In Budget, News Releases, Tax and Budget

LANSING—The Michigan League for Public Policy issued the following statement on the special Consensus Revenue Estimating Conference held today. The statement can be attributed to Michigan League for Public Policy President and CEO Gilda Z. Jacobs.

“Today’s revenue estimating conference is a classic case of ‘good news, bad news.’ The good news is that the revenue estimates are up and the 2021 budget deficit is down. But the bad news is that this could deflate the urgency and near-universal appreciation for the state’s revenue needs, poising some lawmakers to push for drastic budget cuts instead—drastic budget cuts that previously led to the Flint water crisis, rundown schools and crumbling roads.

“As today illustrates, COVID-19 continues to be the lens lawmakers need to see everything through. Most importantly, state lawmakers need to continue to call on Congress for comprehensive, flexible fiscal relief to alleviate the pandemic’s impact on residents and the state budget. But policymakers also need to reevaluate the billions of dollars in ineffective corporate tax breaks that pick winners and losers at a time when all businesses are struggling. They need to reexamine our state tax code and see if it’s doing its true job—sustaining our state’s and residents’ primary needs—and work to make it fairer for those with lower incomes, many of whom have been essential to our economy, our communities and our daily lives these past few months. And amidst this revenue crunch, as they should every budget year, policymakers need to prioritize the investments, programs and services that help our most vulnerable and the people who are struggling the most—due to COVID-19 and beyond.”

BACKGROUND:

Recent polling by the State Innovation Exchange found that “By a three-to-one margin, voters believe Michigan state government should invest more in its residents to ensure they are safe, healthy, and economically secure (58 percent) rather than state government keeping taxes low and cutting funds to key services like education, unemployment, and health insurance (18 percent). As for how legislators should address the potential budget shortfalls due to COVID-19, respondents overwhelmingly favored closing corporate tax loopholes (90 percent) and increasing taxes and financial penalties on companies that pollute Michigan’s air and water (88 percent). There is also strong support—77 percent—for  increasing taxes on the wealthiest individuals in Michigan.”

A report from the Michigan League for Public Policy, COVID-19 Crisis Highlights Need for More State Revenue, urges lawmakers to address the state’s lack of revenue in order to avoid a deep economic crisis brought on by the current COVID-19 pandemic. The report’s revenue recommendations include:

  • Advocate for additional federal relief that is flexible and tied to state economic conditions and COVID-related revenue shortfalls.
  • Take maximum advantage of the state’s Countercyclical Budget and Economic Stabilization Fund, also known as the rainy day fund.
  • Ensure that corporations are paying their fair share for the services that support their businesses.
  • Modernize the state sales tax to reflect the current economy and the growth of the services sector.
  • Reform the state’s estate tax by decoupling it from the federal estate tax.
  • Reform Michigan’s personal income tax to make it more progressive and based on the ability to pay.
  • Reevaluate the effectiveness of tax expenditures.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

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