Cynical Synapse

Tue, 18 Oct 2011

Smoke and Mirrors Bus Tour: Tax Cuts That Aren’t

Filed under: Congress, Deceit, Economy, Employment, Government, Language, Politics, President, Stimulus, Taxes, Unemployment — cynicalsynapse @ 8:24 pm

Pres. Obama and his stealth bus

Pres. Obama has been traveling around North Carolina and Virginia in his Stealth Bus, the all-black $1.1 million Canadian-American customized luxery coach, the Death Star of the roads. Republicans claim the trip is a taxpayer-funded campaign tour, a charge the White House denies. Let’s face it, anything a politician—of any party or persuasion—does or says in public has a campaign element to it. So, all you Republicans who felt Pres. Bush got chastised by the media for everything he did, get over it, stop pointing at Obama, sit down, and stop saying “but, but, but…”

Features in the American Jobs Act, uncannily similar to 2009’s $720 billion Stimulus, seems like a half-hearted attempt, at only $448 billion. More troubling is the fact it’s not really a new idea and, if Big Stimulus didn’t work, why would anyone think Baby Stimulus will? Maybe that’s why Senate Democrats didn’t take up Obama’s bill, but saw their own version defeated last week. Even so, it gives the President political mileage: “100 percent of Republicans in the Senate voted against it [the Jobs bill]. That doesn’t make any sense, does it?”

Pres. Obama in Jamestown NC

One of the points in Obama’s jobs plan is payroll tax cuts, intended to put more money into workers’ pockets and encourage employers to hire at reduced costs. What the President doesn’t tout is he wants to extend the current worker tax cut, due to expire at the end of the year, and increase it from 2% to 3.1%. That’s just half of the normal 6.2%. He’s already blaming Republicans if this doesn’t happen and he can just see jobs withering away from less money in your pocket.

Fact Check: First, the current extra pocket money is not making it into the economy as most people pay down debt or save it. Something else no one is talking about is the payroll tax holiday reduces contributions to the Social Security Trust Fund. Has anyone forgotten the dire predictions for the immenent collapse of Social Security?

Wizard of Oz

Smoke and mirrors: here are a few coins for your pocket today, but they won’t be there when you retire. In this case, paying it forward doesn’t make any sense to me. In his speech in Jamestown NC today, Mr. Obama obfuscated the matter (emphasis added):

So don’t be bamboozled. (Laughter.) Don’t fall for this notion that somehow the jobs act is proposing to raise your taxes. It’s just not true. Under this—here’s what will happen. If we don’t pass the American Jobs Act, if we do not pass the provision in there that extends the payroll tax cut that we passed in December, most people here, your taxes will go up by $1,000. So voting no against the jobs bill is voting in favor of middle-class families’ income taxes going up. And that’s a fact. Don’t take my word for it—all the reporters here, they can check on the facts on this thing. That’s the truth.

Are any reporters fact-checking the only payroll taxes the Federal government collects are Social Security (FICA) and Medicare?
 

Previously on Obama’s jobs bill:

  • Obama Grandstands for Stimulus 2.0 Jobs Bill
  • Déjà Vu: Obama’s Jobs Plan is Just Stimulus 2.0
  • In Detroit: Obama’s Jobs Plan? Just Stimulus 2.0
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Mon, 17 Oct 2011

A Tale of Two Dysfunctional Systems

Filed under: Budget, Customer service, Detroit, Economy, Governor, Michigan, Politics, Stimulus, Transit — cynicalsynapse @ 8:17 pm

city and suburban buses in downtown Detroit

Detroit and its suburbs enjoy bus service from not one, but two dysfunctional systems. Detroit Department of Transportation (DDOT) buses primarily serve the city while Suburban Mobility Authority for Regional Transportation (SMART) buses serve the suburbs, including forays into downtown Detroit. It’s not at all uncommon to see buses from one, the other, or both, chasing each other—even leap-frogging as one stops while another goes to the next stop. As many as half of DDOT’s buses are in the shop waiting to be fixed. Even former mayor Kwame Kilpatrick knew way back in 2004 that DDOT was a broken system. As for SMART, individual suburbs can opt out, so the system has traverse these unserved areas to connect those that are served. Declining property values left SMART underfunded by its millage, so the system plans to lay off 123 and cut or eliminate service on 36 routes.

Nine years ago, Southeast Michigan was on the cusp of a solution called the Detroit Area Regional Transportation Authority (DARTA). After years of negotiating and political maneuvering, the Michigan House and Senate had passed the necessary legislation. Then, in a moment of extreme self-importance and political spitefulness, the Jaba-the-Hut-esque John Engler (R) vetoed the bill mere nanoseconds before his rotundness rolled out of office as his term as governor expired. Thanks, John. The region has been paying the price ever since.

Peter Rogoff, Mayor Dave Bing, Sec. Ray LaHood, Gov. Rick Snyder

Ray LaHood, US Secretary of Transportation, was in metro Detroit today to meet with Detroit Mayor Dave Bing (D) and Michigan Gov. Rick Snyder (R) regarding transit in Southeast Michigan. During a press conference with Federal Transit Administrator Peter Rogoff, LaHood announced $928.5 million in grants to over 300 projects nationwide. For once, Michigan faired well, snagging about 5% of the grant money. Ann Arbor will get $3.8 million, DDOT $6.8 million, and SMART almost $5 million of Michigan’s $46.7 million share to fund 16 projects.

The elephant in the room is still getting city and suburbs to put their differences aside and craft a true, workable transit solution for Southeast Michigan. Imagine how much farther along we would be if Engler hadn’t been such a jackass.
 

Well! The more things change, the more they stay the same.

Previously on Southeast Michigan transit:

Fri, 09 Sep 2011

Déjà Vu: Obama’s Jobs Plan is Just Stimulus 2.0

Filed under: Budget, Business, Congress, Economy, Employment, Government, Life, Politics, President, Stimulus — cynicalsynapse @ 5:00 pm

the new homeless

Déjà vu is the feeling of experiencing what’s going on now repeats some previous similar event or activity. President Obama’s jobs speech to Congress, in an 8 September 2011 joint sesssion, feels like that. Some other concepts that come to mind:

  • “Those that fail to learn from history, are doomed to repeat it.”
    Winston Churchill
  • “If you always do what you’ve always done, you’ll always get what you’ve always got.”
    Henry Ford
  • “Hope is not a method.”
    Gordon R. Sullivan
  • “You can’t have your cake and eat it too.”
    John Heywood

The size of Obama’s proposed $447 billion jobs bill is over half that of 2009’s stimulus bill. Like its predecessor, the jobs bill includes tax cuts designed to spur private sector jobs and give working class people more take-home pay so they can spend it and create a need for more workers. It also includes money for education and infrastructure projects, just like the stimulus bill. Counterintuitively, both the stimulus and jobs bills also called for extended unemployment benefits.

Pres. Obama makes his jobs bill speech

Obama urged Congress to pass his jobs bill, pointing out it includes proposals from both parties and will be fully paid for:

There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans—including many who sit here tonight. And everything in this bill will be paid for. Everything.

With no plan for where the bill’s nearly a half trillion dollar cost will come from, Mr. Obama tasked the bipartisan deficit reduction supercommittee to pay for jobs on top of the deficit reduction they’re already charged with. Since unemployment is now 9.1%, compared to less than 8 (7.6%) prior to 2009’s stimulus package, why does anyone think “Stimulus Lite” will work? If they do, they’re part of the Chain of Fools (meaning no disrespect to Miss Aretha).
 

Previously on the stimulus bill:

Mon, 05 Sep 2011

In Detroit: Obama’s Jobs Plan? Just Stimulus 2.0

Filed under: Budget, Detroit, Economy, Government, Politics, President, Stimulus — cynicalsynapse @ 7:31 pm

black hole

Sen. Debbie Stabinaw (D-MI) was there. Rep. John Conyers (D-MI-14) led cheers for jobs. Seriously? Can anyone see Conyers cheering for anything? His speaking style is the most depressing I’ve ever seen or heard. Sen. Carl Levin (D-MI) rode with the President on Air Force One to Detroit. It was like a black hole of hope amidst the ruins of reality.

Obama speaking in Detroit

At a Labor Day speech in Detroit, President Obama praised unions, which isn’t a surprise considering the event he spoke at was an AFL-CIO rally. But, Obama fell back on the meme of the failed Stimulus bill:

We’ve got roads and bridges across this country that need rebuilding. We’ve got private companies with the equipment and the manpower to do the building. We’ve got more than 1 million unemployed construction workers ready to get dirty right now. There is work to be done and there are workers ready to do it. Labor is on board. Business is on board. We just need Congress to get on board.

So, while unemployment remains at 9.1% and there were zero jobs added to the US workforce in August, Obama’s solution is just a repeat of the ineffective Stimulus from 2008. It didn’t work then, so why would it work now?
 

Tue, 19 Jul 2011

House Republicans Use Flood Relief for Political Gain

Filed under: Congress, Deceit, Government, Hypocrits, Passenger rail, Politics, Stimulus — cynicalsynapse @ 6:00 am

high speed rail awards

On Friday, 15 July, the US House voted to redirect high-speed rail funding to flood relief in the Midwest. In the balance is about $1 billion in high-speed rail funding Florida said no thanks to but which is not yet obligated to other projects even though the Department of Transportation has named new recipients. The vote on House Resolution 2354 was largely along party lines with 219 for (mostly Republicans, 196 opposed (mostly Democrats), and 16 not voting. The same is true for Michigan’s delegation, with only Rep. Justin Amash (R-MI-3) breaking party ranks. Rep. Mike Rodgers (R-MI-8) did not vote. Even though Rep. Mark Walbergh’s (R-MI-7) district stands to benefit, he voted to strip the high-speed rail money.

Before the vote, Rep. Louise Slaugher (D-NY) said redirecting the high-speed rail funding was “misguided”.

[Cutting high-speed rail funding] will eliminate thousands of jobs, will halt a large number of rail projects across the country and we are way behind every other nation, industrial nations anyway, and hurt local and station economies. This is the latest in the majority’s agenda that can best be described as penny-wise and pound-foolish. The high speed and intercity passenger rail program is critical to our country’s competitiveness. It puts Americans back to work, it revitalizes our construction and manufacturing sectors, boosts the domestic economy and helps in U.S. dependence on foreign oil.

Amtrak Acela express train

Full disclosure: I am a rail enthusiast and it saddens me the US has a passenger rail system that even third world countries would denounce. In an effort to avoid full-body scanners at the airport, I found out it would take me 40 hours to get to Orland from Detroit by rail. Excuse me? Nonetheless, passing HR 2354 is unadulterated political grandstanding. It is unlikely the Senate will pass the bill, so House Republicans are simply using flood victims as human shields. And, even if the Senate did pass the House bill, Pres. Obama would probably veto it.

Amtrak is not perfect, but it suffers from a dirth of Amtrak haters in Congress. While politicians decry subsidizing Amtrak, how many billions are spent on airports, air traffic control, and highways every year? Conventional wisdom holds we cannot build our way out of road congestion. The US transportation network faces a lack of focus and strategic planning that seriously hampers the country’s global competitiveness. While there is a failure to integrate transportation planning and funding, there is also a lack of strategic foresight. This is exacerbated by the short-term mindsight of our elected officials who rarely see beyond the fiscal year, let alone to the far reaches of an entire term in office.

Previously on passenger rail:

Sun, 28 Nov 2010

Rick Snyder on High Speed Rail: Crickets

Filed under: Government, Hypocrits, Life, Michigan, Passenger rail, Politics, Railroads, Stimulus, Take action, Travel — cynicalsynapse @ 2:23 pm

Midwest High Speed Rail Initiative

Michigan is sucking eggs in the quest for Federal dollars to develop high speed rail. Grants this year total only $200 million out of a request for $993 million. And none of that money is actually being used for high speed rail. From the Stimulus bill, Michigan got $40 million for new stations in Troy and Dearborn plus renovations to the Battle Creek station. The October grant—which requires Michigan to match $30 million&mash;covers purchasing Norfolk Southern’s track from Dearborn to Kalamazoo and upgrading it to 79 mph. It also includes reconstructing connecting track in West Detroit. None of this is the 110 mph or faster promised by high speed rail.

Amtrak owns the line between Kalamazoo and the state line near New Bufalo. In partnership with Michigan Department of Transportation (MDOT) and the Federal Railroad Administration (FRA), Amtrak’s Michigan line has been upgraded to 95 mph speeds along some segments. That’s almost high speed and plans call for raising the segment to 110 mph. Why Michigan didn’t get any Stimulus money for this is beyond me. Where are Sens. Carl “Leave ’em” Levin (D) and Debbie “Stab me now” Stabinow on this? How about US Reps. Fred Upton (R-06) and Mark Schauer (D-07)?

Amtrak 452 F59PHI

A recent poll of over 24,000 by the American Public Transportation Association (APTA) found 62% would ride high speed rail if it was available and competetive in time and price with flying or driving. I’ll bet the number would go up if it meant avoiding full body scanners and/or “enhanced” pat downs. Amtrak wants to cut time from Detroit to Chicago from 5-1/2 to 3-1/2 hours. I’d call that competive with driving. Round trip on Amtrak costs $62-84 depending on times. Airfare starts at $190, so travel by rail is more cost effective than flying. The problem is 5-1/2 hours takes too long while 3-1/2 hours makes skipping the security lines at the airport worth it.

Amtrak on its Michigan Division at Durand

Republicans John Kasich and Scott Walker, Govs.-elect in Ohio and Wisconsin, are hostile to high speed rail. In fact, Mr. Kasich wants to give up a $400 million grant for new passenger service from Cleveland to Columbus to Cincinatti, the 3C line. Despite popularity for a new Milwauke to Madison line, Walker wants to forego $810 million in high speed rail grants. Both expected to be able to repurpose the money for roads. Says US Department of Transportation (DOT) Secretary Ray LaHood: Not!

Like pirhana swarming to fresh blood in the water, a dozen states are asking for the $1.2 billion to be rejected by Ohio and Wisconsin. LaHood said there are “a lot of states that would like to have access to that money.”

What’s the word out of Michigan? Nothing. From Gov.-elect Rick Synder? Crickets. Good start on your 10-point plan, Gov. Nerd. Michigan needs the jobs and the infrastructure. Tell the “tough nerd” to take his hat off and belly up to the table with his empty plate and get Michigan’s fair share.

Previously on high speed rail:

Tue, 26 Oct 2010

Good Money After Bad

Amtrak on it's own rails at Dowagiac

Lest there be any doubt, I am a strong proponent of mass transit by rail and intercity rail passenger service. But…

The announcement of US DOT investing $150 million plus in Michigan’s high speed rail corridor is a misnomer. The grant is for Michigan Department of Transportation (MDOT) to acquire and rehabilitate track between Dearborn and Kalamazoo. When done, the track will allow passenger rail speeds of 79 mph. First, that’s not high speed. Second, the track is already rated at 79 mph for passenger trains. Besides relieving present owner Norfolk Southern of maintaining the track, the only tangible benefit in the grant is improving connecting track in West Detroit. The grant also includes $3.2 million for planning the Detroit-Chicago high-speed corridor. Isn’t it already planned? Work has already been done on the Amtrak-owned Kalamazoo to state line portion. What more planning needs to be done?

railroad diamonds

Just over $7.9 million will be spent on connections between Detroit area trackage and the main line in West Detroit. That part probably makes sense. But here’s a piece no one is talking about: Michigan needs to fund $30 million to get the grants. Any bets on how likely that is, given the current budget situation?

Interesting, too, is how the value of the grants is $150 to $161 million and how Sens. Levin (D) and Stabinaw (D) and Rep. Dingell (D) are all claiming credit. Regardless, they’re claiming credit for spending taxpayer dollars on something that provides little, if any, tangible benefit. In fact, if anything, it saddles taxpayers with maintaining Norfolk Southern’s right-of-way. And, if I had to bet money, I’d bet they had little or nothing to do with it. Otherwise Michigan would have been awarded these grants in the first round when Stimulus was big in the news. The fact they’re claiming responsibility just before the election is unadulterated, disgustingly sick, opportunistic grandstanding.

money up in flames

So far, Pres. Obama’s stimulus-related high speed rail initiative has amounted to jack nothing for Michigan in regard to improved travel times. Remodeling some stations and taking over a rail line is still the same 79 mph route. You won’t get people out of their cars with that. And it’s still shorter to fly, even with all the so-called security crap.

Previously on high speed rail:

Sun, 21 Mar 2010

Obama Going for Jobs Trifecta

Filed under: Bailout, Budget, Congress, Economy, Government, Medicine, Politics, Society, Stimulus, Taxes, Unemployment — cynicalsynapse @ 10:30 pm

stimulus signs

On 18 March, Pres. Obama signed what’s been called the jobs bill into law. Touted at $38 billion, it’s really closer to $100 billion in cost over 10 years, according to the Congressional Budget Office. Besides it’s so-called jobs provisions, it also includes a $60 billion extension of unemployment coverage, an obvious back-to-work program if ever there was one. Titled the American Workers, State, and Business Relief Act of 2010, the bill’s touted tax breaks are really just extensions of already existing breaks and there’s nothing uniquely job-creating in the law.

Earlier, there was the so-called stimulus bill. Officially titled the American Recovery and Reinvestment Act, the stimulus package was supposed to “create or save” 3-4 million jobs. The national unemployment rate was 8.1% in February 2009 when the Stimulus bill was signed into law. For February 2010, the national unemployment rate was 9.7%. I’m not a statistics whiz, but it seems pretty clear to me that more people are unemployed this year than before passing the Stimulus package. More jobs would likely have been created had the Stimulus money been put to better use.

unemployment line

so, the Stimulus bill has seen job loss rather than job creation, no matter what anyone claims. In February 2009, there were 12.5 million unemployed. With all the jobs “created or saved” by the Stimulus package, February 2010 unemployment stood at 14.9 million and 9.7%. I’m thinking that’s not an improvement.

Next up, and coming to a vote in the House, perhaps as I write, is health care reform, based on the Senate bill and a House “reconciliation” measure. Some have argued health care reform is also a jobs creation bill. This has become a “do or die” bill, as if this is the only opportunity the country will have to fix health care. I don’t think anyone disagrees there are issues with health care. The problem is the Senate bill is a Frankenstein’s monster of vote-buying and gerrymandering. Never mind whether Congress has the authority to require citizens to buy health care insurance. And then there’s House Speaker Nancy Pelosi (D-CA) saying health care overhaul will create 4 million jobs. She must be spending a little too much time with that medical marijuana. As we approach the final hours, it sounds like the Wicked Witch of the West has gathered the necessary votes to pass health care reform.

While some, such as Pelosi, claim health care reform will create jobs, others claim health care reform is a jobs killer. In fact, Caterpillar Corp. says health care overhaul would cost them $100 million in the first year. I lived in Illinois during times when Caterpillar was struggling. So, if they’re concerned, I’m concerned. And it makes me wonder why the domestic automakers aren’t speaking out, except 2 of 3 are wholly owned subsidiaries of the government.

health care gone to the apes

Let’s see. Billions spent on job creation under Stimulus I didn’t work. The jobs bill under “mini-Stimulus” is actually nothing new for tax credits but counters job creation with extending unemployment benefits.

So, after all this hope and change, why would you support the Stimulus bill, the jobs bill, or health care overhaul? Seems to me Obama is playing a zero-sum game, at best.

Sat, 20 Feb 2010

Woodward Transit Project on Track

Filed under: Detroit, Economy, Government, Politics, Stimulus, Transit — cynicalsynapse @ 3:04 pm

Detroit Amtrak station

Michigan doesn’t seem to get a lot of good news. Even when it does, it’s usually a mixed blessing. Like unemployment is down, but it’s still the highest in the country at 14.5%. Or last month’s $40 million Federal grant for the Pontiac-Chicago Amtrak line. The money is for station improvements, not upgrading the line itself to high-speed standards. Michigan had asked for $800 million to upgrade track and signaling.

On Wednesday, 17 February, though, the news was all good for metro Detroit. The US Department of Transportation (DOT) announced a $25 million grant for M1 Rail, the light rail line planned for Woodward Avenue in Detroit. The funding comes of part of the Stimulus known as TIGER—Transportation Investment Generating Economic Recovery. In announcing the grant, the USDOT press release said:

The project will have significant short-term benefits for Detroit’s beleaguered economy, including job creation and economic activity. The city also expects the project to provide for significant long-term economic growth in the corridor, while improving mobility on a congested portion of Woodward Avenue, which carries 27,000 vehicles per day, on average. The project is also expected to enhance mobility options in this corridor, and attract investment to Downtown Detroit and the New Center area.

Artist rendering of transit on Woodward Av

In raising the local match for the project, a public-private partnership almost certainly helped snatch the $25 million. Frank Rapoport, an expert with the law firm of McKenna, Long, & Aldridge, LLP said, “Your business community should be congratulated. Detroit is out front here. It’s a great example of public-private partnership.”

Detroit’s big names in business play a big role here. Penske’s Roger Penske, Peter Karmanos Jr of Compuware, Tigers and Red Wings owner Mike Ilitch and founder of Little Ceasar’s, as well as Quicken Loans/Rock Financial founder Dan Gilbert are all involved. Detroit’s Downtown Development Authority and Troy-based Kresge Foundation also kicked in money.

Planned M1 light rail project

Phase 1 of the M1 Rail project runs 3.4 miles from Hart Plaza, at the foot of Woodward, northwest to Grand Boulevard in the New Center Area. The route takes it past Campus Martius, which hosts ice skating in the winter, Comerica Park and Ford Field, home fields of the Tigers and Lions, respectively. Also along the way are the Foxtown theater district, Detroit Medical Center, and the Cultural Center. The Detroit Science Center, Detroit Institute of Arts, Detroit Public Library, Detroit History Museum, and Charles H. Wright Museum of African-American History all call the Cultural Center home. The New Center area is a commercial hub north of downtown and home of Wayne State University and Henry Ford Hospital. Detroit’s Amtrak station is also in the New Center area.

Trains will average speeds of 31 to 47 miles per hour, aided by an in-street system with signal pre-emption to turn traffic lights green on Woodward as the train approaches. Pre-board fare payment will also reduce dwell times. Wait times between trains will be about 10 minutes. Trains will stop at Hart Plaza and New Center each trip, but at the other 10 stations only when summoned.

Cobo Center

Detroit Department of Transportation (DDOT) and the city plan to apply for Federal Transit Administration New Starts grant money later this year to fund Phase 2, envisioned to run to 8 Mile Road. Transit advocates hope to see the line extend into Oakland County in the future. Doing so will greatly expand ridership in my opinion. The present plan, however, stops short by not extending its southern terminus 3 blocks to Cobo Center. With a regional authority set to expand and renovate the home of the North American International Auto Show, not connecting it to transit seems short-sighted. Another mistep is DDOT’s newly opened Rosa Parks Transit Center that sits 4 blocks off Woodward and 5 blocks away from Cobo.

Construction could begin later this year or early next with Phase 1 beginning operations as early as 2012. Khalid Diab, manager of The Whitney, an upscale restaurant on Woodward, said, “This rail system is the start of a new page in the city’s growth and development. We haven’t received a lot of positive news over the years here in Detroit, but this is great news for the city.”

Previously on metro Detroit transit:

Thu, 11 Feb 2010

Granholm’s Budget Proposal Doesn’t Add Up

Filed under: Budget, Economy, Government, Michigan, Politics, Stimulus, Taxes — cynicalsynapse @ 9:47 pm

Granholm presents her 2011 budget proposal

Gov. Jennifer Granholm (D) delivered her Michigan budget proposal to a joint state House and Senate Appropriations Committees session. There’s been great anticipation surrounding her last budget plan in light of the anticipated $1.7 billion shortfall in the fiscal year 2011 state budget. Highlights of the budget proposal include:

  • Cutting the sales tax to 5.5% and extending it to most services, excluding health care, new construction, and business-to-business services
  • Cutting the Michigan Business Tax surcharge in half in 2011 and eliminating it in 2012
  • Restoring Promise college scholarship grants as a refundable tax credit for students who earn a degree and work a year in Michigan
  • 3% tax on doctors’ gross receipts to pay for added Medicaid costs
  • $2.50 fee on rental cars at Michigan airports to pay for Pure Michigan ads

There are more details of the Governor’s proposal, but there are still a number of unanswered questions. And the proposal includes a whole bunch of legislation that needs to be passed and signed into law in order for it all to work. In my world, we’d call that assuming away the problem.

Doesn't add up

At first glance, Granholm’s proposal seems to make sense. The flaws start to become apparent when you start peeling back the onion, however.

While presenting her budget, Gov. Granholm said, “By the end of 2013 fiscal year, these changes to the sales and use tax and Michigan business tax will all be revenue neutral.” That leads me to conclude the deficit for 2011, which Granholm’s budget supposedly avoids, will be back with a vengance in 2013. How do we make up that $1.7 billion shortfall then? And Granholm’s 2011 plan includes $400 million in Stimulus cash that simply defers making choices on that shortfall to the 2012 budget.

Granholm’s tax on services is going to drive people in border communities to surrounding states for those services. That will hurt Michigan business people as they suffer lost revenue; many will probably close up shop. In case she doubts that, Granholm need only look at the cigarette tax issue.

I’m not close enough to the border, so I won’t be going elsewhere for services or goods. But I’m curious to know how the 5.5% tax is going to work. If I buy a $1 double cheeseburger, will it cost me $1.05 or $1.06? If the latter, I’m actually being taxed at a higher rate than specified by law. Do I have recourse? Is this something I’m going to have to keep track of to claim on my Michigan income tax return? Or is it just a ploy for the state to actually bring in additional revenue under the guise of “we don’t have no half-cent coin”?

pick pocket

More importantly, though, Granholm is shifting the tax burden from businesses to individuals in a thinly veiled attempt to gain Republican support. Although the Michigan Business Tax surcharge is definitely an issue, shifting it’s revenue burden to individuals is a regressive tax that will adversely affect those who can least afford it. Has Granholm forgotten Michigan’s unemployment rate is 14.6%, the highest in the country? Why, then, burden them with additional taxes?

Doctors are another targeted group in the governor’s budget proposal. Granholm proposes a 3% tax on physicians’ gross receipts to fund Medicaid shortfalls. I’m just really confused by this concept. Medicaid doesn’t reimburse you enough, so pay this extra tax so Medicaid won’t reimburse you enough. Why should doctors pay a tax to cover Medicaid recipients?

Education is Granholm’s sacred cow in her budget proposal. She’s kept K-12, state universities, and community colleges funded at current levels. She proposes to use the added revenues to restore the $4,000 Promise grants, although they have the added stipulation of a degree and 1 year working in Michigan. They also become a refundable tax credit instead of a grant. Today, Granholm said, “I will veto any budget that makes further cuts to education.” Have we heard that before? The pro-education Governor accepted the Legislature’s $165 per pupil cut and added her own.

Michigan Senate Majority Leader Mike Bishop (R-Rochester) isn’t one of my favorites, but he hit the nail on the head. “This is the wrong time in our history to increase taxes.” In presenting her budget, Granholm said, “The budget brings revenue and spending in line with Michigan’s harsh economic realities.” I’ve got some other ideas about this that I’ll present in the coming days.

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