LANSING – The Michigan budget for has now made its way through one chamber of the Legislature. But interest groups say there is still far to go in being sure that the final products protect both taxpayers and needed state programs.
Some want to be sure that the Legislature actually does the work.
The key battleground still appears to be over how much of the expected deficit is addressed with cuts and how much with tax increases.
Business groups would like to see the balance swing toward cuts. “The most positive thing is there was no proposed tax increase,” said Mike Rogers with the Small Business Association of Michigan. “Less than half of small business owners think their sales are going to increase in the next year. It’s very difficult for them to understand why they should be expected to help balance the state budget.”
Rich Studley with the Michigan Chamber of Commerce said a tax increase on business would be particularly poorly received because businesses are now understanding that the Michigan Business Tax will bring in as much as $220 million more than the Single Business Tax would have (though the bill does provide for refunds of excess revenue for the first couple of years).
“Any proposal to raise taxes on the business community, the reaction of our members would be extremely negative,” Studley said.
But he said it was a positive step that the budget process was moving again given that waiting on some of the cuts and reforms proposed could mean they would not provide the savings needed to balance the budget next year.
Keith Ledbetter with the Michigan Infrastructure and Transportation Association, which represents road builders, said the state at this point is left with no choice but to raise taxes for highway maintenance and construction.
“The gas tax just isn’t bringing in the revenue that it once was,” he said. The group has proposed a fuel tax plan that would raise some $1 billion a year, though he said the actual need is about $2.7 billion a year.
The extra funding is needed not only for the direct roadwork, but also as a lever to bring in more federal funds. “Congress says you’ve got to help yourself out some” before it will authorize more funding to each state, he said.
For schools, the key is ensuring that the money they budgeted for materializes, said Tony Derezinski with the Michigan Association of School Boards. While the state budget has yet to be approved.
“We were hoping our appropriation would keep pace with inflation,” Derezinski said. “We would certainly hope that’s kept in mind when that gets over to the Senate.”
David Bertram with the Michigan Townships Association said the bills approved Wednesday and early Thursday are actually not of much help to his members because they don’t reflect revenue realities. He noted that sales tax revenues have been dropping and yet the budgets did not include a corresponding cut in constitutional revenue sharing. And he said there was some question whether the proposal to pass Lottery advertising revenue to local governments was constitutional.
“It appears like we’re going to have to wait and see what the leaders agree to,” he said. “From this we can’t tell our local governments to budget anything.”
Sharon Parks with the Michigan League for Human Services was more pessimistic about the budget actions so far. “I think the whole thing was a farce last night,” she said. “It’s the end of August, we have a huge deficit facing us and they’re just not dealing with it.”
Parks said the current year budget was largely composed of one-time fixes and borrowing from the coming year, a situation that cannot be repeated in the budget. “We’ve got to have a responsible budget and we’ve got to have decision making that takes into account the very serious structural problems we have,” she said. “That just really is going to require leadership that we don’t see being exercised right now.”
In the end the key barrier seems just to be getting an agreement, whatever that might entail, said Todd Anderson with SBAM. “It seems like there’s so much unknown,” he said. “There aren’t the votes for a tax and there aren’t the votes for a spending cut.”
Studley said the final product needs to be one created by the Legislature. “Everything they need to do they can do through the budget process,” he said. “We’re trying actively to discourage this idea of postponing the day of reckoning by passing the buck to voters.”
A number of ideas have surfaced that would require voter approval, such as allowing electronic gaming devices at horse tracks.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
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