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Michigan Taxpayers Alliance Updates: September 2009

Monday, September 21, 2009

House Reneging on Tax Hikes?


This week is D-Day for the coming state budget: a balanced state budget is constitutionally required by the end of this week.

Last week, Senate Majority Leader Mike Bishop (R-Rochester) and House Speaker Andy Dillon (D-Redford) stunned the Lansing establishment and angered Governor Granholm when they announced that they had agreed to balance the 2010 budget with federal stimulus money and absolutely NO TAX INCREASES. Of any sort. No "revenue enhancements", no "loophole closings", and no fee hikes. In fact, state spending would actually be cut - for real.

But this afternoon, The Detroit News is reporting online that the "no tax hikes" agreement is in jeopardy.

Friends, I don't do this very often, but I am going to do it now: I am asking you to please call your state senator and state representative. I know that you get these kinds of requests from grassroots groups all the time. Most people just hope that other people will call.

Please take just ten minutes to look up the contact number for your two state lawmakers and call them. Please tell them to balance the state budget by cutting spending with NO tax increases or "revenue enhancements" of any kind.

This will take ten minutes. Here are the links to the contact info for your state representative and your state senator.

Again, I won't ask you to do this more than two or three times in a year. These two calls are the most important calls you can make to your state lawmakers this year. Please.

Here is a clip from this afternoon's Detroit News update:

"Dillon: House may have to propose tax increases for state

Detroit News Lansing Bureau m

House Speaker Andy Dillon said today the House may look at tax increases before the end of the week if there are spending targets that are too difficult to meet before the Sept. 30 budget deadline.

Dillon said after a joint appearance at the Detroit Economic Club breakfast with Senate Majority Leader Mike Bishop, R-Rochester, that he's especially worried about Community Health, Human Services and revenue sharing.

The Redford Township Democrat said it should be evident by 5 p.m. Tuesday -- the deadline for conference committees to pass department budgets -- whether there will be a problem garnering enough House votes to approve certain budgets.

"We may look at targeted revenues before the end of this week," he said.

Asked which tax or fee increases he was considering, Dillon said: "I have a list of what my tax group has put together that we could get the most votes for," but he declined to elaborate.

The speaker said passing a continuation budget for those departments in which spending targets can't be reached "is a possibility," but one he wasn't interested in exercising before taking a shot at getting the entire budget passed. He said voting on budgets could begin as early as Wednesday, but would more likely happen Thursday and Friday."

Ten minutes. Two calls. You may be surprised how much it may help.

Thank you. I'll keep you posted.

Leon Drolet
Director, MI Taxpayers Alliance

Thursday, September 3, 2009

Final battle brewing...


It's happening right now: as tax revenues plummet, the government class is digging in for the battle of their lives to protect their privileged status in Michigan's economy. And politicians are now being forced to take sides with either taxpayers or with public employee unions.

Detroit in the eye of the storm...

Few government reformers have taken on a more impossible task than Detroit Public Schools Emergency Financial Manager Robert Bobb, who is trying to restore fiscal and functional sanity to the national disgrace that is the Detroit Public Schools. Now, Bobb is being sued by a defiant Detroit School Board determined to protect the status quo that they created and have benefited from.

Kudos to Attorney General Mike Cox, who will defend Bobb against the School Board's retaliatory suit.

Detroit Mayor Bing, meanwhile, is facing a fierce, daily battle with Detroit's unionized city employees, who believe they should be immune from the City's 22% unemployment rate, plummeting population, and evaporating tax base. These unions are more highly compensated than employees in similar cities (according to a Detroit Free Press study), but they won't concede a penny in adjusted benefits or pay.

Meanwhile, in the suburbs...

Has your pay been increasing these last few years? The union representing the professors at Oakland University think that a 10% pay hike over the past three years wasn't good enough. These professors (all public employees paid with your tax dollars) are preparing to strike today. They received raises of between 3% and 3.25% each year since the last contract approval in 2006, but their union isn't satisfied and wants even more.

Most students and their financially struggling families have experienced big income decreases these last few years, while tuition has gone up and up. These students, who already paid their tuition this semester, will likely be without professors in their classrooms this week.

Lansing's big battle...

Less than a month is left before the state is required to have a budget in place, Stunningly, Governor Granholm has yet to even propose a budget. Senate Republicans have actually proposed and passed a balanced budget with NO tax hikes. Granholm's proposal? Bring in "mediators" to coax Senate Majority Leader Mike Bishop into allowing another round of tax hikes.

And public employee unions are weighing in. A new organization of public employee unions and social service organizations is urging Granholm to raise taxes on citizens again - by $3 billion - with increased business taxes, re-instating the death tax, and promoting a graduated income tax.

But the tax eaters don't really expect to win their $3 billion is tax hikes this year. They know that this year's state budget is merely a preliminary skirmish before next year's really big battle. This year's budget is important, but federal stimulus money will help conceal much of the state's structural deficit for one more year. Next year's "budget crisis" will be more than double or triple the problem of this year's state overspending - and the public employees know it. Their strategy is to use this year's budget to dig in and prepare for next year's major battle.

Citizens are catching on...

There is more and more mainstream media coverage of the extraordinary pay and benefits that the government class - public employees and politicians - receive compared to citizens. Check out this recent Free Press article.

Democrat House Speaker Andy Dillon's modest proposal to address the cost of public employee health benefits was an unexpected shot across the bow of the public employee unions. The enormous attention that Dillon's proposal attracted from both the media and the government class is testament to the growing understanding that something must give: either taxes must be hiked (again), services to citizens slashed, or the cost of providing services must be reduced by right-sizing the extraordinary benefits provided to the government-class.

Dig in, friends...

Next year will be unbelievable compared to this year. The impact of plummeting property values will finally start kicking in for local governments and public schools. The state budget will implode under unsustainable spending without increased federal subsidies.

And the government class knows all this. They are preparing to defend every pay hike, paid holiday, benefit, perk, and privilege they get at your expense. And they will fight with everything they have.

The future of Michigan will be at stake like never before. Watch your local and state lawmakers. Accept no excuses. This next year - starting with the current skirmish in Lansing - will absolutely force politicians to take sides as never before.

Whose side are your elected officials on?

Leon Drolet
Director, MI Taxpayers Alliance