Local officials also worried about effect of SBT repel

According to a story in the Monday edition of the Livingston County Daily Press & Argus, local officials are worried what cuts they will have to make because of the cowardly vote of Chris Ward and the Michigan Legislature to repel the Single Business Tax without a replacement in sight. They should be.

Cutting $2 billon and 25 percent out of the state budget will be made up by the cuts and elimination of essential services and an increase in our tax burden. This is on top of the three years of cuts, increases in fees, belt-tightening and other tough choices the Governor has had to make to balance the budget after the last administration left the state’s finances in a mess.

According to the article, ‘That, in turn, has officials like Howell City Manager Shea Charles worried that some of the approximately $200,000 in discretionary money from the state that the city gets every year will disappear.
"Cities and villages across the state are bracing for more cuts from the Legislature," he said. "It's a fear that we have as a municipal community."
Howell gets about $200,000 annually in so-called "statutory" revenue sharing, which is set each year by the Legislature, and more than $600,000 in "constitutional" revenue sharing, which is guaranteed by the state constitution. Brighton receives about $600,000 in both kinds of revenue sharing combined.’

When asked if the revenue sharing that helps pay for police, fire and local road repairs for local governments will be cut, Chris Ward had a great answer.

"It's possible," he said. You think?

Ward has introduced a bill to tax gross receipts of businesses in lieu of the SBT, but it would fall $250 million short of replacing all the revenue.

However, that’s his opinion, and where he got those figures no one knows. Actually, it’s most likely the opinion of one of the lobbyists that has his ear and pays for his meals, and it will be the industry the lobbyist represents who will most likely benefit at taxpayer expense. The nonpartisan House Fiscal Agency or the Legislative Services Bureau (LSB) has not yet issued a report on the effects the bill will have. It has not even looked at this bill, and there is no sense of urgency to look at this bill.

Ward goes on to say, ‘the sacrifice of less spending is necessary to get the state's economy moving again.’ But an Anderson Economic Group study paid for by the House Republicans released last week said Michigan isn't doing as badly as some might expect in terms of the burden it places on businesses, and the study puts Michigan at 27 out of 50 states in total taxes paid by businesses as a percentage of profit earned within each state. Certainly not the alarm sounded by Ward, and it’s almost right smack in the middle. The middle is a pretty good place to be.

As pointed out by Mike McGonegal in the article, no reputable business is going to want to relocate to Michigan because the tax structure is now so unsettled, and they have no idea what the cost of doing business will be. To illustrate that fact, just hours after the House and Senate voted for the early repel of the SBT, the rating agency Standard & Poor's gave Michigan a negative outlook on its credit rating.

A Joint Select Committee is supposed to come up with a replacement of the complex SBT that was enacted in 1976 that combines seven separate taxes into one, but the committee will not even meet until after the November election. Basically. What that does is pass the buck on to someone else.

Actually, that may be the smartest thing the Legislature has done.

We need someone like Mike McGonegal to find a workable solution. Mike has 28 years of business experience, is not afraid to make a tough or unpopular decision and can work with both sides of the aisle. Ward has none of those qualities.