gas tax was increased by two cents, and the cigarette tax jumped fifty cents - not to mention numerous fee increases.