Gov. Jennifer Granholm today released her budget proposal for the next two years that call for $982 million in budget cuts, $1.09 billion in tax increases and tax credit reductions and nearly $1.2 billion in federal stimulus money spending.
The proposal cuts state government spending in the general fund by 12 percent and reduces tax loopholes by the same percentage.
Senate Majority Leader Mike Bishop, R-Rochester, has been calling for the governor to make her plan public. She said this proposal has been on the table in closed-door negotiations with legislative leaders since Aug. 6.
So, we've had a whole month with a plan on the table, and no action from the legislature. Very interesting.
Want some numbers?
Her plan calls for $684.8 million in tax credit reductions and tax increases in the budget year that starts Oct. 1 and $662.9 million in the 2011 budget year.
As previously reported, she would raise the cigarette tax by a quarter to $2.25 a pack, assess the sales tax on live entertainment, vending machine sales and service contracts such as landscaping and slap a 1 percent tax on bottled water. In exchange, Granholm proposes phasing out the 22 percent Michigan Business Tax surcharge over three years, beginning in 2011.
She would also cut the film credit by $7.8 million in 2010 and $19.8 million in 2011 and other tax credits would be reduced by $130 million in the coming budget year and $156 million in 2011.
Define "other tax credits". Wait, nevermind, maybe it's better if you don't. The liquor license fee increase is still on the table, as is the fee for bars to operate extended hours. Also out there is a freeze on personal tax exemptions, and a reduction on the EITC.
In other words, a little bit of pain for everyone, but that is probably better than a whole lot of pain for just certain groups of people.
The most interesting thing about this is the elimination of the MBT surcharge. Will the Republicans turn down an offer to make that go away, after they have spent the better part of the past two years complaining about it? Are they serious about "compromise", or are they going to stick to the "all cuts" budget?
Stay tuned...