While it has been over a year, the business community still hasn't forgotten the budget battles of 2007 in Lansing. That is in part because, as a result of the compromise to rid the state of the service tax, businesses were slapped with a 22 percent surcharge on their Michigan Business Tax bills to help mitigate the expenses. The Legislature promised that once they got through the initial battle, they would get serious about budget reform. Over a year later and those reforms still haven't come.
That is why the Chamber decided to help them find the reforms that are needed to make the surcharge go the way of the dodo bird. Understanding that reforms can't be limited to one area, the first project undertaken was a close examination of the Department of Corrections.
Corrections spending has grown 538 percent in the last 34 years, making Michigan one of only four states that spends more on corrections than it does on higher education. There has also been a dramatic increase in the number of inmates being housed in Michigan correctional facilities. In 2008, corrections spending in Michigan was $2.08 billion, $1.9 billion of which was spending from the general fund. This represents 5.2 percent of all state expenditures and 20 percent of all general fund appropriations in the state, an increase from 5 percent in 1983. Current projections anticipate spending to increase to over $2.6 billion by 2012.
The state's incarceration rate of 511 prisoners per 100,000 residents is 56 per 100,000, higher than the 50 state average, and 120 per 100,000, higher than the Midwest average. In the 30 years after 1975, Michigan's population increased 11.3 percent. The prison population at the same time increased 356 percent to well over 50,000 inmates.
With that in mind, the Chamber Board of Directors recently adopted a policy in favor of reductions in the Corrections budget that addresses the two primary drivers of high costs. The Chamber favors "right-sizing" the prison population and maximizing our current investment in prisons.
Several steps need to be taken to right-sizing the prison population. Some might think that this means we need to send fewer people to jail. In reality, we could take a huge step towards reducing prison costs by reducing our average sentence to comply with the averages we see in other Great Lakes states. This means that we have to reform the parole board. In the early 90s the parole board was...