Finley: Little tolerance for new taxes in Michigan
Gov. Gretchen Whitmer will release her first budget today, and it will contain a number of ambitious new spending initiatives to address Michigan's pressing needs.
There's no question Michigan has dual crises in infrastructure and education. If we don't fix our roads, we won't be able to compete for jobs and investment.
Likewise, Michigan's ranking as a Bottom 10 state in education achievement makes it more difficult to attract and keep good paying jobs.
Local communities are also crushed by legacy costs revenues will no longer meet, limiting the quality of services they can provide to residents.
These are all problems that demand solutions — and there are others as well. But they can't all be solved with higher taxes.
Michigan residents simply don't have the resources to absorb massive tax hikes.
I've advocated for a tax increase to fund road repairs, and Whitmer reportedly will call for a 45 cents hike in the fuel tax. That will be painful for motorists, but necessary. Michigan has neglected its infrastructure for so long that there's no painless fix. The hike will give Michigan the highest per-gallon fuel costs in the Midwest, but we have to do it.
But beyond that, how much more taxes can Michigan residents tolerate? Very little, if any.
Whitmer is expected to propose a $507 million hike in K-12 school spending, well above the anticipated $376 million increase in 2020 school aid revenue. I'm interested in hearing where she intends to get that money, while also fulfilling her ambitious promise to offer free community college and university tuition assistance. Will that require a tax hike as well?
We also learned this week that legislative leaders are open to reworking Prop A, the 1994 ballot initiative that slashed property taxes in exchange for a higher sales tax and other levies, and then capped increases at the rate of inflation. Local communities complain the cap has prevented them from recovering revenue lost when property values plunged during the Great Recession.
That's true. But here's something else that hasn't bounced back from those dark days: household income in Michigan.
In 2005, real median household income in Michigan stood at $57,930. Today, it's roughly $55,000, and is nearly $5,500 below the national average.
So, yes, state and local governments have suffered because tax revenues have not kept pace with expenses. But so have Michigan residents whose paychecks remain below pre-recession levels.
They've had to learn to live on less, and to make some very hard choices in the process.
Michigan ranks 26th among states in total tax burden - not bad until you consider it is 33rd in household income and 15th in poverty.
Can we in good conscience ask them to dig deeper into their pockets for local governments that have resisted cost-cutting steps such as consolidation and rationalizing retirement benefits? Can we justify transferring more money from taxpayers to schools that haven't adopted accountability measures and are delivering failure, despite receiving more in tax revenue, as measured by personal income, than any other states besides Vermont and Wyoming, according to the Mackinac Center for Public Policy?
Michigan taxpayers aren't stingy. Time and again they've approved millage hikes to better fund their communities and schools, despite their waning personal finances.
Whitmer said on WDIV-TV's Flashpoint program Sunday that the word taxes "has been vilified." That may be true. But it's also true that Michigan residents have suffered financially more than those of any other state over the past two decades, and they're not yet living so fat they can cough up substantial new tax dollars, no matter how worthy the cause.
That's not a matter of political ideology. It's about being able to take care of themselves and their families.
Catch “The Nolan Finley Show” weekdays 7-9 a.m. on 910 AM Superstation.