MIDLAND, Mich. — The Mackinac Center for Public Policy recommends limiting the state of Michigan’s budget to increases no greater than population growth plus inflation. The Sustainable Michigan Budget would curb excess spending, force the government to prioritize spending decisions, improve the state’s economic prospects, and protect taxpayers. This comes at a time when Gov. Gretchen Whitmer is expected to propose the largest budget in Michigan’s history.
Setting limits on the state’s spending through the Sustainable Michigan Budget will help Gov. Whitmer and the legislature avoid the temptation to distribute more money just because there is revenue available. Lansing could instead improve Michigan’s competitiveness by paying down long-term debt or lowering tax rates.
“More taxpayer dollars are available to lawmakers than ever before,” said James Hohman, director of fiscal policy at the Mackinac Center. “Rather than increasing spending simply because funds are available, Lansing should prioritize letting Michiganders keep more of what they earn. This plan will help lawmakers stay within reasonable boundaries and make it easier for them to lower taxes for everyone.”
The Sustainable Michigan Budget does not apply to the federal funds given to the state due to the reduced ability of the Michigan Legislature to control these receipts. Based on current inflation and population changes, the next state budget would be able to increase by 3.15%. This would limit fiscal year 2022-2023 spending to $39.1 billion, a $1.2 billion increase from last year.
Taxpayer protections such as these are not uncommon. Texas lawmakers have restrained spending below population and inflation over the past eight years, using the savings to reduce property taxes by $11.1 billion. The Lone Star State continues to see revenue and population growth.
“The Sustainable Michigan Budget will help remake Michigan’s future,” said David Guenthner, senior strategist for state affairs at the Mackinac Center. “It shows that Michigan is willing to prioritize investment in and expand economic opportunity for all of our hard-working residents, small businesses, and communities.”
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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