Apr 27, 2015
The following is the transcript of a talk given at the April SPARK public meeting in Detroit.
We are here today to talk about Proposal 1, the tax increase proposal, which is on the ballot, in fact the only thing on the ballot, for the May 5th election. You may have heard governor Snyder and other politicians say how this extra money is needed: For the roads especially, but for other things too.
So let’s start with the roads:
Yes, it is true, money is needed to fix the roads. No one in their right mind would dispute that. If you travelled here today from any distance, you drove over disintegrating roads. For example, do you ever drive over the Rouge River Bridge on I-75? If so, you didn’t have to wait for the news reports to know it’s in terrible shape. But that is only one of many problems with the roads.
It’s no exaggeration to say that 12% of all bridges in Michigan – 1100 bridges – are in immediate need of rebuilding, which is what the news media reported recently, three times as many as in 2000. Or that 38% of all roads in Michigan are in poor shape, meaning they have to be completely rebuilt, and 42% in fair shape, meaning they need major repairs. Just look at your own route to work. It’s a struggle every day to get your vehicle where it’s going without blowing a tire or breaking an axle!
There is also no dispute that Michigan needs increased funding for public transportation. The bus system is horrible where it exists at all. Just look at the embarrassment over the issue of the “walking man,” James Robertson, who is as hard working a person you will ever find, yet he had to walk 21 miles a day to work due to the lack of any real public transportation in the region and the lack of good, well-paying jobs.
So, all that being said, yes, of course, money needs to be spent to fix roads, bridges, public transportation, and more. The whole national infrastructure of our bridges and roads seems to be falling apart.
The question then becomes, why are the roads in such a mess? It is due to a lack of maintenance over a long period of time. Roads don’t go bad overnight. It takes many years of neglect to get to the disaster we have today.
Quite simply, not enough money has been spent to maintain roads and bridges for YEARS. And today, Michigan spends less on its roads per capita, that is compared to the number of people, than any other state in the country. That doesn’t mean other states have roads in good shape – it just means Michigan has disastrous roads.
So why is there no money for roads? Michigan is a wealthy state, and it has some of the biggest corporations in the world centered here. There should be enough money to keep up the roads.
But Michigan doesn’t pay to keep up its roads and bridges because the Democrats and Republicans have been giving away billions of dollars to big business. It’s very simple. The money handed over to corporations is money that isn’t spent on roads – and many other things we need, like schools. The money the corporations DON’T pay in taxes is money that CAN’T be spent on the population’s needs.
You may remember when Governor Snyder came into office, he promised to cut taxes to businesses. That’s one promise he kept – to the tune of cutting taxes for businesses by 1.7 billion dollars in 2011.
Yes, he did – and he raised the money to pay for that enormous tax cut to business, by increasing taxes on retirees, increasing taxes on low wage workers, cutting tax deductions for children, and cutting the amount ordinary people were refunded for property taxes. All of that came to a total of 1.4 billion dollars more in taxes on us, so the corporations could have their taxes cut. But even that wasn’t enough to keep up with what was cut in corporate taxes. So that’s why it didn’t pay for roads, schools and many other things.
That’s not all. More tax breaks are just coming to light. Those breaks, which were hidden from sight, date back to the Republican Engler administration and the Democratic Granholm administration. They’re only coming to light now because companies are cashing in on them now. They are called MEGA grants. No one even knows the exact amount, but the best estimate so far is that these tax breaks are worth 11.7 billion dollars promised to 240 companies. Keep in mind, these are on top of other tax breaks given in previous years and Snyder’s 2011 tax cuts for these same companies.
The state will lose more than 800 million dollars just this year alone from these hidden tax breaks – which is almost 10% of the state’s total General Fund budget for the year. And the state will keep losing this money year after year, all the way up to 2029.
That’s why the roads are so bad, and why, by the way, there isn’t enough money for schools, Medicaid, emergency services, public services, and other things funded by taxes, like libraries. One administration after another in the state has been giving away money like it’s going out of style.
The politicians always claimed that tax breaks and tax cuts for business would create jobs or save jobs. That’s a big fat lie.
Here is one example that hit the news last year, how companies lie about jobs to get tax breaks, and what it means for you and me. Most of you have probably seen the Marathon refinery, downriver, if you drive down I-75 on the southwest side of Detroit. In 2007, Marathon got 175 million dollars in tax breaks from the city of Detroit and the state of Michigan, on the promise they would specifically create jobs for Detroit residents. In 2014, a study was done on the results. Marathon got the 175 million, but there were exactly 15 more Detroit residents working there than before. That comes to exactly 11.6 million dollars per new worker. They might as well have just given the people the money!
Another example of corporations trying to hold us hostage for OUR tax money: this was just in the news last week. General Motors wants MORE tax breaks from the city of Warren and the state, for the GM Tech Center in Warren. Just remember, they make it sound so simple, it’s just a tax break. But the money has to come from somewhere. It’s not robbing Peter to pay Paul. It’s robbing us to pay General Motors. It’s not Robin Hood, but it’s Robbing the Hood.
Forbes magazine – a magazine written especially for business – had this to say about jobs and tax breaks: “The history of job creation tax credits in Michigan is a story of corporate welfarism.” That is EXACTLY right.
It’s a lie, when they say that tax breaks create jobs. What they do is create MONEY for the corporations, big money.
They are telling you today that they need you to pay for the roads. They really do want YOU to pay, they want YOU to vote for Proposal 1 – because they gave away the bank to all the big rich corporations. They gave away what they should have been spending on roads.
Of course, they don’t put it quite that way. They tell you to vote for Proposal 1, so you can have safe roads. They tell you to vote for Prop 1 so that schools will have more money, and localities starved for funds will get more revenue sharing from the state.
So, just for a minute, let’s look to see what’s in this referendum on the ballot May 5.
If you vote for Proposal 1, you will actually vote to authorize or amend 15 laws that you don’t see on the ballot. And those laws will do a lot more than just provide some money for roads.
First of all, sales taxes will go up from six cents on the dollar to seven. That is a 16% increase in the sales tax. We will pay more for almost everything we buy. That’s just like a pay cut – our paycheck won’t go as far. And a flat sales tax like this hits people with low wages the hardest – those of us who are already scraping just to get by.
But that’s not all. We will also pay more for gasoline, because taxes on gasoline will go up. Another hit to our paycheck.
We will pay more to register a car. And people who itemize on their Federal Income Tax will lose a deduction they used to be able to use for their car registration fee – so that also will cost people more money.
Part of the money currently going to the regular Kindergarten through Grade 12 school fund from now on will be allowed to go to privately run for profit business schools – which means another hit to school funding.
The state roads fund for counties and townships can be forced to contract out more of the road work currently done by their own employees – which means, to give that work to some company making a profit by paying lower wages.
Railroads, which are required by law to fix railroad crossings, are to be given a three million dollar a year subsidy to fix their own crossings – which means three million dollars a year will be deducted from state road funds, local road funds and public transit.
You may also hear from some politicians that there are some GOOD things in this proposal for common everyday people. Such as an increase in the Earned Income tax credit. That is true. But what they don’t tell you is that this is just reinstating some of what we lost in Snyder’s 2011 tax increase for us – and they didn’t increase other credits tied to that.
They tell us that if we pass Prop 1, we will see better roads. Not any day soon. For the first two years, the biggest share of the money going to roads is actually going to pay off the banks for debt service on past projects. In the first year, at least two thirds of the money, if not all, will go to the banks.
But even if some money does go to roads, the question is, which roads? One of the projects on their drawing board is to widen a six-mile stretch of I-94 coming in from the east side – to the tune of 2.7 BILLION dollars, and a lot of neighborhoods torn up. And why? To funnel people from the suburbs downtown to the stadiums.
They tell us that Proposal 1 will increase money to the schools and to local city services. In fact, while some parts of the proposal will increase money to the schools and local services, other parts will cut money going to the schools and local city services.
They pretend that mass transit will get an increase in funds. Maybe. But which mass transit? On one project, more than 137 million dollars is being spent to put in just over 3 miles of mass transit that will mainly be used by people going downtown to the stadiums and other places – like that, when much MORE is needed just for people to get to work, and in the neighborhoods.
I come back to where we started. Yes the roads need to be fixed, and the bridges need to be rebuilt, yes the schools need more money.
We say that it’s only common sense that the big corporations that got all this money from the state, should give some of it back so roads can be fixed, schools can have more money.
But you don’t see any of those thieves lining up to give money back, do you?
And you don’t see many politicians proposing a radical idea like that. No, they come back to their same old refrain. They want us to pay more.
Why should we? We already paid for the roads and schools in our state income taxes, our gasoline tax, our sales taxes, our property taxes.
They hold these bad roads over our heads like a bludgeon, they make no repairs, they let the potholes get worse, they let bridges crumble more – it’s nothing but extortion, trying to get us to do what we KNOW we should not do.
It would be a big mistake to vote for Proposal 1. It would be an invitation to the politicians to come back and try to take more from us.
Governor Snyder was asked what will happen if Proposal 1 fails. He said he didn’t know because there is no Plan B.
I have one simple answer to what Plan B could be – let those who HAVE THE WEALTH pay for the needed infrastructure and public transportation repairs!
Of course, it’s true, that just voting NO won’t stop them. They’ll look for another way to get their hands on more money from us. They’ll put it back on the ballot again. They’ll let the roads rot even more.
They won’t stop coming for us until we back them off. And it will take a lot more than a vote to back them off. It will take a real mobilization of working people in this country to push back.
But one thing the NO vote could do, it could show just how many people in this state are fed up, how many are unwilling to go on paying the cost so the big corporations and the wealthy can get wealthier still.
A big NO vote could show just how many people there are – people who don’t agree to pay the cost any more, people who could be a force in the future.