How is this for a shocking and outrageous statement: Taxes are wonderful. They are what make civilization possible. What’s more, anyone who says we are paying too much in taxes, especially in our once-great state of Michigan, is either an ignorant dupe of unscrupulous demagogues, a high-level deadbeat or a variety of shortsighted fraud.
Now for the punch line: Everything above is absolutely true. What’s more, the state needs to raise taxes next year, at least temporarily, or risk turning this state into some northern version of a backwater like Alabama.
Before you start screaming, consider the facts, not the lies you’ve been told by generations of corrupt politicians, especially Republicans. If it weren’t for taxes, our lives would be pure hell, unless you fancy the life of a Cro-Magnon peasant.
Taxes pay for the roads and the schools and national defense and the police. Taxes pay people to build pipes to carry our poop away and pay people to carry our garbage away. They have created great universities in this state, lighted the streets, saved us from epidemics and pestilence and rabies, and taught Susie and LeMar how to read.
Does that mean we like paying them? Certainly not. Everybody, me included, wants something for nothing. And all of us want more disposable income than we have. Have some taxes been too burdensome or repressive? Absolutely. Too-high taxes hurt society by helping to kill any incentive to work harder.
That’s what’s wrong with socialism. We are nowhere near that point, however, and there is a mess right now in Lansing. The state is currently not able to take in as much money as it needs to spend. The reasons are complex, but experts in both parties tell me they are based in large part on wishful thinking. Everyone assumed in the superheated 1990s that the high-tech boom would last forever. So state officials and legislators took that as a given when they were making decisions that affected how much flows into the kitty. Unfortunately, things took a mild downturn, and now the state is in trouble.
I’ll spare you the heavy-duty economics, but to make it simple, Michigan, unlike the federal government, is legally required to balance its books every year. This year, it’s on course to take in about $500 million less than it is spending. Next year, that shortfall will balloon threefold to $1.5 billion and stay there as far as the eye can see.
This leaves an enormous problem for Gov.-elect Jennifer Granholm and the newly elected, solidly Republican Legislature she’ll arrive with. Where do you get that money? Her opponent, Dick Posthumus, chose the route of fiscal irresponsibility. He vowed he wouldn’t raise taxes, no matter what.
Granholm, to her credit, would say only that she didn’t want to raise taxes. By now, she must surely know the truth. To avoid badly damaging the quality of life we enjoy in Michigan, we need, at least for a time, tax increases.
But is there any way she can persuade the right-wing Republicans who control the Legislature that this must be done? Here’s the problem. Everyone knows the stories of waste, fraud and abuse of taxpayer dollars, from featherbedding to welfare queens to the boondoggle programs.
But John Engler and Co. already have wrung all the fat out of state government, along with a portion of healthy muscle. Incidentally, the budget deficit is in what’s called the general fund, and all the cuts to fix it need to be made there.
Years ago, there was a lot more room to cut. But now it pays mostly for higher education, community health, prisons and the Family Independence Agency. Early on, Granholm talked about an across-the-board spending cut of maybe 10 percent. But there’s no way that can happen. Do you really think they will cut prisons?
A. Thomas Clay, a truly nonpartisan economist who has worked on Michigan budget matters for four decades, tells me “higher education could take a real hit. This implies over 20 percent tuition increases,” program closings and other bleak prospects.
What do those of you who go to college or have kids there think about that? Michigan has attracted national funding and private industry spending because of the Cadillac quality of its universities, especially the big three — Michigan, Michigan State and Wayne State University. Lower the quality, and those outside dollars will scram.
The state could also conceivably drastically reduce two optional Medicaid services — providing pharmaceuticals and providing nursing home care for indigent seniors. The social impact that would have on their middle-class children would be almost inconceivable.
Naturally, there are some cuts that can be made. But what has to happen first is that the Legislature must postpone a scheduled further rollback of the state income tax. Then lawmakers have to face up to raising more revenue.
Twenty years ago, facing an even larger budget deficit, incoming Gov. James Blanchard took the statesmanlike approach of asking the Legislature to temporarily raise the state income tax. Angry voters recalled two Democratic state senators. But the state paid its bills and didn’t destroy the things that made it great. Things got better, the tax went down, and Blanchard was re-elected by the biggest margin in Michigan history.
We’re about to see what our new leaders, and we ourselves, are made of.
Incidentally, I’ve been in places like Western Europe and Japan where they do pay more taxes, and where roads and services are better, and in many ways so is the quality of life.
Back in the old days, conservatives liked to snort that “There ain’t no such thing as a free lunch.” They were right. They still are.
Jack Lessenberry opines weekly for Metro Times. E-mail [email protected]
