Snyder, Republicans say they've agreed on 'spending targets' that would balance Michigan budget
Gov. Rick Snyder and Republican legislative leaders said this afternoon that they had agreed to specific "spending targets" that would set the stage for a balanced state budget for 2011-12 and 2012-13.
"Today we’re doing a budget that is absolutely fiscally responsible and financially sound," Snyder said at a press conference in Lansing. "It’s not just about spending money. It’s about delivering results in a financially responsible way."
Legislators still have to agree on specific bills and other details, but a deal on spending targets means a finalized budget isn't far off.
Gov. Rick Snyder and Lt. Gov. Brian Calley, shown here in August, today said they had agreed with Republican legislative leaders on specific "spending targets" for the state budget.
Ryan J. Stanton | AnnArbor.com
The announcement comes after Lansing fiscal analysts said Friday and Monday that they expect the state to collect between $400 million and $700 million more in revenue in 2010-11 and 2011-12 than they had previously projected.
With that knowledge, the Republican leaders today announced plans to place $255 million into a "budget stabilization fund" and $133 million into a reserve fund to help pay off future retirement costs for schools.
"The budget we are working toward is a solid building block for Michigan's future. Coupled with the recent tax overhaul, this fiscally disciplined, structurally balanced budget will let investors and job providers know that Michigan's house is in order," Snyder said in a statement. "Restoring this fiscal integrity creates an economic environment that leads to more jobs for Michigan workers. While healthy discussion will continue in the coming days, there's no doubt that the culture change in Lansing is providing Michigan families with the responsive government they expect and deserve."
The deal announced today would restore $310 million in funding for public school districts that agree to use the funds to cover retirement costs and agree to certain standards the administration has labeled as "best practice measures." That means the per-pupil cut would be $270 — which includes a $170 per-pupil cut approved under former Gov. Jennifer Granholm that won't be restored.
Snyder spoke to reporters with Lt. Gov. Brian Calley, Budget Director John Nixon, Republican House Speaker Jase Bolger and Republican Sen. Majority Leader Randy Richardville.
The officials said they had agreed to reduce the amount of state employee concessions they're seeking to $145 million. The previous target was $180 million.
They said they had agreed to provide $50 million to the Michigan Economic Development Corp.'s Michigan Strategic Fund for various incentives, including brownfield redevelopment and historic preservation.
The spending targets include a separate pool of $25 million in incentives for the film industry, equal to Snyder's original proposal. That's down from $117.2 million in incentives distributed to the industry in 2010 through the state's unlimited film tax credit.
Snyder has set May 31 as a deadline to complete a budget for the 2011-12 fiscal year, which starts Oct. 1.
All Democrats in the Senate and House are expected to vote against the Republicans' budget, but that's not enough to stop it because Republicans control both chambers.
The deal comes after the state Legislature last week voted to eliminate the controversial Michigan Business Tax and replace it with a 6 percent corporate income tax that exempts most small businesses, leading to a $1.7 billion business tax cut.
That legislation also adopts a phased-in pension tax, reduces the Earned Income Tax Credit for low-income workers and eliminates charitable giving credits.
State Sen. Minority Leader Gretchen Whitmer, D-East Lansing, today slammed Snyder and said she was "begging" Republican legislators to vote to preserve K-12 funding.
"We all know that Rick Snyder is 'one tough nerd.' I mean, he spent millions of dollars of his own money telling us that, and it seemed to resonate with Michigan voters," Whitmer said in a fiery statement today on the Senate floor in Lansing. "But I think, in general, people also believed he was a nice guy. But it begs the question: Do nice guys take money from schoolkids to give business tax breaks? Do nice guys wage a tax increase on retirees living on fixed incomes to give business tax breaks?"
Whitmer said Snyder had not demonstrated that the business tax cut would create jobs.
"He can’t point to one iota of a metric to prove it will spur job growth or state investment," she said. "Lately I’ve felt like I’m living in an alternate universe. When the heck did Republicans become the tax and spenders? For those of you keeping track, it’s 2011."
Bolger, R-Marshall, said the budget rejects the "status quo."
"It’s time to hit the reset button. It’s time to address the state's realities and get our state on that path to success," Bolger told reporters. "It is a new era in Michigan, an era of responsibility, an era of accountability."
The state Senate last week also passed a bill that would require public school workers to pay 20 percent of their health care premiums when new contracts are negotiated.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Trouble
Fri, May 20, 2011 : 10:06 p.m.
I am so Confused. Why Governor Jenny not do all this?
John Q
Sat, May 21, 2011 : 1:55 a.m.
In what year did Granholm get to work with a House and Senate controlled by Democrats?
Mike K
Fri, May 20, 2011 : 9:02 p.m.
No, no problem here; just more facts to get in the way. <a href="http://www.forbes.com/2010/10/13/best-states-for-business-business-beltway-best-states-table.html" rel='nofollow'>http://www.forbes.com/2010/10/13/best-states-for-business-business-beltway-best-states-table.html</a>
Mike K
Fri, May 20, 2011 : 8:03 p.m.
Interesting article here: <a href="http://www.detnews.com/article/20110520/MIVIEW/105200388/1467/opinion01/Calabrese--We%E2%80%99re-all-Nerds-now" rel='nofollow'>http://www.detnews.com/article/20110520/MIVIEW/105200388/1467/opinion01/Calabrese--We%E2%80%99re-all-Nerds-now</a>
Mike K
Sat, May 21, 2011 : 12:59 a.m.
Ouch - I thought "tax and spend" was a stereotype devised by conservatives, but it seems that it's exactly the plan. <a href="http://053.housedems.com/news/article/democrats-announce-michigan-jobs-now-plan" rel='nofollow'>http://053.housedems.com/news/article/democrats-announce-michigan-jobs-now-plan</a>
Mike K
Sat, May 21, 2011 : 12:48 a.m.
Yes, I know. It is referenced in another post in this thread. It seems like the governor had a good idea.
Jeff Irwin
Sat, May 21, 2011 : 12:09 a.m.
That article references <a href="http://www.MIReportCard.com" rel='nofollow'>www.MIReportCard.com</a>. The website is the companion to legislation I introduced, HB 4060. HB 4060: <a href="http://www.legislature.mi.gov/%28S%28qf5oee3yhiwlqv45sf1rtx55%29%29/mileg.aspx?page=getobject&objectname=2011-HB-4660&query=on" rel='nofollow'>http://www.legislature.mi.gov/%28S%28qf5oee3yhiwlqv45sf1rtx55%29%29/mileg.aspx?page=getobject&objectname=2011-HB-4660&query=on</a>
Mr. Tibbs
Fri, May 20, 2011 : 6:35 p.m.
great news? my income dropped 30 bux with obamas new taxes Jan 1, like I can afford on a fixed income more money subtracted from my income? ' funny they should use the word "target" though for some on the edge, I find it very apropriate wording.....
leaguebus
Fri, May 20, 2011 : 5:50 p.m.
I hear everyone complaining about taxing the rich. The tax policies for the last 30 years have favored the rich. The US now has the largest gap between rich and poor of any industrialized nation. Snyder decides that the poorest of the poor will lose a $400 entitlement and also have to pay an additional $400 in taxes. Meanwhile the rich keep collecting tax breaks, that will "stimulate" job creation. Again I say, the largest job creator in the last 20 years was Bill Clinton, about 23M jobs and he did that after Bush senior raised taxes after saying "no new taxes". Any tax cuts for big business in Michigan is going to finance their expansions overseas not create jobs here. I read here that people were saying that education is still good in the US. We are around 25th in the world now and going lower every year, thanks to tax cuts for the rich and businesses. Governor Granholm tried very hard to not cut funds for education and cut everything else first. The end of her second term was the lowest part of the crash and now we are starting up the other side (Snyder being given credit for increased revenues) by further cutting taxes for the rich/businesses and laying more tax on the poor and middle class. What a way to stimulate the economy! I would be in Snyders corner now, if he had not given the $2B tax cut to business, but he is just a supply sider like Ronnie Reagan. We all need to shoulder the burden of increased taxes, not just the poor. Hopefully I will be seeing a recall petition soon.
Mike K
Sat, May 21, 2011 : 2:51 a.m.
Like I said, contact your congressperson. Pointing out one specific industry is not fair. In fact it's petty. Reform everything and move forward. Stop looking at others.
John Q
Sat, May 21, 2011 : 2:05 a.m.
"The law is the the law John Q. The government gave industry tax breaks to promote certain things. " The law can be changed if there's no longer a need for the tax break. Why are we giving oil companies billions in tax subsidies for development when they are generating record profits? Justify why the law shouldn't be changed?
Mike K
Fri, May 20, 2011 : 7:04 p.m.
Lobby your representatives for tax reforms. That's on my list for the next presidential election. The law is the the law John Q. The government gave industry tax breaks to promote certain things. Companies exist to make a profit. Record profits are good, not bad. No profit, no company, no jobs, no taxes. Do you have any idea who much tax oil companies pay? Check out Exxon's income statement. <a href="http://www.google.com/finance?q=NYSE:XOM&fstype=ii" rel='nofollow'>http://www.google.com/finance?q=NYSE:XOM&fstype=ii</a>. One way to battle income inequality to employ the middle class. We will continue to fight "demand" for decades to come. Like Europe, we are "mature". China and India are growing.
John Q
Fri, May 20, 2011 : 6:33 p.m.
People are hyperfocused on the fact that big business continues to reap tax break while recording record profits, the rich continue to amass a higher percentage of income while the middle and working class are told that they have to continue to sacrifice their wages and benefits as they struggle to get by day-to-day.
Mike K
Fri, May 20, 2011 : 6:18 p.m.
Ignore the job losses. Ignore the empty industrial parks that employed people and generated taxes. Forget about them; that doesn't need to be fixed. Michigan doesn't need business or jobs. We have our own resource in Barton Hills. We can take it from them to fund government. Heck with commerce. It's nonsense. I would agree with your second to last sentence. There is clearly a need for tax reform, but to many people are hyper focused on promoting and defending "taxing the rich" or "ending big oil subsidies". There is no honest debate in Washington or the States for that matter.
skfina2
Fri, May 20, 2011 : 3:29 p.m.
For those of you who think Gov. Snyder's budget will create jobs, think about this: asking me, a teacher, to contribute 20% towards my health care costs reduces my monthly disposable income by about $350 (10% of my take home pay). That means there are some local businesses that will not get that money - no more monthly pedicures, no more weekly meals at No Thai, etc. Suppose just 20 of my colleagues make the same cuts. Now the nail salon is out $600 a month, No Thai is out $800 a month, and so on. Are they going to hire new workers when demand is down and their income is decreased? No, they are not. Now multiply that $350 by approximately 200,000 public school employees, and you're talking about $70 million per month being pulled out of our economy each month due to a loss of disposable income, approximately $840 million per year. And this is not even taking into account the effect of taxing pensions, and how seniors will have to pull back, too. It's basic supply and demand, folks. Businesses expand when demand increases, they contract when it decreases. Guess what - demand is about to decrease. It will be interesting to see what the employment numbers look like a year from now. I'm guessing it won't be pretty.
DonBee
Sat, May 21, 2011 : 1:39 a.m.
skfina2 - Some of use with two adults with master's degrees plus are cutting cable and other expenses. One has been without a job for several years and the other taking a more than 50 percent pay cut over the last 3 years. We don't go out to dinner, we don't buy steak, except for birthdays, we do most of our cooking from scratch (cheaper) and we have cut HBO and Enhanced cable, our children don't have cell phones. We have a 14 year old van and an 11 year old van. Don't tell me that folks with Master's degrees are not taking cuts. We both have engineering degrees and the bottom has fallen out of the Michigan Engineering Market. We have friends with good engineering degrees re-training as Nurses, and for other medical industry jobs. My apologies for taking your monthly to weekly, but you will still get no sympathy from me. You really are living in a rose colored world.
Mike K
Fri, May 20, 2011 : 6:52 p.m.
I don't care skfina2. Just make sure my kid doesn't run off and get hurt. I'm glad we have a similar perspective about supply and demand. And by the way, I'm a big fan of nice nails.
skfina2
Fri, May 20, 2011 : 6:01 p.m.
@andys: businesses are people? Really? And we're better off in a society where wealthy business owners get the money and teachers, police, and retirees don't? I think your priorities are a bit screwy. And by the way, the state does have money in the school fund. It has plenty of money. But Gov. Snyder has decided it is more important to give businesses an 82% tax cut than fund our schools properly. @Dog Guy: Expensive restaurants? Have you been to No Thai? If not, I recommend you do - great food and it costs about $10 per meal. Not even close to expensive. @zigzag21 - great point. Thank you. @DonBee: Notice that I said monthly pedicures, not weekly. And by private sector workers, are you referring to those with a Master's degree? Because I doubt too many of those have to cut their cable service. Or are you comparing teachers to private sector workers like those who greet people at Wal-Mart or serve french fries at McDonald's. There's nothing wrong with that work, and I'm sorry those workers have been hurt, but you can't compare the skill level needed to be a teacher with jobs like that. @MikeK - first post written during lunch hour (where I stayed in my classroom so some of my students would have a place to come and catch up on some missing work); response written during computer lab time.
Mike K
Fri, May 20, 2011 : 5:50 p.m.
Show me the data zigzag21!!!
zigzag21
Fri, May 20, 2011 : 4:40 p.m.
@andys - Moving the tax burden from teachers (generally low to medium income) to businesses (low to high income) doesn't really work out as you suggest. Low to medium income folks tend to spend their money into the local economy. While this is true for business, it is only true to a lesser degree. When you get to the larger businesses, tax break money tends to get placed in capital markets (investments) instead of local economies. And if you're talking medium to large national or multi-national corporations, those tax breaks basically siphon money out of the Michigan economy back to the home offices (in Germany, Ireland, etc.).
FredMax
Fri, May 20, 2011 : 4:18 p.m.
Well, almost. The pedicure and Thai food industries will contract, HOWEVER industries that make more sense in this lean and competetive time will expand.
Dog Guy
Fri, May 20, 2011 : 3:58 p.m.
We tax parasites are a permanent ruling class if we use some discretion. Admitting to pedicures and expensive restaurants does not sustain the "underpaid public servant" image. Rewrite using repairs to a 16-year-old Toyota and replacing the roof. Thanks.
DonBee
Fri, May 20, 2011 : 3:53 p.m.
Weekly pedicure? Meals Out? We had to drop those from our budget years ago, after the 1st pay cut. Now it is the loss of basic cable television and not replacing a dead car that are on our cut next list. I am sorry, but if these are the kinds of cuts you are worried about, then you have no idea what is happening to private sector workers in the state.
andys
Fri, May 20, 2011 : 3:51 p.m.
Businesses (rather the owners of those businesses) will have this money that you won't. They are people to, just like you, and they will spend this new "disposable" income, if they don't invest it in their businesses which you don't seem to think they will. Their point is that they have been taxed to heavily all these years, now its someone else's turn to carry the burden. The state does not have the money, so if you don't sacrifice, who does? No matter who sacrifices, there may be less spending, but, again, we are out of money.
Mike K
Fri, May 20, 2011 : 3:44 p.m.
First, get back to work teaching!! (just kidding). Second, man do you enjoy the life (just kidding). Your point is well spoken, but it is the same point the "anti tax" crowd makes. Give me more, I'll spend more. Like you, I am proof positive. I had some work that needed to be done to the house. It was going to cost 5 grand. I had the money, but then found I owed 5 grand in income tax (not deducting enough). The repairs did not get done. To add insult to injury, I got a raise; my first in 4 years, but I had to fork that over to uncle sam so I wouldn't get another March surprise. You are right, collectively this adds up and reduces consumption.
andys
Fri, May 20, 2011 : 2:42 p.m.
Some days I feel like one of Pavlov's dogs coming to annarbor.com. I see a story about "michigan's economy" and Rick Snyder" and I start salivating to post my conservative diatribes, and mix it up with all the liberals.
Mike K
Fri, May 20, 2011 : 3:10 p.m.
Too funny. My wife thinks I'm stupid for posting, but it hard to listen to some comments without injecting another point of view. Candidly, there a several liberal principle I do believe in, but it's the attitude of the liberals that I question. For example, "eliminate "subsidies" for "big oil"". There are no subsidies. All corporations are entitled to certain deductions mandated by law. These deductions were put in place by our policy makers for a purpose (e.g. increase jobs). "Big Oil" only gets one "special" deduction and it is quite small to the other 3 they take. It's just ridiculous. Let's talk about "taxing the rich". In as much as I agree the tax code needs reform, and I loathe that some millionairs by the same amount of income taxes as me (average), "taxing the rich" is inflammatory to me. It reminds of little kids envious of others. Anyway, have fun.
Wolf's Bane
Fri, May 20, 2011 : 2:16 p.m.
Lip service, lip service, followed by slash and burn, slash and burn, followed by lip service, lip service... Rick Snyder is a wolf in sheep's clothing.
braggslaw
Fri, May 20, 2011 : 1:56 p.m.
I think this is great for the state. Strong leadership, decisive action, and accountability. The throttling of the state money spigot will effect some but the super-majority of people will benefit.
Mike K
Sat, May 21, 2011 : 2:57 a.m.
here, I'll tell you a story about a hypocrite. I was "talking" to a liberal minded individual and complaining about the federal taxes I HAVE paid. I shared my number, and the response was "get a damn accountant". Yeah, John, everyone just loves to pay 40% of their gross in taxes. That's special. You know who is getting screwed? The good folks at Fingerle. I'm sure there is a political reason for you not to care. And yes, there are many Ann Arborites who want to pay less taxes. That was the point.
John Q
Sat, May 21, 2011 : 2:02 a.m.
"You may not like it that our "liberal" community pays into a system that supports conservative areas, but there are conservatives in our community who probably don't like paying into a system that supports liberal areas." It's not a matter of liking or not liking. Ann Arbor residents don't begrudge the revenue they send to Lansing unlike the hypocrites elsewhere in the state.
Mike K
Fri, May 20, 2011 : 7:17 p.m.
It still goes both ways John Q. You may not like it that our "liberal" community pays into a system that supports conservative areas, but there are conservatives in our community who probably don't like paying into a system that supports liberal areas. Without dark, there is no light.
John Q
Fri, May 20, 2011 : 6:43 p.m.
"Easy there John Q because the money we pay also goes to liberal urban school districts around the state." So what? The point is that for all the bashing of "liberal" Ann Arbor, it's cities like Ann Arbor that are generating the tax revenue that sustain the school spending in areas of the state where they hate taxes and hate liberals.
Mike K
Fri, May 20, 2011 : 6:37 p.m.
Not to be outdone, the House Democrat's have now made their own "report card" lol. <a href="http://www.mireportcard.com/" rel='nofollow'>http://www.mireportcard.com/</a> Seems like there is plenty of accountability.
Mike K
Fri, May 20, 2011 : 5:55 p.m.
Townie - I think it can be tracked. <a href="http://www.michigan.gov/midashboard" rel='nofollow'>http://www.michigan.gov/midashboard</a> One can also look at the budgets and compare them to previous budgets, but that would be quite a task. <a href="http://www.michigan.gov/documents/budget/1_345974_7.pdf" rel='nofollow'>http://www.michigan.gov/documents/budget/1_345974_7.pdf</a> Enjoy.
Townie
Fri, May 20, 2011 : 4:23 p.m.
Accountability ?! Snyder's jobs program is 'uncountable', can't be tracked, etc. according to him -- and he likes that. Just throw money at corporations with no strings attached and HOPE they don't pocket the money (almost TWO BILLION). Yeah, that's accountability -- just like Snyder at SPARK where all the numbers were made up and never allowed to be validated. Dream on.
Mike K
Fri, May 20, 2011 : 3 p.m.
Easy there John Q because the money we pay also goes to liberal urban school districts around the state.
andys
Fri, May 20, 2011 : 2:38 p.m.
"The money that people in Ann Arbor pay to the state that doesn't get returned to Ann Arbor but instead gets funneled to conservative rural school districts around the state?" By those "Conservative" districts are you referring to the poor school districts. Is that not consistent with the liberal motto - take from the rich and give to the poor? Why are you so hostile about that? Or is it only OK to take from rich conservatives and give to poor liberals? I guess rich Ann Arbor liberals have no interest in helping economically disadvantaged conservatives. At least we are coming to some clarity here.
John Q
Fri, May 20, 2011 : 2:27 p.m.
This is a good joke. What state money spigot? The money that people in Ann Arbor pay to the state that doesn't get returned to Ann Arbor but instead gets funneled to conservative rural school districts around the state? That spigot?
Enso
Fri, May 20, 2011 : 1:44 p.m.
Government brought to you by Republicans... Rep Gov, Rep House, Rep Senate.... Let's see what happens.
sh1
Fri, May 20, 2011 : 1:20 p.m.
For all you rejoicing out there, how do you react to the fact that teachers will be held accountable for the learning of 35 students in a classroom with less support and fewer materials available to teach them? It's a set-up for disaster. I can see the emergency financial managers already wringing their hands a la Mr. Burns. Excellent.
andys
Fri, May 20, 2011 : 2 p.m.
Teachers keep their sustainable benefits, and students suffer. Private sector working schlubs in Ann Arbor fighting to keep their jobs despite pay and benefit cuts are asked to pay more taxes so teachers can have compensation packages worth $100k, and retire in their 50's. Sorry that's a tough sell. My gripe is not with teachers so much, I think they should be compensated well, but some paper pushing bureaucrat city employee in a similar situation -- no sympathy.
braggslaw
Fri, May 20, 2011 : 1:57 p.m.
cut your benefits and hire more teachers... simple math. there is no shortage of good teachers willing to take jobs.
andys
Fri, May 20, 2011 : 1:54 p.m.
You don't, but welcome to your 35 students.
sh1
Fri, May 20, 2011 : 1:51 p.m.
If one bargains for something in good faith, following all the rules and having both sides agree, why should they have to give money back for someone's else's poor planning?
andys
Fri, May 20, 2011 : 1:27 p.m.
Teachers along with many public service employees, bargained for unsustainable pay and benefits. Now that its coming home to roost, they won't concede these unsustainable pay and benefits, so districts are now forced to increase class size. Someone once said that unions are not sustainable, as they will kill off any industry / sector they successfully organize.
Veracity
Fri, May 20, 2011 : 1:14 p.m.
Michigan's biggest problems are its 450,000 unemployed and its poor economy. I reserve praise for Governor Snyder until unemployment is essentially eliminated and the state's GDP is rising significantly. Personally, I would appreciate public announcement of the monthly employment numbers as well as a measure of GDP, just as is being done nationally.
zigzag21
Fri, May 20, 2011 : 12:59 p.m.
Unfortunately, the great problem I see with Snyder's approach is exemplified in Whitmer's statement: "He can't point to one iota of a metric to prove it will spur job growth or state investment." There is a substantial amount of right-wing narrative behind Snyder's approach, but where is the in-depth economic analysis? (And I don't mean some ginned-up study from The Heritage Foundation, I mean real analysis) The current wave of right-wing governors seem more motivated by emotion than fact. If someone can point me to some hard numbers, I'd really appreciate it.
DonBee
Sat, May 21, 2011 : 1:31 a.m.
Townie - That is not raising taxes on business. That is government going deeper in debt to underwrite businesses that were failing. If we are lucky GM and Chrysler will pay the government back. Unfortunately for the non-union retirees and the bond holders who were former salaried employees the pre-packaged bankruptcy wiped them out. Union retirees were kept whole.
Mike K
Fri, May 20, 2011 : 5:30 p.m.
Townie - what you see on that link are cold hard facts, and they are not arguable. The impact on our tax base is real. If you want your "hard numbers" go ask the Governor for a proforma statement yourself just like zigzag did. Don't be shy. Technically speaking, the governor does work for you. I would agree Townie that without government intervention at GM and Chrysler, there likely would have been a bigger disaster here in Michigan. The price of non performance is indeed intervention, but I guess it depends on what party you're in.
Townie
Fri, May 20, 2011 : 4:48 p.m.
Mike K - I looked at the site you referenced. No studies, no research. Want to try again to point to something that isn't talk? We can measure the corporation tax cut but Snyder and his buddies don't want to and won't. It could be done (esp. if the legislation made some sense and had a few reporting strings) using the submitted company tax reports. But that would expose the myth and so that will never happen (accountability is for other people). Why aren't you demanding accountability for proving that nearly $2 billion in tax cuts actually has any effect? DonBee - so where would GM and Chrysler be right now with out the gov't help? Gone with hundreds of thousands of jobs that's what.
Mike K
Fri, May 20, 2011 : 3:34 p.m.
zigzag21 - good luck with that. Do let us know.
zigzag21
Fri, May 20, 2011 : 3:28 p.m.
@gyre - I have a very small business. The tax breaks really won't make that much difference to me. My friends that have larger businesses feel the same way. Tax breaks aren't magic. They don't create jobs. When business picks up, that's when people start hiring. I've never looked at taxes as a bad thing. I live in a really great country, a really great state, and a really great town, and my taxes make that happen. Generally, I feel blessed with income, not cursed by taxes.
zigzag21
Fri, May 20, 2011 : 3:10 p.m.
@Mike K - You know, that's a damn good idea. Rather than sitting around jawing on and on, I just sent a request off to Governor Snyder asking for specifics. If I get anything I'll post it.
grye
Fri, May 20, 2011 : 3:03 p.m.
Ziggy: Since you own a small business, would you rather pay higher taxes? Do you think that would help stimulate your business?
Mike K
Fri, May 20, 2011 : 2:58 p.m.
Perhaps you can ask him for a proforma statement?
zigzag21
Fri, May 20, 2011 : 2:38 p.m.
@DonBee - That's not the point of my post. I'm not trying to defend the last 8 years. They've been awful. I am truly concerned that Governor Snyder's budget is based more on emotion and narrative than fact and sound economic discipline. Where are the numbers? @Mike A - Thanks for the blog post. Do you have any analysis of Snyder's plan, though? That's what I'm looking for. @andys - Actually, the CBO did analysis on the Federal Stimulus bill. I'm looking for something similar. I'm definitely a liberal, but I keep an open mind for any governor who can fix things. I am also a pragmatist and have a small business of my own. I'd like to see projections and numbers. Are they even doing analysis before they enact this policy?
DonBee
Fri, May 20, 2011 : 1:39 p.m.
Mr Magsig - Can you point to any hard analysis that the last 8 year's policy on creating jobs was working in Michigan?
Mike K
Fri, May 20, 2011 : 1:21 p.m.
Here's some hard numbers for you to review. <a href="http://understandingsociety.blogspot.com/2009/09/michigan-job-loss-tsunami.html" rel='nofollow'>http://understandingsociety.blogspot.com/2009/09/michigan-job-loss-tsunami.html</a> There is no guarentee that any plan will work. One thing should be clear though. Business's provide jobs which create a tax base. The left wing talking points of "tax the rich" and "income inequality" are both solved by getting the middle class working and producing. That will not happen without business's.
andys
Fri, May 20, 2011 : 1:15 p.m.
"There is a substantial amount of right-wing narrative behind Snyder's approach, but where is the in-depth economic analysis?" Its in the same desk drawer as the "in-depth economic analysis" regarding "saved and created jobs" from the Federal Stimulus bill. Its insane. The libs here have it all figured out, we just need higher taxes to spur economic growth. They won't even admit that a confiscatory tax of 100% would be harmful to growth / jobs. There is no correlation - so tax away. I'll admit we need to find the "sweet spot" for tax rates one that balances society's needs with pro-growth stance. But look where taxes on business have been in Michigan and work from there - we needed to lower the burden on businesses.
Top Cat
Fri, May 20, 2011 : 12:58 p.m.
So nice to see that responsible adults are back in charge. Can't wait to replicate this in Washington DC next year.
Townie
Fri, May 20, 2011 : 4:21 p.m.
Yeah, let's let the Tea Party types take over. Throw facts out and just act on rhetoric, that'll work. Worked great for Bush when he drove our country and economy into the ditch.
macjont
Fri, May 20, 2011 : 12:23 p.m.
One wonders how so many posters can ignore evidence and sound logical analysis and stick to their conclusions that reducing the tax on business will create jobs here in Michigan. Is it self-interest? Or are they delusional?
1bit
Sat, May 21, 2011 : 11:07 a.m.
John Q: Do you think double taxation on small business owners is fair? There is a lot of angst in these threads, but ultimately we have spending priorities in this State and we need revenue for those priorities. Most people probably agree on 90-95% of the spending priorities. On the revenue side, we obviously need something lower that a 100% tax rate and higher than a 0% tax rate. My guess is that most people would be within a percentage point of each other as to the optimal rate. I also don't believe that most people believe in selective taxing of only one segment of the population to pay for the largess of another.
John Q
Sat, May 21, 2011 : 2 a.m.
Business tax payments would go from 2 billion a year to less than $300 million a year. Do you think that's fair?
1bit
Fri, May 20, 2011 : 8:50 p.m.
"tax break to businesses" The tax reform helps small business owners. They are people too. Large businesses pay a higher tax rate in the proposal. At what level of income and at what rate do you think it is fair to tax your fellow citizens to support a benefit package that those fellow citizens do not enjoy themselves?
John Q
Fri, May 20, 2011 : 6:41 p.m.
"Michigan is one of only 10 states that doesn't tax pension income. Income is income. Read all about taxes right here." Another good laugh. The states that don't tax pensions are the ones that conservatives run around saying we should emulate. How about answering your own question? Is it better to increase taxes on the working poor and seniors to give a tax break to businesses?
Mike K
Fri, May 20, 2011 : 2:56 p.m.
Michigan is one of only 10 states that doesn't tax pension income. Income is income. Read all about taxes right here. <a href="http://retirementliving.com/RLtaxes.html" rel='nofollow'>http://retirementliving.com/RLtaxes.html</a>
John Q
Fri, May 20, 2011 : 2:31 p.m.
" Is taxing certain classes of people a better answer? " Apparently so because the business class want to see the working poor and seniors pay more taxes so business owners can pay less.
Mike K
Fri, May 20, 2011 : 12:53 p.m.
It's kind of like "likewise". Commerce builds a tax base. Commerce is central to civilized society. It always has been. So what we have is Snyder trying to rebuild commerce by making the environment for it more friendly. Why is that so awful? Is taxing certain classes of people a better answer? Is making the enviroment for commerce less friendly a better answer? If you want to solve income inequality, start by providing the opportunity to get a decent job. The rest is up to the individual. The evidence YOU need to acknowledge is all of the empty buildings in our industrial parks. It is supposed to be a nice day today; take 15 minutes and go for a drive. You'll see it. I guarentee it. Try the Avis Industrial Park just south of the A2 airport to start.
Diagenes
Fri, May 20, 2011 : 12:49 p.m.
What evidence do you have that raising taxes on business will create jobs? Illinios raised taxes on business and when many large employers like Sears and Catipillar threatened to move they were granted tax breaks to try and keep them. Boeing wants to move a plant to SC because of lower costs than Washington. That would create jobs in SC.
Diagenes
Fri, May 20, 2011 : 12:43 p.m.
We are not delusional only experienced. The majority of people are employed in small businesses that pay property taxes, unemployment insurance, workers comp insurance, taxes on phone and fuel, and other licensing and regulation costs that must be paid before wages. If there is a profit, taxes must be paid on the profit instead of buying new equipment or having the confidence to employ another person to help expand the business. Lower the cost of doing business in Michigan and more small businesses will thrive and spread the economic activity around the community. Finally we have a Governor that understands.
snoopdog
Fri, May 20, 2011 : 12:20 p.m.
I love this guy despite his softening at the last minute his budget. The more the public sector wails the more certain we can be that Rick is getting this ship turned around and headed in the right direction. Good Day
jdmb03
Fri, May 20, 2011 : 11:51 a.m.
Thank you Gov. Snyder. Keep up the good work.
Gorc
Fri, May 20, 2011 : 11:11 a.m.
4 more years !!!!
Peter Jameson
Fri, May 20, 2011 : 6:05 a.m.
thank you gov
Marshall Applewhite
Fri, May 20, 2011 : 4:02 a.m.
Also, the kicking and screaming from unionistas here tells me that Snyder is doing things right! Keep up the good work Rick!
Marshall Applewhite
Fri, May 20, 2011 : 3:58 a.m.
Thank god. Our state has finally returned to fiscal sanity.
Mike K
Fri, May 20, 2011 : 12:52 a.m.
This is great news. With years of mismanagement under our belts, someone has finally stepped up. For those who simply what to "tax the rich", all I suggest is you drive through an industrial park and witness the "for sale", "for lease", "available" signs present. It truly is obvious. All these "non-business's" are Michigan's tax drain -- not the rich. If you don't have it, you can't spend it. Kudos to Snyder for trying to return Michigan to a place to come to work (and create tax revenue).
Mike K
Fri, May 20, 2011 : 5:14 p.m.
Engler too.
Townie
Fri, May 20, 2011 : 4:20 p.m.
Be sure to list Engler as part of the mismanagement. Oh, sorry he's a Republican so that's impossible.
TheJLR
Fri, May 20, 2011 : 12:49 a.m.
Snyder is reacting to economic reality. Many of our jobs have gone overseas to foreign countries. That includes factory, research, engineering, and IT. The only way in which the remaining companies can survive is to lower their costs. Lower taxes, lower wages, more flexible cost structure, etc. The end result is/will lower our standard of living. Education is the great equalizer (Bill Gates) and countries like India and China are churning out far more highly educated people. Each worker in this country is competing against other workers in this country as well as workers in other countries. An US education is better than foreign educations, but most jobs don't require the best cutting edge (US) education money can buy, and it is those less than cutting edge jobs which are vanishing (the jobs which require an education but not cutting edge, which are the majority of jobs). Foreign workers do those less than cutting edge jobs for 1/5 the cost, particularly when they manipulate their currency. Our 'Sputnik moment' Obama referred to. Do CEOs still get paid too much? Yes. Do bankers on Wall Street make too much? Yes. However, dropping their salaries or taxing them more, although would be more fair, would not change our plight. We will have pensions again and be more prosperous again when we start exporting goods and services that cannot be obtained from other countries (like it once was). The US still produces many goods which are superior to those which can be obtained elsewhere, but the number of those products keeps shrinking, and so here we are. I work in R&D and am being forced to teach scientists in Asia all that I know. Probably will take 3-5 years, but they are bright, and are learning. They make 1/5 my salary. What do you think will be the end result for me? I spend many nights pondering my next move. One thing is for sure. I will most likely be making less money with less benefits as I compete against more and more workers for jobs.
FredMax
Fri, May 20, 2011 : 2:58 p.m.
>>I watched an entire billion dollar business unit tank as a result. Thanks for confirming the exact same thing i saw. The sad thing that most non-technical people don't realize; in today's world of modern products, the software developer essentially is the product technical expert. When your software developers are training counterparts in other countries, they are essentially permanently transferring not only their own jobs, but all the company's jobs, all the trickle down, etc. We are giving away our jobs for cheap, jobs that will likely never come back.
Pete Magsig
Fri, May 20, 2011 : 1:39 p.m.
I've seen an interesting trend in the last 7 years as my last company outsourced software jobs like crazy. Generally, the cost ratio was 3:1 - you could hire three times as many software developers in India as you could here. The initial blush of outsourcing, which leveraged a small pool of highly talented, underpaid developers, poured tons of capital into that country, until they were hiring anybody that could fog a mirror. It's strikingly similar to Silicon Valley in the 80s - they were hiring anybody to fill positions. The talent pool was diluted. Repeat the process in China, etc. It didn't take long for the old adage 'you get what you pay for' to become true. The truly talented individuals these countries started demanding more money, while the less talented stayed cheap. Companies want cheap. So they hired less talented people. I watched an entire billion dollar business unit tank as a result. Incredibly cheap, incredibly smart talent in other countries are becoming harder and harder to find. Most of the time, you get what you pay for. If the writing's on the wall that you're training your replacements, get out, and get out now. The knowledge in your head is worth far more on the open job market right now, than it will be after you give it away to several other people. It is in your best interests to begin your job search as soon as possible.
Awakened
Fri, May 20, 2011 : 11:33 a.m.
We are now in a glogbal market. Like it or not the compensation for jobs will continue to shrink until it is competative with overseas markets. We cannot continue to spend like that won't happen. Government must cut back. It must spend half of what it does to restore financial balence.
FredMax
Fri, May 20, 2011 : 2:35 a.m.
I was once in a simlar predicament, I found a new job as fast as possilbe rather than play any part in training offshore replacements. Ironically, those managing the offshoring are usually the next to go, and ironically they often don't even figure that out until it happens! I mean, who do they think they will manage once engineering is gone?
tom swift jr.
Fri, May 20, 2011 : 12:29 a.m.
My god I hate this man. Snyder and his republican cronies will drag this state into the middle ages. Welcome to a land of poor houses, serfs, no quality public education. The rich get richer, the rest of us get the shaft.
Wolf's Bane
Fri, May 20, 2011 : 4:55 p.m.
Snyder is trying to help MI? REALLY? Oh, so driving the film industry out Michigan is really helping, turning are kids into morons unable to compete in the marketplace do to lack of educational opportunities, starving and killing off seniors, and destroying the environment, and giving the wealthiest of the state big tax breaks is helping? Thanks, but no thanks.
Wolf's Bane
Fri, May 20, 2011 : 2:17 p.m.
He is vile.... that is true.
DonBee
Fri, May 20, 2011 : 1:36 p.m.
Tom Swift jr - The original Tom Swift was someone who worked for the benefit of the future. I doubt he ever "hated" anyone. He offered hope and a better future. His words were an inspiration to a generation. As to the quality of education, structural reform is needed. We need to put a much higher percentage of school spending in the classroom - not administration. The top paid administrators in many school districts are in the top 5% of all Americans for income. The top Teachers in many districts break into the top 20% and maybe even the top 10% of households in the US for income (if two teachers are married and working full time and have 15 years in the district they break into the top 10%). Payroll makes up most of the cost of schools today. We need to pay the teachers and not extra HR, accounting, and other back office people. Consolidating back office to 1 group per county would be a great start.
jdmb03
Fri, May 20, 2011 : 11:58 a.m.
Are you serious Tom Jr.? Michigan was in a bad situaton when Granholm was in office. Snyder is trying to help MI.
Awakened
Fri, May 20, 2011 : 11:30 a.m.
Tom, take a drive to Detroit, Flint, Saginaw, Grand Rapids, Ypsilanti, or the UP. You will see what you described. It is not coming it is here. The reality must be faced. You cannot put the state budget on your American Express card.
grye
Fri, May 20, 2011 : 3:23 a.m.
Let's just take all his money and all the other wealthy people's money and give it to the poor people that don't have it. Makes a whole lot of sense. You realize he was raised in a middle class environment. Worked hard. Earned his way. Guess that's the wrong thing to do. I think I'll sit at home on my back side and wait for "Robin Hood" to bring me the funds I'll deserve for doing nothing.
Diagenes
Fri, May 20, 2011 : 1:22 a.m.
Do you know Gov. Synder personally? It one thing to disagree with a politicians stance on issues, but to hate someone, wow. P.S. A2 .com does the declaration that you hate someone violate your standards?
Mike K
Fri, May 20, 2011 : 12:54 a.m.
"I hate" is such a terrible choice of words.
Kai Petainen
Fri, May 20, 2011 : 12:08 a.m.
i'm not sure what to think of the state budget. i figure it must be a super hard job to figure it out. there are bound to be pros/cons with it. i do care about the local budget and reduction of public safety officials, but on the state level... unless i know more, it's hard to figure out if it's good/bad.
BenWoodruff
Thu, May 19, 2011 : 11:06 p.m.
That would be Clinton-era level. Engler cut taxes, didn't cut spending and totally drained the rainy day fund!
Townie
Fri, May 20, 2011 : 4:18 p.m.
Stan - Facts are facts - Engler drained the rainy day fund and gave the rich tax cuts that led to our infrastructure deficit now. Just a transfer of wealth to the wealthiest and now Snyder and the rich are in control and are decrying the 'deficit' and using it to cut right to marrow of our state. The rich don't care because with the added wealth from all the tax cuts they can easily buy whatever services they need. The rest of us are now paying them.
stan
Fri, May 20, 2011 : 12:48 a.m.
Clinton was never Michigan governor. Under Engler, Michigan achieved the AAA bond rating for the first time ever, only to see that lapse under Jennifer Granholm. Also, Engler spent the rainy day fund that he had been responsible for. He also inherited a large budget deficit when he came into office.
Mr. Ed
Thu, May 19, 2011 : 11:05 p.m.
Now we will have families with school age children moving out of state looking for better schools. We will now have retirees looking to save the money they earned in pensions moving to another state that does not tax a retired persons pension. Who's left in the state of Michigan? All the new jobs being created are in the 10 to 15 dollar per hour range. Support a family on that Rick Snyder.
Mike K
Fri, May 20, 2011 : 12:40 p.m.
Good point awakened; though the quality of restaurant jobs are not exactly what I was talking about, but kudos, it is a job none the less.
Awakened
Fri, May 20, 2011 : 11:28 a.m.
When I go to breakfast in my local diner it is only us grey haired folk in there. If we leave, or do not have money to spend, what happens? The diner closes, the empolyees lose their jobs, the building sits empty. No tax revenue from it. Possibly a drain supporting the unemployed.
Mike K
Fri, May 20, 2011 : 1:05 a.m.
Ever hear of neccessites? Retirees stimulate little. The people who stimulate an economy are the new home owners. Most of us have been there - new windows, new paint, new furnace............. Educated people leave wherever they are from to go where the high paying jobs are. That's what I did in 1992 when I relocated to MI.
Mr. Ed
Fri, May 20, 2011 : 12:27 a.m.
The retirees do spend money because they were the only ones with extra cash.
eagleman
Thu, May 19, 2011 : 11:41 p.m.
Are you being serious? Michigan's education system has been struggling for awhile. If people were so concerned about quality of education they would already have left with the masses fleeing for states with superior job opportunities. Retirees don't really add anything to our economy. They live on fixed incomes and depend on social security. That means they spend less and take more. That's fine. They have earned that, but in their departure actually would benefit us from a financial standpoint.You want youth, not the elderly, for youth will work and contribute tax revenue through salaries and the purchasing of goods and services. The $10-15 statement is true, but that has nothing to do with Rick Snyder. That is a countrywide trend that is not going away anytime soon.
stan
Thu, May 19, 2011 : 9:30 p.m.
I'm glad that Rick Snyder, and not Gretchen Whitmer, is in charge in Lansing. In under 5 months, Governor Snyder has solved Michigan's structural deficit without resorting to one-time gimmicks to balance the annual budget. Next on his list: restoring our state's credit rating to its AAA Engler-era level.
John B.
Thu, May 19, 2011 : 9:23 p.m.
More baloney from our bought-and-paid-for State Government.
Peter Jameson
Fri, May 20, 2011 : 6:03 a.m.
Explain please.......
eagleman
Thu, May 19, 2011 : 11:42 p.m.
As opposed to the baloney that came from the Union-controlled government of Granholm? Wonderful job they did.