ansing -- Gov. Jennifer Granholm defended her proposal to extend the sales tax to services on a cable TV news show this morning, saying Michigan "has to invest in education" to convert from a manufacturing to a knowledge-based economy.
The governor said on MSNBC that Michigan has "a big, hairy audacious goal of doubling our number of college graduates." In order to do that, she said the state has to stop cutting education spending, which it did this year by $165 per student.
Since public school aid is funded primarily with sales taxes, the state needs to update and stabilize its sales levy by expanding it to include most services, Granholm said. In the past century, about 60 percent of consumer purchases were made on goods and today about two-thirds is spent on services, she said.
From The Detroit News: http://www.detnews.com/article/20100329/POLITICS02/3290392/1022/Granholm--Sales-tax-on-services-needed-to-bolster-education#ixzz0jaR7wdmG
This ain't new. Granholm pushed this in 2009
This is a big threat to occur however. It's not just Granholm pushing this. Pete Hoekstra has signed on board with this. Self proclaimed Business Leaders for Michigan is on board.
I don't see solutions, only gimmicks and demands that people bail out the government for their fiscal mismanagement. The problem is jobs. The sales tax revenues are down because people are spending less.