Michigan looks to close budget gap as deadline looms
MICHIGAN (NEWSCHANNEL 3) – Time is ticking away to the deadline for state legislators to balance Michigan's budget.
The 2010 fiscal year starts on October 1st, and the state still faces a $2.8 billion deficit.
On Wednesday a coalition of social service, education, and labor groups unveiled a plan to help patch that hole.
The pressure is definitely building in Washington, as groups on all sides of the issue continue to lobby in Lansing. Stepping back from all the various issues, the central argument surrounding the budget is whether or not to raise taxes.
Mike Ritsema has fought against higher taxes before, and says he's ready to do it again.
"It seems to me, they understand if we give tax credits and abatement, it creates jobs and business, but they want to raise taxes on employers in the State of Michigan, and they don't correlate the two, it costs jobs," said Ritsema.
Ritsema owns i3 Business Solutions in Grand Rapids. He was a leader in fighting against the failed service tax in 2008. Many said that tax would have arbitrarily raised taxes on many businesses, everything from landscapers to consultants.
"I think it's the nature of government to choose winners and losers and as they looked at the State of Michigan, they said manufacturing's hurting, we're going to help manufacturing, we're going to move taxes over to other businesses and industries," said Ritsema.
Ritsema says he was surprised to hear about a new effort announced on Wednesday to try to revive a form of the service tax, essentially a tax on luxury and nonessential services.
A group called A Better Michigan Future is pushing for an increase in taxes. The group is a coalition of people from the social services, education, and labor. Many in the coalition are hoping to avoid huge cuts to social services, local governments, and schools.
To take care of the budget gap facing Michigan, the group is proposing; extending the six percent sales tax to luxury services, including events like concerts and sporting events, hoping to seek voter support on a graduated income tax hike, and closing business tax loopholes to raise hundreds of millions.
Sharon Parks, the director of the Michigan League for Human Services said that funding cuts would harm many people.
"When the appropriations committee decides what to fund and what to cut, it's apparent the pie they have to work with is constantly made smaller in the form of tax cuts," said Parks.
As far as Michigan's budget goes, Thursday looks to be a big day, as top leaders in the state are expected to have a marathon all-day session to try to hammer out the framework of a deal, whether that will involve cuts or new taxes.
