LANSING – While criticism has rained down on Gov. Jennifer Granholm’s proposed 2010-11 budget, and its call to expand sales taxes to services, she questioned on Thursday whether legislators could come up with the votes needed for a cuts-only budget.
But in talking to reporters after an event at the Capitol, Granholm still said there would be some value to legislators developing a cuts-only proposed budget.
“I think it’s important for people to see what a cuts-only budget would look like,” she said. Doing so, legislators and the public would see the effect an all-cuts budget would have on services, especially education.
Granholm called for reducing the sales tax rate from 6 percent to 5.5 percent and extending the tax to most services. Most of the revenue raised would go to the School Aid Fund.
If new revenue is not raised, then schools would see cuts of $250 a student, she said. That cut would come on top of cuts the state had to enact to education in the current 2009-10 budget.
When unveiling her budget proposal, Granholm had said she would not back any more cuts in education, whether at the K-12, community college or higher education level.
“I honestly don’t think they would have the votes for a cuts-only budget because it would be so devastating to public education as they are in the middle of grappling with” the cuts already enacted, she said.
House Speaker Andy Dillon (D-Redford Twp.) has said the budget should focus on reforms and restructuring first before any tax increase is sought. Republicans have blasted the budget proposal strongly signaled no appetite to raise taxes.
The sales tax proposal Granholm has outlined is expected to be revenue neutral by 2013 once the Michigan Business Tax surcharge is phased out.
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