Fixing Michigan's financial situation: the state should look to structural reforms and budget cuts.

Author:Jones, Samantha

The last few years, Michigan's budget. Situation has looked bleak. A series of quick fixes have kept the state afloat, but that all culminated in September's legislative marathon. The result of the legislature's work in September was an increase in the income tax from 3.9 percent to 4.35 percent and a 6 percent sales tax on services that was combated by the entire business community. The sales tax on services was repealed by the legislature in December and replaced with a surcharge on the Michigan Business Tax (MBT).


With the numbers at January's revenue estimating conference once again showing decreased revenue even after a lax hike, Michigan's legislators are raced with the same tough decision--to cut services or to raise taxes. Raising taxes last fall proved to be a challenge and wildly unpopular, with the House literally holding its voting board open for days at a time to garner the voles needed for the tax hike. The overall message is that the state cannot continue to spend more than it's taking in. Significant cuts need to be made, and no increased spending can be tolerated. What Lansing needs to be...

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