State’s budget surplus makes for hard questions — and opportunities

January 10, 2014
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Gov. Rick Snyder has scheduled the annual State of the State message for 7 p.m. Thursday, and there is no shortage of attentive constituents, particularly in light of the reported House Fiscal Agency estimate last week showing improved economic conditions will provide $327 million more in revenue than projected for the fiscal year.

Associated Press reporting of the announcement noted that is added to the $433 million additional revenue over projections last year, and similar Senate projections would total additional revenue at $1.1 billion to $1.3 billion by May.

Let the discussion — not the fighting — begin.

In an election year that sees the governor running for re-election, it would be enticing and painless to suggest that legislators focus on a rollback of the personal income tax increases they saw fit to bump from 3.9 percent to 4.25 percent after providing significant business tax relief, and a death date for the hated Single Business Tax.

It would be far more difficult to resolve to invest those funds in the future.

While Snyder maintains a laser focus on “relentless positive action” and uses selected statistics to paint an optimistic picture of the present, Michigan’s economic outlook by 2020 is more miserable than merry.

Based on separate bodies of research by Michigan State University economics professor Charles Ballard and University of Michigan economist Don Grimes, those projections are built on the slow economy, coupled with an increasingly large “retiree” population and a labor force defined in census statistics as a far less educated population (compared to other states), averaging at best about 26 percent with college degrees. Educational attainment directly ties to household affluence — and future tax revenues.

Who, then, might decline the political super shot of (short-lived) tax decreases, and put the money toward Michigan’s future?

Business Leaders for Michigan is among those business groups now more actively advocating impactful increases for P-20 education funding.

Another serious issue looms, too: that of the continued and escalating liabilities for unsafe state highways and bridges.

Mother Nature’s polar vortex last week was as much an immediate budget and road killer as years of neglect and decline.

Is there an adult in the Chamber? Tell us, Gov. Snyder: What’s a “priority”?

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