What To Expect In Snyder's Budget Proposal

By: Liam Martin Email
By: Liam Martin Email

LANSING --The state House Tax Policy Committee gathered Wednesday, anticipating Governor Snyder's budget proposal -- and expecting deep cuts across the state.

"There isn't much left. We've cut to the bone," state Rep. Mark Meadows, D-East Lansing, told News 10. "There have been cuts that have been on since Granholm was elected in 2002."

As for Snyder's proposal Thursday, News 10 has learned there will be some major changes proposed to tax policy, and here's how the math will work.

Snyder is expected to call for the elimination of the Michigan Business Tax, replaced with a flat 6 percent rate -- adding about $1.5 billion to an already $1.8 billion deficit.

To pay for it, he'll likely propose the elimination of some business tax exemptions (expected to reduce the deficit by about $2 billion), a reduction or removal of the Earned Income Tax Credit (which costs the state about $330 million a year) and a tax on pensions, which were previously exempt (extra revenues of about $1 billion from that).

Some lawmakers, like Meadows, are upset about the potential for new taxes on those last two groups.

"Instead of a broad-based tax increase that applies to everybody in the state, it only applies to low-income folks and retirees," he said. "I simply can't support those measures."

But others, including many Republicans, say the tax breaks for businesses must be recouped in the budget, one way or another.

"We wanna get down there and have a much better, stronger tax structure that supports business, and allows business to grow," said state Rep. Paul Opsommer, R-DeWitt.

And there are expected to be serious reductions in funding, including (1) Reduced pay and benefits for state workers; (2) Cuts to just about every state department, especially Corrections and the Department of Human Services; and (3) A potential pull-back in funding for non-mandatory services for Medicaid recipients.

In end, the governor, who will deliver his proposal alongside Lt. Gov. Brian Calley and budget director John Nixon at 11 a.m. Thursday at the Boji Tower, is expected to push for his budget to passed by June 1, and to leave the deficit at zero.

As for his rolled-up budget approach, which would force the legislature to award lump-sum amounts to each department and allow Snyder to then divy up how the departments spend that money -- both Republicans and Democrats have said they're not willing to relinquish that much power to the executive branch.

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  • by jerry Location: jackson on Feb 17, 2011 at 12:51 PM
    if the state of michigan wants to spread the cuts all around then I have a great suggestion. Maybe we should look at making our state legislators and state representatives part-time because they really dont do much there except fight with each other over ideas that dont benefit them. As for the state employees, over the years they have given and given when the state was in financial trouble. but what do you do, the goverment will win out every time
  • by Sandy Location: Lansing on Feb 17, 2011 at 08:28 AM
    Looks like Voters made a mistake on who they voted for. I am a retired State Employee who has seen much abuse within. We had manager upon manager hired who make 3 times the money the workers do. A few only had 2 employees so sat with their feet upon their desk playing games on the computer. Gov. Granholm never bothered to go into a State building and Snyder won't either. Both interested in their own friends being put in office and not keeping up on why so much money is spent foolishly. Ask State Employees that have been there for awhile and have seen it over and over. Don't ask the Managers. Maybe Snyder should have a meeting with retirees. We can tell him who and where.
  • by david Location: charlotte on Feb 17, 2011 at 07:09 AM
    its about time that someone in lansing had the guts and nuts to do something about the problem that this state faces i am a poor person with two kids and will lose the earned income credit but i am willing to do so if it means that the state gov. will shrink and the privit sector grows everyone says that they want cuts in gov. but when it comes down to it oh no dont cut my intidelment and as for gov. snyder you go gov.
  • by Anonymous on Feb 17, 2011 at 05:06 AM
    30 million surplus after all of the costs. A state budget is year to year. And of now Snyder has done nothing but talked and the is all Jenny did, so they are tied.
  • by terry Location: mi. on Feb 17, 2011 at 04:01 AM
    leave the retires alone we paid our dues. what part of limited income dont you understand.get rid of your special intrest groups.etc.cut your wages,cut your own throat and leave mine alone.cut cut cut cut.its because of foolish gov. spending that got us here today.just like our president,were broke but he can travel all over. try setting a example.
  • by Anonymous on Feb 17, 2011 at 02:46 AM
    I get 429 a mo.he's going to get a lot of tax out of me.I am already poverty.Many just don't know it but there are so many more out there making less than 1000.a mo.really try living on that & when gov people keep taking away more & more,I feel the suffering is uncalled for.The poor have gave more & more so the rich man can stay rich.Our backs are broken.
  • by Blake on Feb 16, 2011 at 06:36 PM
    Well, DHS & CPS might as well have their doors locked and everyone sent home. They don't do anything anyways. That alone may help with the defecit. 30 million dollar surplus doesnt go very far, when your dealing with BILLIONS of dollars in budget costs. Thats like making 1000.00 week and saving 20. dollars for emmergencies. Just doesn't cut it. And Really! Complaining about the Governor at this point when he JUST got in 6 weeks ago?! He already has done more than Jenny G did in 8 god awful years that she was in!
  • by Anonymous on Feb 16, 2011 at 05:48 PM
    1.5 1.8 = 3.3 billion deficit 2 1 330 million = 3.33 billion leaving a 30 million dollar surplus? Why are more cuts needed?
  • by Scotty Location: Macomb on Feb 16, 2011 at 05:17 PM
    Gov. Snyder needs to steer away from taxing retiree pensions and the earned income tax credit, which would disastrously affect two groups who are already low income and instead spread increased tax revenue generation to all state residents on a more equal basis. Just as much revenue could be generated by adding taxes to alcohol (beer and other products), increasing the sales tax, taxing food sales, etc. However, everyone in Lansing is afraid of the lobbies, so instead, the Governor wants to devastate these two groups who do not have the same level of support to defend against these monetary attacks. Just my opinion.
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