Gee - why didn't anyone else think of that? Raise taxes in the midst of not only an economic recession, but an outright depression here in Michigan. Brilliant! Peter Luke of The Lansing Bureau via MLive has this: Reducing tax credits could be solution for Michigan's lawmakers afraid to cut spending, raise taxes. He starts out with the ridiculous implication that replacing a car tire from pothole damage is tantamount to a tax increase (amongst other implications) because roads are in such bad shape. (no mention that the gas tax is being diverted in part to other priorities)
Not exactly tax increases. But in each instance, people are taking financial hits because Michigan cannot balance its budget. Even though it is constitutionally required.
There are at least two ways to do that: Cut spending on health care, education, transportation and public safety, or raise taxes directly.
It is becoming clear among some Senate Republican lawmakers that the $450 million sliced out of the budget this month is about as much as they want to cut. And there is no mood for another broad-based tax hike.
Get it? It's the minority Republicans fault! ala Tim Skubick! In fact, there are plenty of more cuts to make.
For instance, the Mackinaw Center for Public Policy has a whole slew of recommendations, many of which I touched on in this prior post. In a different prior post, I pointed out this one:
$1,210,532,500 Family Independence decrease by 31%
That by itself would almost do it. What is family independence? Simple. It's code for WELFARE! (did you know it costs us an obscene $4 billion annually?) Cut the welfare by about a third and the budget hole is fixed. There. Done. No police cuts, or cuts to physicians and hospitals, or local governments. It would be a simple, small bill. Of course, welfare recipients are a core constituency of the Democrat Party. How about these:
Adopt the Hay Group report recommendations on rationalizing public school health insurance, including requiring co-pays and preferred provider networks. This could save: $422 million.
According to a Rio Grande Foundation report, if 5 percent of prisoners are placed in privately-managed prisons, the state saves 14 percent on overall prison spending because government-managed prisons have an incentive to "sharpen their pencils." Savings: $192 million.
Cut transit funding in half. By eliminating protectionist regulations that restrict alternatives, empty buses driven by public employee union members can be replaced by private sector innovations like jitneys, commercial van pools, "call-and-ride" services, car-sharing and more. This will improve service for transit users at a much lower cost: $112 million.
The state spends almost $15 billion on Medicaid and welfare, more than $6 billion of which is from state taxes and fees. Medicaid in particular is a command-and-control monstrosity rife with perverse incentives. Reforming it in ways that give recipients an incentive to economize and take better care of themselves could save hundreds of millions of dollars, while actually giving recipients greater freedom and choice. If just 1.6 percent of the expense in these two programs could be reduced in this way, the state would save: $240 million.
Thousands of private sector workers have given back painful wage and benefit concessions to save their jobs. The average state employee receives salary and benefits worth nearly $75,000, compared to approximately $58,000 in the private sector. Comparisons of specific job classifications produce similar comparisons. State workers should be grateful for their much greater job security and benefits, and more than willing to assume some of the burden through concessions. $300 million.
There are many more, but those are the ones that stuck out to me - partly due to the big savings. Further, undocumented and potentially fraudulent child care payments would amount to another $250 million. Medicaid coverage restrictions about $100 million. Etc, etc. How Luke can't see any of these is beyond me but all put together would not only fill the budget hole for good, but would lower tax rates throughout the state. Luke goes on:
Lawmakers do have one more option, talked about for years but never seriously tried: Reducing or eliminating tax credits, some of which have been fixtures in state law for decades. All told, they add up to more than $35 billion. One of the biggest chunks is nearly $10 billion the state forgoes by not applying the sales tax to services.
Trimming the tax credits could fund more state aid to cash-strapped local governments for roads and cops.
Credit reductions, moreover, could be temporary until the economy improves and a closer examination reveals which are worth keeping and which ones no longer serve their purpose.
It all would require more bipartisanship than Lansing may be capable of, but the principle is simple.
Uh - how is the economy supposed to recover if Lansing breaks its kneecaps with a lead pipe? And the principle is simple - tax our way to prosperity. Just one problem - IT DOESN'T WORK!!! Hello? I don't know what's in the water in Lansing, but it is laced with some form of taxyouupthewazzoo pathogen. Meanwhile, we maintain an oversized and overbearing state government spending far beyond its means year after year mostly on social engineering. Stop that and problem solved!
