Change is tough, but needed to spur economy

 

I take seriously the faith and responsibility that the voters of the 35th District have entrusted in me. As their voice in the Senate, I always put the long-term interests of Michigan first.

Michigan is facing many serious challenges. Solving the state’s $1.5 billion budget deficit, reinvigorating our economy and helping create jobs all at the same time has forced us to make several tough decisions.

State government and its leaders must be innovative and restructure how the state operates if we are ever to resolve our economic and fiscal problems. We are reducing punitive regulations and government interference, and we are finally reducing state spending.  The current state budget is $47.2 billion and the Senate-passed plan for 2012 is only $45.7 billion – a cut of $1.5 billion.

Most importantly, the plan sets a foundation for long-term economic growth and job creation.

It calls for shared sacrifice, which means everyone must pitch in. I personally took a 10 percent pay cut, all senators reduced their office spending by 20 percent, and now public employees need to share in the cost burden of their benefits.

Protecting the students in the classroom is a top priority, so we kept the education reduction to less than 2 percent, compared to cuts of 15-22 percent to higher education, 6 percent to agriculture and 20 percent to the Secretary of State.

When the state revised its revenue estimates in May, we gave the bulk of the extra funds – $330 million – to schools. We also passed reforms that will help save schools millions of dollars.

A common misconception that I hear is that the School Aid Fund cannot be used to help fund higher education. The Legislature is explicitly given that flexibility in the Michigan Constitution. Article IX, Section 11 states: “There shall be established a state school aid fund which shall be used exclusively for aid to school districts, higher education, and school employees’ retirement systems, as provided by law.” That language seems precise and straightforward. 

It should be remembered that since 2000, lawmakers have tapped more than $1.6 billion from the state’s General Fund to shore up K-12 education funding. 

In 2007, Gov. Granholm raised income and sales taxes by more than $1 billion. A month later the sales tax on services was replaced with a 22 percent surcharge on the Michigan Business Tax. A few special interests – like film producers – were given tax breaks, but the vast majority of residents and job providers were hit hard.  The impact on our economy was devastating.

That is why we made important tax reforms, including eliminating the MBT. Many of the northern Michigan manufacturers I have met may actually pay more under the new corporate income tax. The largest beneficiaries of the tax reform will be the locally owned small businesses right in our communities. They create 80 percent of Michigan jobs, but they were hurt the most by the MBT. Thanks to our reforms, small business owners will no longer be double taxed and will continue paying the same income tax we all pay.

Unlike past budgets, this plan is truly balanced. It recognizes that the state cannot afford our current spending, and it does not use one-time fixes or federal bailouts to cover our fiscal reality. The plan is based on sound budget principles and improved efficiency. Holding every program and tax dollar accountable enables us to get the greatest “value for the money.”

The state needs to change how it does business. Change is tough, but it is needed to spur our economy, create jobs and brighten Michigan’s future.

Darwin L. Booher
State Senator – 35th District