LANSING – Gov. Jennifer Granholm said Friday she could not support a petition drive to accelerate the end of Michigan’s Single Business Tax without knowing how to generate $1.8 billion that would be lost from the tax. In response, Oakland County Executive L. Brooks Patterson called the governor’s comments a “cop out,” and labeled the tax “heroin” for administration officials.
Granholm said she would not support what could end up shifting $1.8 billion in revenues to consumers. It would “be irresponsible” to propose an end to the SBT without having a way of making up the revenue, Granholm said.
Presuming the petition drive Patterson has launched could generate the signatures needed to put the proposal on the November ballot, the Legislature constitutionally has 40 days to approve or reject the proposal exactly as written. As an initiated act it does not face a gubernatorial veto.
Granholm said she wanted to work with Patterson on SBT alternatives. She said she wants to work on changes to the state’s business tax, which would be job one of the state’s new treasurer. But if no replacement revenues are adopted then officials will have to decide which prisons would be closed or how much more in tuition students would have to pay, she said.
Patterson said developing replacement revenues is a separate action from “wiping the slate clean” of the SBT.
“We’re letting the professional legislators and policymakers develop an appropriate business tax to encourage development, not punish it,” Patterson said. “I would think most officials would welcome this historic opportunity.”
To say there has to be a plan in place to recoup the lost revenues is a “cop out,” he said, adding the SBT’s $1.8 billion in revenue is “like heroin, and the administration needs its fix.”
Patterson said he recognized that businesses in Michigan must pay “their fair share” of taxes, and suggested that would be at a level of $1.3 billion. To make up the difference the state could adopt a variety of cuts, including privatizing the state’s teacher health care system, he said.
So far the reaction he has gotten to the proposal has been positive, Patterson said, “except for those people addicted to the heroin.”
Liz Boyd, Granholm’s press secretary, called Patterson’s allusion to the revenues as heroin “an astounding statement.”
“Anyone suggesting replacing $1.8 billion is a cop out isn’t the person responsible for making sure the public education system stays intact or that vulnerable citizens don’t lose health care,” she said. “The buck stops with the governor. To eliminate the SBT without a plan for replacing the revenue would be completely irresponsible.”
The administration is not married to the SBT, and wants to revise the state’s business taxes, Boyd said. Officials also had to remember that since 1999, the state is collecting $1.7 billion less in revenues a year because of tax changes, Boyd said.
Both Boyd and Granholm said Patterson had backed her 2005 proposal to restructure the SBT. But Patterson said he did so because “it was the only game in town,” and the only part he really supported was the provision for the 21st Century Jobs Fund.
The petitions are now being printed, Patterson said, and he hoped to begin collecting signatures within a week. He was not having the petition form reviewed by the State Board of Canvassers because there wasn’t enough time. “It’s a risk,” he said.
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