LANSING ? Turning Michigan’s economy around into a growth economy is the “single most important issue” that will face lawmakers and other state officials in the next session, Senate Majority Leader Ken Sikkema (R-Wyoming) told reporters on Tuesday.
He repeated his earlier argument that doing so will require the state to rethink how it writes its budgets. And while he repeated his pledge that the state would not raise taxes to keep the 2005-06 budget balanced, asked if the state would cut taxes as some business groups have called for, Sikkema said it would be a victory just to avoid raising taxes during the fiscal year.
During the 92nd Legislature from 2003 to 2004, the state enacted a number of proposals to help businesses – including a proposal to cut the add back of the cost of health benefits to a company’s single business tax by 50 percent – which will help the state in the long term, she said.
But those are still not enough to turn the state’s economy around.
“We are not well positioned to turn Michigan into an economic growth state,” Sikkema said. And while the state will have to do more to rebuild its economy, there is no single silver bullet that will turn it around. The budget has to play its part in helping Michigan become more competitive, he said. “Two years of duct tape, Band-Aids and gimmicks” was enough in dealing with the budget, he said.
That brought up the issue of what the state spends on Medicaid as an example of budgetary choices that do not promote economic growth. Sikkema on Monday had blasted the state’s spending on Medicaid, saying it was hurting the state’s economic development.
“You cannot continue to pour money into Medicaid with no significant changes and divert funds from higher education and K-12 in the ’06 budget,” Sikkema said.
Over the last four years, Medicaid expenditures have risen nearly 31 percent, while K-12 education spending has been flat and higher education spending is down, Sikkema said.
Gov. Jennifer Granholm’s administration said the state has actually saved money on Medicaid expenses, and Granholm said she would not support cutting services to vulnerable recipients. The growth in Medicaid spending has also tracked the increase in caseloads since the economy declined in Michigan, they said.
The Michigan Democratic Party also issued a statement blasting Sikkema’s criticism of Medicaid spending, saying that Sikkema was acting as the Republican attack dog on Granholm in advance of the 2006 election.
This story was provided by content partner Gongwer News Service. To subscribe, click on Gongwer.Com
