My state senator, Glen Anderson, hosted a town hall meeting this evening to discuss the budget proposed by GOP governor Rick Snyder. He had a few of his House and Senate colleagues from nearby plus officials from area school districts. The primary speaker was Ellen Jeffries, director of the Senate Fiscal Agency, the non-partisan group that oversees the budget process (such as telling the budget committees, "According to projected revenue and the current laws, this is how much money you have to work with for next year's budget.").
I won't bore you with the details and the 20 charts she included in the handout. Here are the parts I found relevant. For the Fiscal year 2011-2012…
Eliminate the Michigan Business Tax removes $1,420 million from the budget. Everyone hates the MBT, so I'm not sorry to see it go. However…
New flat rate corporate income tax raises only 460 million. Yup, that's a difference of a billion dollars.
How is that difference made up? Michigan budgets are required to be balanced.
Personal income tax increases by $665 million.
School Aid Fund (separate revenue stream) shifted to include community colleges and state universities (so the general fund doesn't have to): $896 million. And that is after chopping 15% from universities.
The two add up to more than $1 billion because of various other adjustments.
The decrease in business tax and increase in personal tax is even bigger in FY 2012-2013.
Yes, the transfer of tax burden from corporations to individuals is huge.
Will allowing corporations to keep more money result in more corporations coming to Michigan or in more corporate hiring in Michigan? No.
Companies choose where to locate based on many factors. Tax environment is only one of them. Another big one is the health of the education system and we're doing our darnedest to gut that.
One of the other speakers was Sen. Phil Cavanaugh, who is the top ranking Dem on the Revenue Committee (the one that works out who gets taxed by how much). He asked several business leaders about the corporate tax cut. They all said it would be a bonus to them and would have no effect on whether they hire more people.
Sen. Anderson is the top ranking Dem on the Budget Committee. Since the committee (and the senate) has a GOP majority he isn’t much more than a spectator to what the committee does.
The rest of the meeting was to hear from the various school board representatives talk about how the K-12 cuts would affect them. I heard the guy from the Wayne-Westland School District (which isn't mine) get started and figured the rest would be about the same. So I didn't stay. The core of his message was, "We simply cannot cut that deep."
Snyder wants all school employees to pay 20% of their medical insurance. These cuts would require them to pay 50% and also put 40 students in each class.
Snyder has said he wants districts to implement efficiencies without spelling out what he means (combine districts?) or giving districts time to determine or implement the changes.
My area is mostly Democratic so the opening speechifying (thankfully short) about how each elected official thinks the gov's budget is wrong got loud applause. There was only a little bit of recognition that, alas, their disapproval won't have much effect in the final outcome. Tell my Rep. and Senator how displeased I am with the gov's budget? They were in the room telling me they agree. That leaves the governor himself.