In the Michigan 2010 fiscal year budget, under revenue estimates, there is a distinct note of denial in that the consequence of the tax INCREASE in October 2007 is actually perpetuating the decline in revenue. But lets not let a silly thing like reality cloud a wonderfully crafted budget such as this…
As a part of the budget states:
“Fiscal Year 2008 Revenue
On a Consensus basis, FY 2008 General Fund-General Purpose (GF-GP) revenues
increased by 12.5 percent to $9,359.7 million. Including items not included in the
Consensus base, GF-GP revenues totaled $10,076.7 million. The increase in Michigan’s
income tax rate from 3.90 percent to 4.35 percent and the imposition of the Michigan
business tax surcharge increased the growth rate of FY 2008 revenues. School Aid Fund
(SAF) revenue grew 3.2 percent in FY 2008 to $11,513.0 million.”
Blah blah blah…
The claim that revenues (in some areas) were increased for the 2008 cycle is hardly arguable, however before assigning a glorious and wonderful feel good attitude towards those increases, perhaps an asterisk next to this little “hall of famer” should be placed. Consider that unlike knee-jerk reactionary methods that our representatives use to guide fiscal policy, most businesses actually plan for such changes.
Given that the measly surcharge of 2% for the service tax was turned down, (thus the well earned moniker of “two penny Jenny”) no one expected the full addition of the service tax extension (with modifiers kids!) in the originally passed legislation, and the rushed through passage of the Fiscal 2008 budget. Of course once the blood, sweat, and tears of Michigan’s taxpayers was sampled, the the Countess COULDN’T let go of ANYTHING, and refused to sign on to any further modifications unless it was revenue neutral to the first passage.
Michigan’s governor, Jennifer Granholm would like to claim no part in the declining revenues for the state. An earlier part of the 2010 budget lays out a gloomier national picture:
“In 2009, real GDP is forecast to decline by 1.9 percent – matching 1982 for the largest calendar
year real GDP decline since 1946. Real GDP is then projected to grow at a slow 1.6 percent pace
well.. A 1.9 percent GDP reduction, with Michigan leading the way as ( still ) the major manufacturing leader in the country. But Michigan however, with this manufacturing lead also leads major declining indexes and will show a multiplier in the reality of effect. Though it has not ALWAYS been the case, we are going to see (are already) a larger hit on our own GDP than that number. Add to this a decline in population, and it appears that the remaining taxpayers are going to have to shovel up a little harder to provide the INCREASE PER PERSON in her projected budget revenues.
Her “consensus” claim on the perceived increase revenue numbers is going to likely fall flat, as she has exhibited absolutely no regard to basic economics. As we get closer to the deadline for the passage of this budget, the following factors are going to reveal themselves.
- The MBT hurts business. ..bad
- The demand for the smaller shops which were supported by a once thriving automotive market are only in the process of closing their doors.
- Competition for goods and services will decrease as businesses fail, eventually resulting in higher prices and shortages.
- Energy costs, as a result of Granholm’s policies will rise sharply
- University attendance will lessen due to increased costs and a national trend towards more localized attendance.
But I digress..
So other than adding the increase in tax burden, promoting a “green” agenda which has killed industry in Michigan, pushing money through the MEDC and through grants and credits to failing business ventures and those which never lived up to “expectations,” applauding abortions, accusing a sitting state representative of “Treason” for disagreeing with her policies, and generally lying to the citizens of Michigan, this gal has done an AWESOME Job!
I mean she did declare a John Dingell day recently right?