From Booth News Service (AANEWS owners)
Her November replacement to the state's Single Business Tax, scheduled to expire in 12 months, raised the same $1.9 billion as the SBT. With Republican lawmakers and business groups clamoring for a net tax cut, Granholm said she may instead pursue an increase in net business tax revenue if the size and scope of the budget problem "changes significantly" when new fiscal estimates are reached in January.
"You have to have a competitive tax climate, but you also have to have an educated workforce," Granholm said.
After touting the new Michigan Promise $4,000 college scholarship to high school students on Tuesday, Granholm said she wants to avoid cuts in higher education and to boost spending for community colleges and universities in the 2008 budget, which she'll present in early February.
She said avoiding budget cuts in education, health care and public safety during a budget crisis requires "looking at things differently." Despite repeated prodding from reporters, Granholm declined to say whether that meant lobbying the public for a tax increase that she and lawmakers largely avoided in her first term.
One of the ideas kicking around Lansing, if not in her administration, is cutting the 6-percent rate of the Michigan's sales tax, but extending the tax to consumer services ranging from hair styling to sports tickets to the labor on a home roof replacement.
Economists say taxing services -- excluding health, education and those purchased by business -- could net the state $1.3 billion in new net tax, even with a cut in the sales tax rate.
Granholm's business tax strategy has been to capture tax revenue from areas of the economy projected to grow in the future. The same principle applies to the sales tax. And the growth potential for sales tax revenue is in consumer services, not goods, said said State Treasurer Robert Kleine.(snip)
So Jenny is going to push to tax one of the growing segments of the economy so it gets slowed down. That's really stupid. Why not send more jobs out of state and to Mexico/China.
It's about time we take a close look with a scalple at all the money that goes to health, education, and public safety (and everything else for that matter) - and see where the money there really goes, and why it costs what it costs. How much of the cost is OVERHEAD/Administrative? In the education field, much of the money goes to pensions, retirements, and that 800lb gorilla known as MESSA (with high administrative costs - 20% if I remember right although I need to look that up). As far as health care goes, according to Jerry Zandstra in the senate debates, 31% of the health care cost is overhead and 5% of the cases are 50% of the cost - Diabetes, Obesity, and Heart Disease. As far as public safety goes, I'm less familiar on those issues, but I think we need to look at who we throw in jail, whether jail is the appropiate place for them, and what are good alternatives to jail for nonviolent offenders or stupid decisions which break the law. While we need to toss the real bad guys away, should someone be locked up for smoking a joint? (And before anyone asks - no, I don't do that stuff)
I'm waiting to see what Granholm's plan is and any plans from the GOP (And we better have a good one) before any final decision, but I don't like what I'm reading so far from Granholm here. If this stuff increases, I may have to move once I finish my 2nd degree.