Michigan has finally passed a road improvement bill! Gov. Rick Snyder started calling for it four years ago, pegging the price of good roads at $1.2 billion a year. But the legislature, with a good chunk of them supporting a no new taxes pledge, couldn't seem to get it done. Yeah, there was that crazy attempt at a package of bills, including new taxes, that went before the voters. But that was so convoluted with gimmies for everyone that the voters roundly rejected it. So the legislature – after a change in personnel (there's that term-limit thing here) – went back to the beginning and tried again.
What they came up with is a big budget bomb.
On the good side $0.6 billion will be raised through a gas tax and vehicle registration fees. Yes, new taxes. But that will be ramped up slowly, not raising the full annual amount until 2018.
The other $0.6 billion comes from unspecified cuts to other things in the General Budget. And that won't happen until 2019. Why not next year? The delay means that all the legislators who approved this mess will, because of term limits, be gone and not have to be accountable to the mess.
Michigan's General Budget has already been through the wringer. One of many reasons: A few years ago the business tax code was "simplified" (read: canceled). That severely cut the budget, which by state law must balance. And here comes another round of forced cuts.
The biggest parts of the state budget are education, revenue sharing for cities to pay for public safety, and healthcare. The rest of the budget is too small to absorb a cut of $0.6 billion. So the top three get cut again. And again.
Once again, it is the poor who will lose out. They get stuck with a bad primary education and can't afford college, even if they could get in. The availability and affordability of healthcare is cut. The police and fire departments cannot keep up with the crime.
Snyder crows that the state economy is growing, so there will be more revenue and the hole in the state budget won't be that big. It's still bad finances and education and healthcare will still be cut. But there is one more goodie in this plan. If tax revenue increases faster than inflation than income tax rollbacks go into effect. So even if the state economy grows, the state budget can't.
So, let's see. The state roads are a mess. The money to fix them won't get to half strength until three years from now. It won't rise above half strength until at least four years from now. And then there will be forced cuts to things that poor people depend on. In the meantime the roads will continue to be a mess. And the perpetrators will be long gone – safely transitioned into lobbying jobs.
Quite the bomb.