As the deadline for a final 2020 state budget approaches, we urge lawmakers to address head-on the dire need for revenue in our state.
Over the past several years our lawmakers, as seen through their budgets, have been largely silent on the need for revenues. Instead, they have prioritized tax cuts and shell games instead of investing in the things Michigan businesses and residents really need—safe roads, high quality education and skilled workers.
The ongoing failure to address revenue has resulted in an alarming situation. In fact, our General Fund revenues are below 1968 levels when adjusted for inflation. Michigan needs to make some major investments in order to become a strong force in the 21st century, yet we have less money coming in than we did 50 years ago.
Beyond the general fund, inflation-adjusted school revenues are below 1995 levels when Proposal A was put in place. And while Michigan’s needs in infrastructure, education and other areas have continued to grow, lawmakers have opted to ignore the need for revenues that will make investments in these areas possible.
Raising taxes is the one tough choice that House and Senate leaders have been unwilling to make at this point in the budget process. Gov. Gretchen Whitmer’s budget included significant revenue increases to help improve and maintain the state’s roads and other infrastructure and to improve the K-12 education system, while aligning funding streams and providing increases to other key areas of the budget.
To help workers with low incomes and to put more money into local economies, the League supports the Governor’s plan to double the state Earned Income Tax Credit (EITC). This move, while not a full restoration of the state EITC to 20% of the federal credit, will go a long way in helping working families make ends meet.
Building a stronger Michigan can’t be done by cutting corners. We hope the House and Senate will consider the importance of revenue when it comes to investing in our state.