It's been a rough week of mortgaging Michigan's future.
To console themselves, patrician politicians are partying with the powerful up on Mackinac Island for the Detroit Regional Chamber of Commerce's annual shindig.
One thing is clear. In the grand, face-saving façade known as the 2007 budget deal, Democratic Gov. Jennifer Granholm whiffed.
She knew it was crammed full of one-time fixes and accounting tricks — the very shenanigans she fingered her predecessor, John Engler, for using in the '90s that got us into this mess.
She knew borrowing against future investments would cost the Mitten State millions.She knew they were just shunting the problem to next year.
What's worse, she could have spared higher education and economic development by inking a deal with the GOP months ago — before the deficit blew up to $800 million.
She knew better. Period.
Yes, legislative Republicans knew all this, too. But they've already shown more loyalty to rabid, out-of-state anti-tax groups than to their constituents or sensible fiscal policy.
And unlike neophyte Senate Majority Leader Mike Bishop, Granholm has been to the bargaining table before. After her landslide re-election last fall, she vowed she would lead.
We're waiting.
The governor was off to a good start in January, appointing the blue-ribbon, bipartisan Emergency Financial Panel to make hard-nosed recommendations for the state's long-term problems. Well, she gave the report a cursory look, kind of like President Bush did to that of the Iraq Study Group.It's tough to say whose approach has failed more spectacularly.
Displaying a vexing blend of bluster and timidity, Granholm talks loudly while carrying a small stick. After her 2-cent tax on services proposal went down in flames, she seemed content to let House Speaker Andy Dillon come up with a better idea.
And rather than battle for health care, public safety and schools, the governor figured she could live to fight another day. Maybe she can save them by squeezing a modest tax increase out of Bishop for 2008.Maybe not.
A brilliant orator, Granholm will continue to paint the other side as evil-doers bent on shuttering schools and tossing the sick on the street, because of Republicans' medically untreatable compulsion to cut taxes.
That's an easy fight to win. Michiganders are increasingly horrified by budget cuts, with 70 percent willing to swallow tax hikes even in a dismal economy.
But the most important question is: What do you stand for, governor?
You say you support middle-class Michiganders. Will you restructure the state tax code so the clerk at Meijer doesn't pay the same income tax rate as Dick DeVos?
You say a college education is essential. Will you actually increase funding to state universities?
You say you support business innovation. Will you promise not to lay a hand on any more of the 21st Century Jobs Fund money?
You say health-care coverage is critical for citizens and saves us all money. Will you finally get a universal access plan passed?
Take some time on paradise island to answer these questions and craft a new plan.
Then do us a favor. Stop blaming the GOP and get it done.
Showing posts with label graduated income tax. Show all posts
Showing posts with label graduated income tax. Show all posts
Saturday, June 2, 2007
Saturday, May 26, 2007
Not all tax pain is created equal
Pop quiz: If you're married, have two kids and make $57,000 per year, you're:
A. At the federal poverty level.
B. At the median household income for Michigan.
C. Now spending 92 percent of your salary on gasoline.
If you said C, you're off by several percentage points — but not as many as you'd hope.
If you answered B, you're right on the money. The poverty level for four actually is about three times less — $20,650 per year.
If you said A, you're probably a politician whose handlers forgot to feed you the correct answer on that and how much a gallon of milk costs.
Most of us know $57,000 ain't bad. We don't have to pick up staples at the food bank and sleep at the homeless shelter. But our hard-earned dollars don't stretch as far as they used to. We worry about losing our homes, filling our tanks at $3.65 per gallon and having our kids get priced out of college.
We know Michigan's in trouble just by looking at our drained bank accounts and nonexistent retirement plans.
Nonsense, argues Charles Ballard, a Michigan State University economist. The Great Lakes State is on a roll.
The past 30 years have been good ones for folks who probably flunked the means test above — those 100,000 or so households out of 3 million in Michigan. If you're looking for signs of recession, don't meander through the pristine enclaves of Okemos, East Grand Rapids and Bloomfield Hills.
Households making $166,000 per year or more — to put that obtuse richest 5 percent in real dollars — have been able to build McMansions and buy Mercedes, even as the Big Three implode and state budget deficits balloon.
Actually, the well-to-do are doing even better, thanks to tax cut after tax cut over the past 12 years. But money to keep kids vaccinated and police on patrol has to come from somewhere.
And it has — from you and me. Each cut has shifted the burden to those who work on the assembly line, teach young minds or are retired on a fixed income.
Ballard sums up Michigan's tax system, which is one of the most regressive in the nation, like this:
"What you have is the top 5 percent doing fabulously well, the top 20 percent ($92,000 household income) doing quite well and the other 75 percent struggling."It's a massive widening of inequality ... and nobody is talking about it."
A lot of leaders in Lansing don't get it. It's not just that they make a minimum of $79,650 per year. It's that many of them don't send their kids to public schools, don't ride the bus to work and don't worry about medical bills because they have the best plan money can buy.
When Gov. Jennifer Granholm blasts the pain of budget cuts, it's a pain she doesn't directly feel.
When House Minority Leader Craig DeRoche complains he can't sell his second house in tony Novi as proof that Michiganders can't afford a tax hike, he's out of touch.
What they need is more input from the majority — the struggling 75 percent — so they can pound out a budget with fairer taxes and better services.
But since hamstrung policymakers don't seem eager to invest in their constituents, we would do well to invest in ourselves.
Not just by voting for local millages to keep fire stations and schools up and running. But by socking away as much as we can, so our kids can go to Harvard like the governor, or study at the Sorbonne like Senate Majority Leader Mike Bishop.
Yes, even tuition at our world-class state universities has spiraled out of control, but they remain the best boot camp for the next generation of leaders.
And with the rate of progress in Michigan, they'll likely get stuck with plenty of problems to solve.
A. At the federal poverty level.
B. At the median household income for Michigan.
C. Now spending 92 percent of your salary on gasoline.
If you said C, you're off by several percentage points — but not as many as you'd hope.
If you answered B, you're right on the money. The poverty level for four actually is about three times less — $20,650 per year.
If you said A, you're probably a politician whose handlers forgot to feed you the correct answer on that and how much a gallon of milk costs.
Most of us know $57,000 ain't bad. We don't have to pick up staples at the food bank and sleep at the homeless shelter. But our hard-earned dollars don't stretch as far as they used to. We worry about losing our homes, filling our tanks at $3.65 per gallon and having our kids get priced out of college.
We know Michigan's in trouble just by looking at our drained bank accounts and nonexistent retirement plans.
Nonsense, argues Charles Ballard, a Michigan State University economist. The Great Lakes State is on a roll.
The past 30 years have been good ones for folks who probably flunked the means test above — those 100,000 or so households out of 3 million in Michigan. If you're looking for signs of recession, don't meander through the pristine enclaves of Okemos, East Grand Rapids and Bloomfield Hills.
Households making $166,000 per year or more — to put that obtuse richest 5 percent in real dollars — have been able to build McMansions and buy Mercedes, even as the Big Three implode and state budget deficits balloon.
Actually, the well-to-do are doing even better, thanks to tax cut after tax cut over the past 12 years. But money to keep kids vaccinated and police on patrol has to come from somewhere.
And it has — from you and me. Each cut has shifted the burden to those who work on the assembly line, teach young minds or are retired on a fixed income.
Ballard sums up Michigan's tax system, which is one of the most regressive in the nation, like this:
"What you have is the top 5 percent doing fabulously well, the top 20 percent ($92,000 household income) doing quite well and the other 75 percent struggling."It's a massive widening of inequality ... and nobody is talking about it."
A lot of leaders in Lansing don't get it. It's not just that they make a minimum of $79,650 per year. It's that many of them don't send their kids to public schools, don't ride the bus to work and don't worry about medical bills because they have the best plan money can buy.
When Gov. Jennifer Granholm blasts the pain of budget cuts, it's a pain she doesn't directly feel.
When House Minority Leader Craig DeRoche complains he can't sell his second house in tony Novi as proof that Michiganders can't afford a tax hike, he's out of touch.
What they need is more input from the majority — the struggling 75 percent — so they can pound out a budget with fairer taxes and better services.
But since hamstrung policymakers don't seem eager to invest in their constituents, we would do well to invest in ourselves.
Not just by voting for local millages to keep fire stations and schools up and running. But by socking away as much as we can, so our kids can go to Harvard like the governor, or study at the Sorbonne like Senate Majority Leader Mike Bishop.
Yes, even tuition at our world-class state universities has spiraled out of control, but they remain the best boot camp for the next generation of leaders.
And with the rate of progress in Michigan, they'll likely get stuck with plenty of problems to solve.
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