I just received an email from a reader named David Palmer. He wanted me to read a MySpace post by our former Assistant City Manager (who is now the City Manager of Ferndale) on the State of Michigan’s current budget crisis. As I found the analysis to be pretty damned good, I thought that I’d reprint some of it here for your consideration:
Tomorrow is the big day. The state legislature and governor must make a budget deal tomorrow to avoid a shutdown. Republicans are calling on Governor Granholm to accept a 30-day budget extension. However, this will only increase the budget deficit and make it more difficult to balance. Why should we believe the state legislature will do in the next 30 days what they have failed to do in the last 300?
I do not normally weigh in on state policy issues. However, I cannot remain silent on the state’s current budget crunch any longer. I am a non-partisan professional administrator appointed by the Ferndale City Council based solely on my qualifications and I refrain from all political activities which may undermine public confidence in professional administrators. I mention this so that you may understand that my comments and concerns are those of professional resident rather than a partisan.
Like many Michigan residents, I have been watching the budget negotiations in Lansing with bated breath. I receive daily communications from colleagues in education, local government and other sectors warning of the harms of further state budget cuts. As a result, I am convinced spending cuts will jeopardize vital public services such as public safety, health care and education.
Michigan’s communities and public safety agencies are heavily dependent on state revenue sharing. Revenue sharing is an important promise the state has been making to local communities since the 1930s. Today revenue sharing is more important than ever before because the interaction between the Headlee Amendment and Proposal A has created an institutional formula for bankrupting Michigan’s communities. 2006 marked the sixth consecutive year of cuts to revenue sharing. That amounts to a $1,100,000 annual reduction for the City of Ferndale. We have 1,600 fewer police officers and 2,400 fewer firefighters in Michigan today because of state budget cuts….
The facts are clear: Michigan is not a high tax state. Michigan is spending less as a percentage of total state income on state government today than it has in 20 years. The Detroit Free Press reported this spring, “A new study by Federal Funds Information for States (FFIS) ranks Michigan 23rd in per capita state and local taxes and fees, and 21st in total revenue as a percentage of personal income statewide.” Michigan taxpayers in 2005 paid 9% less of their income to state and local taxes than they did 10 years earlier. In state spending, Michigan is spending a far smaller piece of its income today than it did in 2000 — in fact, we are $5 billion below the Headlee limit, the level proposed in conservative Richard Headlee’s Constitutional Amendment as the amount of state spending Michigan must not exceed.
At one point in the recent debate, state lawmakers seemed to have reached consensus on increasing the state income tax rate from 3.9% to 4.3%. The debate then focused on whether to make cuts of about $1 billion or increase the state income tax rate all the way to 4.6% to resolve the remaining deficit. For historical reference, Michigan’s state income tax rate was reduced from 6.35% to 4.6% in 1986, to 4.2% in 2000, to 4.0% in 2003, and to the current 3.9% in 2004. The state income tax rate has not been this low since 1971. That means the income tax rate has never been lower for an entire generation of taxpayers like myself. According to the U.S. Census Bureau’s 2006 American Community Survey, Michigan’s median family income (in 2006 inflation-adjusted dollars) was $57,996. That means state lawmakers were essentially debating whether to jeopardize vital public services or increase the average income tax bill by $173.99 a year, $14.50, a month, or $3.35 a week. How much is Michigan’s future worth to you?…
If I knew more about the intricacies of the Headlee Amendment and how it’s fucking* older Michigan towns like ours, this is the point where I would insert a rant and call for its immediate destruction. As it is though, I’m just going to make my way across the room, pop in a Battlestar Gallactica video, and try to forget about the fact that my City and my State are tanking.
(*Sorry for the profanity. I tried to substitute “making love to,” but it just didn’t pack the same punch.)