Counties Held “Hostage” to Wasteful State Spending

MIDLAND — Today the Michigan Association of Counties held a Capitol lawn press conference in which they urged the Legislature to adopt the governor’s proposal to accelerate county tax collections. County officials claimed that if the Legislature does not pass this tax increase, it will result in large cuts to local governments.

Jack McHugh, a Mackinac Center legislative analyst who has shown the proposal to be the equivalent of a one-time 42 percent tax hike over its 31-month phase-in period, responds:

"It is unfortunate that the counties have been made hostages to a governor and a Legislature unwilling to make necessary cuts to excessive state spending. The Mackinac Center has identified $183 million in cuts that would make the proposed tax increase unnecessary, www.mackinac.org/6839. Instead, the Legislature has presented a false choice of either raising taxes or making large cuts in local revenue-sharing."

"The county officials in Lansing today are mistaken when they say that the only impact on taxpayers involves the ‘time value of money.’ There is also a wealth effect that will reduce each taxpayer’s net worth by five months’ worth of county taxes."

References:

"Balancing the Budget without Taxes," www.mackinac.org/6839.
"County Tax Shift: It Quacks, It Waddles; It’s a Duck," www.mackinac.org/6818.

The Mackinac Center for Public Policy is a research and educational institute headquartered in Midland, Mich.