Thursday, October 18, 2007

We did not need to raise taxes

Throughout 2007, Republicans (and some Democrats) have suggested various ways to make specific reductions and reforms in the state budget to pare down the size of government, without causing any serious interruptions in services. Now the Mackinac Center for Public Policy has published a compilation of Specific Recommendations to curb $1.358 billion in spending.
Replacing Michigan's New Taxes With Budget Reductions
According to research by the Mackinac Center:
  • Unemployment, at 7.5% is 60% above the national average.

  • Michigan is tied with North Dakota for the highest outbound migration rate.

  • Per-capita income, in a free fall since 2000, is now 7.8% below the national average.

  • Home values are plummeting; foreclosures are at their highest level in recent memory.

  • Private-sector wages are 18% below the public sector, on average.

  • Local and state tax burden is about 11th highest in the nation.

This is no time to raise taxes, yet, that is exactly what we did on October 1st.

The Mackinac Center for Public Policy just released a new list of specific recommendations to reduce the size of the state budget by $1.358 billion.  This number is exactly the amount of dollars the state would bring in with the two new taxes we just imposed, (income tax increase and new 6% sales tax on services). These are reductions that can be implemented immediately to negate the need for the $1.358 billion tax increase.
Congratulations to Jack McHugh from Mackinac for his work on this package.  In summary, here are the recommendations the Mackinac Center makes.
  • Department of Corrections: $136 million

  • "Economic Development": $90 million

  • Department of Human Services: $135.7 million

  • Department of Community Health: $82.2 million

  • Higher Education: $82.7 million

  • Primary and Secondary schools: $286.3 million

  • Dept. History, Arts, Libraries: $29.9 million

  • Other Departments and Programs: $211.3 million

  • Government-wide Economics: $303.9 million

Are all of these cuts easy?  No, some will be difficult, but all are possible.  Will everyone like  them? Of course not!  Some will be unhappy, others will howl with displeasure. K-12 education in particular will tell you there is no way they can endure cuts. But, for the long-term gain, we must ALL endure short-term pain.  Yes, that includes the legislature.  We should see a reduction in our pay and benefits.  It is called the Part-time legislature. (See earlier newsletter about that topic).
Please read the entire report on the Mackinac Center website.

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