In Blog: Factually Speaking

When I heard that Congressional republicans are working on a budget that cuts vital services that our most vulnerable residents rely on—like Medicare, nutritional programs, and other anti-poverty programs—not to mention other programs all Americans use, I didn’t have to think long before I remembered my warnings from the end of last year.

The significant, deficit-increasing tax cuts for profitable corporations and wealthy individuals will ultimately harm services we all rely on.

Turns out, I’ve actually had a lot of experience predicting this. Michigan’s recent history of favoring tax cuts over investment has resulted in a state with underfunded K-12 education, unskilled and untrained workers, decaying roads, water that is unsafe to drink, lead in our homes and a widening gap between the “haves” and the “have nots.”

man with boxing glovesGovernor Snyder recently signed into law the budget for the next year. To be honest, it was at best “meh.” Yes, there were a number of good investments: continuation of the “heat and eat policy”, an increase to the school clothing allowance for children receiving cash assistance (which the League has long advocated for), a fairly significant increase in the per-pupil payment, and a bit more money for adult education (again, a League priority). However, there were a lot of missed opportunities—notably an increase to the already paltry cash assistance grant and increased access to child care assistance. In addition, in 2020 the state will likely start taking away healthcare from Healthy Michigan recipients who are unable to find work.

Again—and sadly—this is nothing new. Over the years, we have seen the state’s increasing reliance on federal funds, the shifting of School Aid Funds away from K-12 public schools to cover the costs of the state’s universities and colleges, and policy decisions that have resulted in a very huge drop in the number of very poor children who can receive any state assistance.

Instead, the state has prioritized cutting taxes instead of investing in Michigan’s people.

From the 2011 tax shift, to budget-busting legacy business tax credits that will cost our state around $600 million per year for the next decade or more, to the repeal of the personal property tax, to triggered income tax rate cuts, to small property or sales tax exemptions, to the increase in the personal exemption (which the League opposed), the Legislature nicked and slashed away at our state coffers. At the same time, the state has shifted money around–$600 million general fund for roads and $900 million from K-12 to higher education, among other shifts—in order to avoid raising taxes.

Unfortunately, in order to become an attractive state to businesses and residents alike, we need to start making investments. The state has offered significant tax cuts to help encourage out-of-state businesses to come to Michigan, and some haven’t come because we lacked the infrastructure and the people power to make it work. Low taxes clearly aren’t the key motivating factor (in fact, Michigan’s not even a high-tax state already). Investment is the key—and to do that, Michigan needs to look at some revenue-raising, progressive tax changes.

People have been left out of the ring for far too long, and it’s time to change that.

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