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Michigan State AFL-CIO eActivist Network |
An Overview of Michigan's Financial Crisis This situation did not develop overnight. While he was governor, John Engler signed 32 tax cuts into law, including the elimination of the state inheritance and capital gains taxes, and annual reductions on taxes to businesses. After 12 years of Engler tax cuts and six years of Bush tax cuts, we have (again) proven that the Reaganomics of a "trickle-down" economy don't work! As the state suffers through a prolonged economic downturn, high unemployment and a resulting increased demand for state services. Today, we are not collecting enough revenue to meet our needs but more tax cuts and more budget cuts are just more of the same, and that's not the answer. More than $4 billion has been cut from state services and programs since 2001. Higher education spending has been cut by more than $250 million forcing students and their families to deal with significant tuition increases. Public schools have faced mid-year spending cuts twice. Spending for local governments, primarily police and fire protection has been cut by $585 million resulting in a loss of police officers. Despite these actions, the state does not bring in enough money to fund the health care, education, safety and other services it provides to citizens. When the state Legislature eliminated the Single Business Tax (SBT) last year, it eliminated nearly $1.9 billion in revenue the state uses to fund health care, education and police and fire safety. That shortfall compounds an already challenging situation with both the state's education and general fund budgets. |