For Immediate Release
May 15, 2020
Despite CREC outlook, lawmakers need to find ways to invest, not cut
Policymakers must learn from mistakes of the last recession, budget cuts and Flint water crisis
LANSING—The Michigan League for Public Policy issued the following statement on the state Consensus Revenue Estimating Conference held today and COVID-19’s impact on state revenues and upcoming budget decisions. The statement can be attributed to Michigan League for Public Policy President and CEO Gilda Z. Jacobs.
“It took the state years to recover from the 2009-10 recession, which caused substantial fallout for schools, local governments, state infrastructure and public health. The impact of reduced revenues and related cuts, ‘cost-saving measures’ and degradation of our infrastructure led to the Flint water crisis and became the focus of negative national attention, damaging our state’s reputation and economic growth. The cuts during the great recession also worsened racial and income inequities in Michigan, an impact that has been laid bare by the COVID-19 crisis, with more exposure and deaths in African American communities and the economic instability of essential workers.
“Policymakers in Lansing must learn from their predecessors’ mistakes. Despite the gloomy revenue outlook, it is bad for the economy and our residents to address the revenue losses through deep cuts, especially to the areas our residents and businesses depend on most like quality schools, safe roads and water systems, and dependable health, economic and work supports. We simply can’t cut our way to prosperity or health.
“Michigan lawmakers are faced with the challenge of reconciling these major revenue losses while—we hope—shoring up programs like unemployment insurance, food and cash assistance and other health and human services needs. In the coming weeks and months, policymakers need to make decisions that preserve economic opportunity and growth over time, and ultimately shorten the recession. To do so, they should: continue to invest in healthcare, early and K-12 education, and economic supports like child care, unemployment, food access and housing; tap into the state’s $1.2 billion rainy day fund, saved for crises just like this; push on a bipartisan basis for greater flexibility with current CARES Act money for states and additional federal assistance tied to state economic conditions and revenue shortfalls; and finally, be prepared to improve Michigan’s tax system to raise needed revenues.”
For years, the League has been advocating for more state revenue and sound investments in the things all Michiganders value in its annual state budget analysis and advocacy. The COVID-19 pandemic and related economic strain certainly changed the context of this conversation, but as the League outlined the state’s key policy needs related to COVID, revenue was a focus there as well—and will continue to be in the League’s work in the weeks and months ahead.
The COVID-19 crisis and its adverse impact on people of color, both in contractions and deaths, have again brought to light significant and concerning racial inequities in Michigan and around the country. These racial disparities stem not just from historical policies but from the more recent state disinvestments and cuts following the last recession, and policymakers must continue to focus on policy decisions and budget investments that reduce or eliminate these inequities, not perpetuate or expand them.
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.