From the Detroit News
A newly formed coalition of Michigan CEOs announced Thursday it would support extending the sales tax to most services if it is lowered. Business Leaders for Michigan, an expansion of Detroit Renaissance that includes 25 corporate captains from across the state, would cut the 6-percent sales tax rate to make the change initially revenue neutral. But the plan would raise additional revenue in the future as the state continues its shift away from a goods economy and toward a service economy. David Brandon, chairman of the group and CEO of Domino's Pizza, said a "sales tax on services has to be part of the equation" as the state modernizes a tax code built for the 1950s.
Gov. Jennifer Granholm proposed a 2 percent tax on services two years ago but the plan died in the Legislature. Lawmakers passed a tax on some services late in 2007 but the levy was scrapped.
"The governor welcomes all ideas," said Liz Boyd, spokeswoman for Granholm. "But it is ironic that the business community is now calling for a sales tax on services when two years ago they're the very ones who killed it when the governor proposed it."
Past studies have indicated the state could reduce its sales tax rate to about 5 percent, if it were extended to services, and generate revenue that the 6 percent sales tax on products raises today.
The Matt Millen of governors Granholm's got a point. That's because this services tax plan is a Matt Millenesque idea from this group. NO NEW TAXES. I don't care which side it is from. This will factor heavily in my voting plan if David Brandon ever does decide to run for office. No vote here.
There are the rest of the idea.
The group also proposes:
• Cutting the state government workforce 5 percent to 10 percent and lowering compensation, including benefits, to reflect the national average. - I agree to a point, but I think we need to take a longer look at government in general, not just salaries and workforce.
• Eliminating the state tax on business equipment once the economy starts growing again.- Agreed.
• Scuttling the 22 percent surcharge on the Michigan Business Tax and reducing the corporate levy by 60 percent overall. - Agreed.
• Enacting prison management and sentencing reforms to save $400 million. - Agreed if the plan is what I think it is. Good luck selling it.
• Eliminating binding arbitration for local police and firefighters. - Undecided. Will the alternative cost more or less?
• Ending optional state services, such as programs for Medicaid recipients not required by the federal government. - Agreed.
• Consolidating administration of the state's 500-plus school districts by cutting per-student funding to districts that don't share services. - Agreed to an extent, but this will be real tough to sell.
• Reducing the number of colleges and universities "to a number the state can afford."- Is this state schools only?
• Adopting a funding formula for roads and bridges and supporting mass transit services in urban areas.- Agreed with the first, the latter only if it pays for itself. No more people movers or Wally trains with government money that does not get used.
Business Leaders for Michigan has its own website. They will likely be, for good, bad, and in between, a significant power in Lansing with the new budget issues.