Michigan budget deal:
Exactly as scripted

Oct 8, 2007

After a long drawn out drama about a threatened government shutdown, the Michigan legislature and Governor Jennifer Granholm went ahead and did what they intended to do all along.

They increased the state income tax from 3.9 per cent to 4.35 per cent. They expanded the 6 per cent sales tax to cover more services such as landscaping and janitorial services. Then they agreed in principle to cut social programs, public services and school funding by 440 million dollars. And they declared that state workers – whose contract is being negotiated right now – will have to take cuts.

They did this all under the guise that the state had a “budget crisis.” They should know – they created it!

They were the ones who repealed the state’s Single Business Tax, just over a year ago. At the time, they did not replace it with anything. After a nearly year-long debate about what to put in its place, they passed a new business tax. The new tax included all the same tax breaks to the corporations as the old one had – but it added 600 million dollars in new immediate tax cuts to businesses, as well as billions more over the years.

It’s obvious, the politicians were too embarrassed to give business a break while raising our taxes, so they played out the “budget crisis” and the threat of a state shutdown for nearly a year.