By Staff
Michigan's budget is under significant stress, there's no argument about that, and like my family and yours, during these difficult times the state must prioritize spending priorities to live within our means.
We have tough choices to make and, without question, these choices will affect us, and our children, for years to come.
With all the talk of budget deficits and the sacrifices that people are being asked to make in order to invest in their future, why does the State of Michigan spend more money each year than we did the year before?
In fact, over the past four years the governor's budget has increased from $39 billion or so in her first year to the proposed $43 billion plus for FY 2007-08, so Michigan still has an approximated $900 million budget deficit.
In Gov. Granholm's latest budget submission to the Legislature, she proposed that in order to balance the budget Michigan should add a new 2 percent tax on over 80 diverse services offered throughout Michigan.
Services such as auto repair, legal help, bowling, cable or satellite TV, veterinary, haircuts, diaper and funeral services would all be punished. According to the governor's budget plan, her so-called "two-penny" tax would take an estimated $1.5 billion out of the pockets of Michigan residents.
Where would all of this extra revenue go? To about 17 proposed new or expanded programs. But that is not the worst of it, because necessary programs with proven value will also be curtailed to meet these extravagant expenditures.
In a time of financial struggle, we should work together as a state to face our problems head on and pay our existing bills, not increase taxes and fees to start up new programs.
The governor's State of the State address included a pledge of bold restructuring and spending reductions, but a 2-percent tax that would increase the burden on the average person does not follow that philosophy.
Instead it penalizes Michigan middle and lower income citizens who are already vulnerable, by increasing people's cost of living without increasing their income so that they are more at risk than ever before.
This 2-percent tax on services potentially targets small, family-run companies, and will also likely chase away entrepreneurs and younger workers who find the cost of living becoming too high. Furthermore, businesses that are already located in the state may come to the realization that neither they or the consumer can foot the bill for the new tax, and that their only way out may be to leave the state entirely. Both of these consequences would affect Michigan's work force and would lower our tax base, affecting our economy as a whole.
The recession is not hitting just one group of people or industry; everyone living in our state feels it everyday. We are challenged with the foreclosure of one in every 63 homes each year, and the loss of a job every 20 minutes in Michigan.
We all need to work on a compromise to provide the best solution for our residents.
Michigan's budget situation is unstable and a mix of strategies may need to be employed to get our economy back on track.
I am not convinced that this proposed level of tax increase is the answer to our problems, and in a recent conversation I had with the governor, I did make it clear that a tax increase will negatively affect the constituents of my rural district, and that I could not support such a measure.
However, I also made it clear that I am still very willing to work with the governor and my colleagues in the Legislature to insure a strong economy leading to improvements in the health and happiness of all Michigan citizens.
I welcome citizens' ideas on how local government and state funded bodies might be able to save money while still delivering vital services.