Rick Snyder releases 17-page executive budget memo, outlining deep cuts in spending
Gov. Rick Snyder's office has released a 17-page copy of the governor's executive budget recommendations for fiscal years 2012 and 2013, laying out plans for large cuts in funding to schools, universities and municipalities throughout the state.
Businesses would see tax breaks as the Michigan Business Tax is repealed and the state focuses on economic development.
Ryan J. Stanton | AnnArbor.com
In his cover memo, Snyder repeats what he said in his State of the State address — that reinventing Michigan demands the state break "the bad habits of the past." Snyder says state government has been spending more than it receives for far too long, and a gaping budget deficit and serious problems have resulted.
"These are problems that cannot be fixed with accounting gimmicks or a one-time infusion of federal money," Snyder writes in his letter. "These are problems that require the resolve to make tough decisions. I have been clear that the months ahead will not be easy. They will involve difficult but necessary changes to bring Michigan’s budget into structural balance."
Snyder repeats his calls for shared sacrifice, and says his budget will lay the foundation for economic growth, job creation and a robust future for Michigan.
"It’s a responsible budget that cuts $1.8 billion and tackles other necessary reductions for a long-term solution to our problems, while providing a critical safety net for Michigan citizens in need and preserving core, essential services," Snyder writes. "It provides the course correction that is needed to help businesses succeed and create jobs."
The budget is being submitted in conjunction with a restructuring of Michigan’s tax system, including eliminating the Michigan Business Tax — to be replaced with a flat corporate income tax set at 6 percent. A scheduled reduction in the individual income tax rate from 4.35 percent remains and will be fixed at 4.25 percent under Snyder's plan.
Snyder notes in his proposal that Michigan is one of only three states in the nation that exempt most or all of pension income from state income tax. He says his plan will broaden the base of taxpayers by including all those earning private and public pensions.
Snyder is calling for adoption of his budget plan by May 31.