Is it still raining in Michigan?
As I have been telling folks for the past year, Republicans have raised the effective tax rates on more than half of all Michiganders in the past year. You’ll notice when you do your state taxes this year; many folks are already facing the reality that, instead of getting a refund like they always have in the past, they now OWE several hundred dollars to the State of Michigan. Get your checkbooks out, folks. SOMEBODY has to pay for nearly $2 billion in tax cuts for corporations and that somebody is YOU.
Meanwhile, as the tax coffers start to overflow a bit, Republicans are eager to sock some of it away into the Budget Stabilization Fund, otherwise known as the “Rainy Day Fund”. During the financial meltdown during the latter half of the Bush administration, Governor Granholm was forced to use that money to keep the state afloat. The fund now has a half billion dollars in it. The question many are asking is if we should put MORE money in it?
Most people agree that it makes sense for a state — or a household — to have savings set aside in case an emergency arises.
But as Gov. Rick Snyder prepares to deliver his third budget address on Thursday, the size of Michigan’s Rainy Day Fund has become a subject of controversy.
The fund, more formally known as the Budget Stabilization Fund, contains slightly more than $500 million. And when he presents his 2014 budget to lawmakers, Snyder is expected to recommend that the state sock away $50 million to $100 million more.
As you read the Detroit Free Press article, you can see some pretty compelling reasons to both spend the money NOW and to put it away. Some Republicans want it to be at $1.2 billion, saying it will help our state’s credit rating. Some folks point to Gov. Snyder asking for an additional $1 billion in tax revenues to fix our roads and bridges and suggest excess funds should be put there. Or to help replace funds diverted from the School Aid Fund. Or to replace a number of tax credits that help poor and working poor families.
Mackinac Center’s Michael LaFaive insulting comment that the “Rainy Day Fund looks like a drawer full of candy to children” notwithstanding, what do YOU think? Take our poll and let us know: