Granholm budget proposal: Cut $2B, hike taxes $1B Bottled water, tickets to live events and pop out of a vending machine would be taxed and smokers would pay more under a budget plan Gov. Jennifer Granholm released for the first time Tuesday.
The plan calls for nearly $2.2 billion in budget cuts, $1.09 billion in tax hikes and tax credit reductions and about $2 billion in federal stimulus money spending in the next two years.
But fellow Democrat and House Speaker Andy Dillon, in a rare public clash with the governor, called the plan "showboating" and "theatrics" and said it has "no chance of passing."
Granholm's plan is one of the proposals offered in budget talks. She and legislative leaders will work behind closed doors to strike a deal before the new fiscal year starts Oct. 1.
Under her plan, Granholm would cut government spending by 12 percent and reduce business tax loopholes -- including controversial film credits -- by a similar proportion.
As previously reported, the governor would raise the cigarette tax by a quarter to $2.25 a pack; assess the 6 percent sales tax on tickets to live entertainment, vending machine sales and service contracts such as landscaping; and slap a 1 percent tax on bottled water.
No one has enough money to go to live entertainment venues anymore, only the economically deprived are still smoking so in effect it's a tax on the working or non-working poor only, put a 10 cent deposit in bottled water instead of a 1% tax like every other bottle in Michigan and finally I guarantee only the middle or lower class are using vending machines, I almost never see an Onassis or Kennedy at the pop machine.
In exchange, she proposes phasing out the 22 percent Michigan Business Tax surcharge over three years, beginning in 2011. Revenue sharing that local governments use to fund police and fire protection and other services would lose $74 million.
Get rid of police and fire funding.....sheer brilliance...is she nuts?
Also, $22 million would be squeezed out of the governor's pet 21st Century Jobs Fund used to attract business, ( which never worked ) and $12 million would be trimmed from a pot used for road improvements ( which to anyone who lives in Michigan knows, we have the worst roads in the country, so this never worked either ) to support economic development, state budget officials said.
The governor does not propose any reduction in the $4,000 Promise Grants for students who complete statewide high school exams and go on to college. ( because to a state that is already losing over 50% of it's college graduates to other states this would be the death nail to anyone staying in actually unable to move from the state.)
The document does not detail how the tax hikes and spending cuts would affect individuals, but a 1 percent tax on a $1.50 bottle of water would be a penny and a half; a 6 percent levy on a $50 Red Wings ticket would amount to $3.
In the school aid fund, the governor is proposing $290 million in cuts each year ( just how much did the Michigan lottery make last year? ), according to state Budget Director Bob Emerson. Divided by the state's 1.6 million students, that amounts to $181 per pupil in each of the two budget years. The state would use $800 million in federal recovery cash for school aid, budget officials said.
The Lottery was established under the authority of Public Act 239 of 1972 to generate funds to support Michigan’s public school system. The first lottery ticket was the Green Ticket which went on sale on November 13, 1972. On October 7, 1975, the first instant game ticket was sold. Online sales began June 6, 1977 with the introduction of the Daily 3 game. The first multi-state ticket sales for the Lottery were on August 31, 1996 for The Big Game (now called Mega Millions). Since its inception, more than $14.5 billion has been contributed to the School Aid Fund.
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Senate Majority Leader Mike Bishop, R-Rochester, has called for the governor to reveal her budget-balancing plan for weeks. She said this proposal has been on the table in talks with legislative leaders since Aug. 6.
"We have a lot of cuts, some loophole closings and some reforms that will not result in savings for this year," Granholm said after a grand opening ceremony for an IBM applications center at Michigan State University.
Granholm and legislative leaders are working against an Oct. 1 deadline to balance a budget that is $2.8 billion out of whack. Leaders are looking at a similar hole in 2011.
I can figure out HOW it happened...mismanagement by the Granholm administration, it's easy enough to fix, Granholm is at her term limit, that should fix this fairly quickly.
Had she not been positioning herself for a position in the Obama administration and actually trying to do something with the state's financial problems we might not be in quite so deep, but we'll never know...What job will you have in the Obama administration after your tenure as Governor Ms. Granholm?
Will it be worth the level on destruction you have asked this state's citizens to own under your terms?
Matt Marsden, spokesman for Bishop, said the budget balancing can begin in earnest.
Why didn't budget planning begin...oh I don't know...about 4 years ago?
"We were asking her to come out from behind closed doors. If she's finally done that, great," Marsden said.
Granholm said the House was preparing to pass budget bills starting today. But Dillon said that's news to him. "The governor should know that showboating a proposal that has no chance of passing is not a way to solve the state's fiscal crisis," he said. "All parties need to ... get back to the hard work of negotiating a budget solution." AMEN!
The Senate has passed $1.2 billion in budget cuts, including elimination of the Promise Grants and reductions to many human services programs. And the exodus of citizens continues.
The spending reductions laid out in Granholm's document add up to $464 million in the budget year starting Oct. 1 and $518 million in the following fiscal year. But Emerson said these cuts are in addition to the $500 million in cuts the governor proposed in her budget plan in February. The spending reductions would be carried over to 2011.
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.
She would cut the film credit by 12 percent, or $7.8 million in 2010 and $19.8 million in 2011. Filmmakers qualify for a 42 percent tax credit, and the 12 percent cut would bring that to 37 percent. Other tax credits would be reduced by $130 million in 2010 and $156 million in 2011.
The film making industry is the ONLY industry even slightly interested in giving Michigan a chance and for all intents and purposes seems to be bearing fruit....yeah slash that brainiac.
Her plan calls for a liquor license fee increase, a fee for allowing bars to stay open extended hours, a doubled tax on tobacco products other than cigarettes ( which will only effect the people too broke to buy actual rolled cigarettes and are attempting to save a few bucks by rolling their own, yeah lets get those dimes from the poor too...what a lame excuse for fiscal capability this decision is.) and a freeze in the amount of personal exemptions from the state income tax. The exemption, indexed to inflation, is $3,600.
What happens in neighborhoods where people foreclose?
The city raises taxes on the remaining citizens, more people foreclose because of the tax hike, then more leave...its a ineffective paradigm.
Now just extend that same faulty logic to the state level like Jennifer Granholm is doing.
What happens? People leave and taxes go up.
If I can figure it out why can't they?
Cough up your $3,600 bucks folks, oh you don't have a job?
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