Update: 13 May 2011
Tax changes lock-in reduced revenues for schools and other public services
In a dramatic series of votes yesterday, the package of tax changes proposed by the Governor emerged from committee in the Senate, passed on the floor of the Senate (with a 19-19 tie broken by the Lt. Governor), was sent over to the House where it passed there as well. The Governor is expected to sign the bills shortly.
With this rapid-fire move, the legislature has essentially closed off any option of looking at new revenue to support schools, at least for the foreseeable future. Because of a spending item inserted in the bill, it will be exempt even from a statewide referendum. The bills eliminate the Michigan Business Tax and replace it with a Corporate Income Tax that brings in $1.1 billion less in revenue for next year – an effective tax cut of $1.1 billion in FY12 and $1.7 billion in FY13.
Some of this revenue loss will be made up with taxation of all pension income of new retirees, a 70% cut in the Earned Income Tax Credit, and the elimination or limitation of many other personal tax credits.
What this means is that any moderation of the cuts to schools will have to come from cuts in other areas or luck in tax collections.
The Senate voted to reduce the Governor’s cuts to K-12 education (to $340 per pupil rather than $470), but “paid” for that with cuts to community health, human services and corrections spending. The House approved a version which cuts about the same dollar amount as the Governor’s proposal, but does so on a percentage basis – so that higher-spending districts will see a larger dollar cut than lower-spending districts.
These bills are now in conference committee, where a small group of legislators will have unprecedented freedom to re-negotiate virtually every aspect of the budget. Once a deal is struck, the bills are typically approved very quickly.
Now is the time to make your voice heard and insist that the School Aid budget should invest in schools rather than undermining them! And paying for schools by pushing more children into poverty is a lose-lose proposition for our state.
The school aid budget bills coming out of subcommittee in both the state House and the state Senate still don’t reflect the values of the people of Michigan and still call for huge cuts in K-12 public schools. Instead, our lawmakers have turned the budget into a shell game, with the burden of budget cuts being shifted around to quiet our citizens.
- Do we want to “reinvent Michigan” by continuing to undermine public schools, our best hope for the future?
- Do we want to hold on to a little more for our schools by cutting programs which help the most vulnerable members of our communities?
- Shouldn’t we at least be talking about alternatives that might allow us to adequately fund our schools without pushing more children into poverty?
For Michigan to be a place where our children want to live, we need to work together today to invest in our communities and our state. We also need a state budget that reflects that common commitment.
Tell your representatives what you want for the future of our children and our state!