A little fact about the Senate Republican business tax cut that has been pretty much overlooked by everyone.
The expiring Single Business Tax raises $1.9 billion in state revenue. The Senate plan would generate $1.43 billion. A phased-in reduction in the personal property tax on business equipment would result in a $100 million tax cut next year and a larger break in future years.
Senator Switalski, yesterday-
The budgets we have been voting on and approving in Appropriations represent higher levels of spending over the current fiscal year '07 level. As we all know, the current budget is about a billion dollars in the hole. Now the majority is offering an SBT replacement plan today that cuts revenue by $500 million--according to the Senate Fiscal Agency--and also a PPT cut that starts at $100 million and grows to maybe $700 million, and a flurry of other recent amendments that cut bank taxes and other credits and add more red ink. In fact, Mr.President, I was very glad to see us stop the amendments because every time we did one, we lost more money.
So a reasonable person, like some nice young woman on Wall Street might ask, "Well, how does Michigan plan to pay for fiscal year '08 budgets that are higher than '07 levels, when '07 was a billion dollars in the hole and the Senate fixed the SBT problem by cutting another billion in revenue?"
Indeed. And while everyone is jumping up and down about the House plan, nobody seems to realize that simply replacing the SBT dollar for dollar is not going to take care of the problem.
We need more money. Right now. A little blip on MIRS tells us that the House Dems are going to release a plan to raise the income tax level back to 4.6 percent, with a sunset provision.
House Appropriations Committee Chair George CUSHINGBERRY (D-Detroit) gave notice today of a motion to discharge his bill (HB 4500) that would "reinstate" the state's income tax rate at 4.6 percent until 2012. The rate is currently 3.9 percent and would return to that rate after 2012.
Will this generate enough revenue? I honestly don't know, and I don't have the time to find out. But I do know that it is well past time for the Democrats to step up and do the right thing here. (Senate Dems excluded. They totally rock.)
If they don't make a move to raise revenue and stand up for our state, then they are just as culpable as the Republicans for the destruction of our schools and quality of life.
Keep your fingers crossed they finally get it right.