Today, Governor Granholm is going to release the budget, taking the step of delivering it in person to lawmakers. Gongwer is reporting that it will "propose extending the sales tax to services, lowering the tax to 5.5 percent and using the new revenue generated to eliminate the $423 million shortfall in the School Aid Fund and eventually scrap the Michigan Business Tax surcharge". The DNews hedged its bets, but is indicating the same thing.
Granholm has billed her budget as the final piece of her strategy to pull Michigan out of the economic doldrums. Granholm unveiled a government reform plan Jan. 29 that would save $450 million through cuts to state employee benefits and other measures; and she called on lawmakers in her State of the State address last week to restore funding for the vanquished Michigan Promise Scholarship and the popular Pure Michigan advertising campaign.
Previously, Granholm has talked favorably of reducing the Michigan Business Tax and making up for lost revenue by applying the state's sales tax to some services, a plan supported by Business Leaders of Michigan, a group that represents some of the leaders of the state's largest employers and universities.
The budget plan appears to be along the lines of what business leaders have been clamoring for (no spammers for that line, please), and something that the public would agree with. Just in case people need visual proof, let's recap the polls taken during the past year and remind the screaming teabagger crowd that they are in the minority on this issue: Poll after poll after poll has shown that the public is in favor of tax increases to solve our budget woes, period, end of story, get it done.
5/26/09: Graduated income tax favored 60-33, with 37% saying they "strongly favor". Film credits rated as a "good idea" by 70-21.
9/25/09: Voters disagree with Bishop's cuts only budget.
64 percent of voters support some level of revenue increases to balance the budget. The most popular revenue options cited were the elimination of $600 million in corporate tax exemptions (66 percent), implementing a graduated income tax (61 percent), and expansion of the sales tax to cover non-essential, luxury items (59 percent).
10/19/09: Gongwer/EPIC poll shows 62% of voters thought "some revenues should be used to solve the budget problem". Break that down into categories:
Asked what revenue solution they would favor, 25 percent said a graduated income tax, 21 percent said extending the 6 percent sales tax to services, 17 percent said lowering the sales tax to 5 percent and extending that to services, 11 percent said eliminating tax breaks for corporations, and 9 percent said enacting an estate tax. Another 17 percent said they did not know.
As for a constitutional amendment on a graduated income tax, 54% would vote yes and another 5% were leaning yes.
12/1/09: This EPIC poll came after the budget cuts to schools, and showed some dramatic results. 92% said the budget was in a "crisis" situation, 75% supported tax increases to balance the budget, 51% said they were less likely to vote for a legislator that opposed restoring funding to schools. Big numbers.
An overwhelming number of Michigan residents, 79%, oppose the current $400 million cuts to local public schools and 83% would be against even deeper cuts next year if revenue doesn’t increase.
As to how they would raise taxes:
A 49% plurality supports expanding the 6 cent sales tax to include services not currently taxed. The poll also found that a majority of 77% favors reducing tax breaks and loopholes for corporations, and a 65% majority would support a graduated income tax.
On the graduated income tax, they were asked about putting it to a ballot vote. 59% said "yes" and 6% were leaning "yes".
Let's go back to that Kellogg Foundation experiment from last month that included deliberations on the idea of tax increases.
• Support for increasing the sales tax increased from 37 percent to 51 percent and was opposed by 9 percent after deliberations.
• Support for boosting the income tax went up from 27 percent to 45 percent, and opposed by 20 percent.
• Support for cutting business taxes increased from 40 percent to 67 percent.
• Backing for increasing the beer and wine tax was high before and after discussion, from 66 percent to 68 percent.
"The public is willing to sacrifice, willing to invest, willing to pay the cost. However they demand transparency, accountability and different results," said Anne Mosle, vice president of the Kellogg Foundation.
And one last poll - voters just recently indicated that they are against the Mike Bishop's plan of simply cutting state employee pay and benefits.
How many more polls do we need to see? The public wants this problem fixed, they are willing to increase taxes to do it, and they have disagreed with the Senate Republican's solutions, both last year and now this year. So what's the problem? Take it away, Phil Power:
That's the obvious, common-sense solution — and it is something that is anathema to many in the dysfunctional political culture we have today. Most Lansing insiders I talk with guess there's only a 10 percent to 20 percent chance our political leaders will get anything far-reaching done this year. Instead, they say, they'll pass some form of "continuation budget," kick the can down the road and leave the people who take office next year to clean up the mess. There are two words for this, and they go together: Appalling is one. Stalemate is the other.
We have Senate Republicans such as Jansen, Hardiman, and as of yesterday, Ron Jelinek, mouthing the words that they would be open to the solution of service taxes. But looming in the background is "No-No" Nancy Cassis, Mike Bishop and his pledge to the teabaggers, and the ever-present Republican strategy of breaking the government only so they can turn around and use it against the Democrats this fall. Power includes praise for Granholm and Dillon on their ability to compromise - which makes Mike Bishop stand out like a sore thumb.
Best as I can figure it, the Republican political playbook goes this way: Oppose any compromise whatsoever with Granholm/Dillon and the Democrats. Then savage them for failing to get the job done.
Beyond the obvious hypocrisy involved, failure to act to solve Michigan's financial problems merely makes those problems that much worse for the millions of citizens who have every right to ask their leaders to stand up and lead for the common good.
After three years of Mike Bishop's behavior, the public should realize what is going on, and to some extent they do. But to really drive the point home, Democrats need to STAND UP and call this out for what it is: Obstruction for political gain only. Learn it, use it, say it often. You're seeing it happen in Washington now, you've seen it happen here for years - and now it's up to the Democrats to stop being afraid of taxes, and start fighting for the future of Michigan.
Take another dive this year, and those voters who want this solved will NOT support you in November. You can guarantee it.