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Michigan Taxpayers Alliance Updates: January 2009

Monday, January 19, 2009

Rep. Gaffney's 30 silver pieces


If you missed Friday afternoon's news that Governor Granholm had appointed former Republican state Representative Ed Gaffney to a cushy $82,000 job on the Liquor Control Commission, it's because you were supposed to miss it.

You see, politicians hide unpopular news by announcing it on Friday afternoons. The major print media is mostly done writing their Sunday editions, talk show hosts don't return until Monday, and the public's attention has turned to weekend activities.

So, Granholm hopes nobody notices her appointment of recently term-limited Rep. Ed Gaffney. Why? Not because Ed Gaffney isn't a nice guy (he's well liked by Lansing's political class) but because Ed Gaffney was one of only two Republicans in the state House to vote for Granholm's unpopular income tax hike just over a year ago. She owes him - and now she appears to have delivered.

Media and political observers remember how furiously Granholm lobbied Republican House members to support the tax hike. The Governor wanted the income tax increase to be "bipartisan" and House Speaker Andy Dillon wanted to allow politically vulnerable Democrat House members to vote against it. Every 'yes' vote from a Republican meant one more Democrat was free to vote 'no'.

I watched from the House balcony during Granholm's lobbying efforts. One by one, Granholm called Republican lawmakers into the privacy of her Capitol office. 'Privacy' in Lansing is a relative thing, because leaks are more prevalent than on the Lion's defensive line. The Capitol media and lobbying community spread every rumor about what Granholm was offering each lawmaker in exchange for their 'yes' vote on her tax hike. Rep. Gaffney, a term-limited Republican who wouldn't face reelection and with a reputation as a moderate deal-maker, was one of Granholm's prime targets.

A judgeship was what Granholm supposedly offered Gaffney, who is also an attorney. No one except Granholm and Gaffney knows exactly what went on in the Governor's office.

After meeting with Granholm, Republican Ed Gaffney voted to raise your state income tax by 12%, a vote that cost citizens at least $750 million last year.

Now, Ed Gaffney will enjoy his new salary for years to come as a member of the state Liquor Control Commission. Very little press covered his appointment (Detroit Free Press story here: http://www.freep.com/apps/pbcs.dll/article?AID=2009901170335).

Of course, the Senate must first confirm Gaffney's appointment; but they certainly will. After all, Ed Gaffney is a nice guy, well liked by Lansing's political class...

Leon Drolet
MI Taxpayers Alliance

Thursday, January 15, 2009

"Welcome, to Fantasy Island"


Sadly, Ricardo Montalban, the actor who starred in the classic 1970s TV series Fantasy Island, passed away yesterday. Montalban's character greeted new guests to his island resort with the words, "My dear guests, I am Mr. Roarke, your host. Welcome to Fantasy Island".

Michigan House Speaker Andy Dillon played the role of Mr. Roarke yesterday at the Capital in Lansing. Dillon welcomed 46 newly sworn-in state lawmakers, who began their first legislative day in traditional fashion - lobbyist receptions, buffets of food, pomp, and ceremony. Dillon welcomed these new lawmakers with a speech promising a House agenda focused on reform; including tax cuts, politician salary cuts, and new state programs - all with no loss in government tax revenues. Basically, Speaker Dillon welcomed the new lawmakers to Fantasy Island.

The alchemy that Dillon hopes the House can use to maintain state spending, add new programs and still cut taxes is called, "restructuring". By "restructuring" the tax burden, Dillon thinks he can find a magic formula that makes everyone happy by reshuffling the tax code without actually cutting taxes or cutting spending. Dillon believes that somewhere, out there, is an absolute perfect way of keeping people happy while making them pay high taxes. Maybe people don't like high sales taxes? OK. Dillon is willing to lower them as long as people pay higher income taxes. Don't like that? OK, how about higher business taxes instead? No? Ok, he'll cut business taxes, but hike fees by an equivalent amount.

Dillon wants people to believe the fantasy of tax alchemy to avoid having them confront reality: Michigan's net tax burden is simply too high and, to reduce that burden, Lansing must cut spending.

Remember Lansing's last tax restructuring? They "restructured" the old Single Business Tax into the new Michigan Business Tax, then slapped on a 22% "surcharge". Then Lansing "restructured" your income tax with a nice 12% increase. Speaker Dillon knows those moves were unpopular so, in yesterday's speech on the House floor, he promised to try again; to legislatively walk through the mines he'd laid and restructure Lansing's last restructuring. All while complying with Governor Granholm's mandate that government revenues must not be reduced.

Friends, if there ever were a "get real" time in Michigan, this is it! House Speaker Dillon, Governor Granholm and Senate Majority Leader Bishop must stop dabbling in fantasies and start enacting real-math government cost reductions to allow a true easing of Michigan's onerous tax burden. They can start by reading the new publication from the Mackinac Center for Public Policy called "101 Recommendations to Revitalize Michigan."

Leon Drolet
MI Taxpayers Alliance