Granholm’s Resistance to Tax Hikes Is Sound Policy

Mackinac Center Study to Identify over $1 Billion in Spending Cuts

MIDLAND – The Mackinac Center for Public Policy today praised Gov. Jennifer Granholm for protecting Michigan’s future income tax cut by focusing on spending to balance the state budget. At the same time, the Center announced it is preparing a comprehensive budget document showing lawmakers exactly where they can save money to avoid tax hikes.

"The governor deserves praise for putting individual and family savings ahead of the state budget," said Michael D. LaFaive, director of fiscal policy for the Mackinac Center. "Across the state people and businesses are tightening their belts to weather the current economic storm; there is no reason the state shouldn’t do the same."

The Mackinac Center’s budget study will offer more than 125 ideas which, if implemented, would trim more than $1 billion from the General Fund/General Purpose portion of Michigan’s budget. The study also will recommend the sale of state assets and competitive contracting for certain state services.

"Raising taxes to solve Michigan’s budget woes is an unwise option," said LaFaive. "If Michigan is to remain an attractive place to live, work and raise a family it cannot raise taxes," he said. Already, according to the Washington, D.C.-based Tax Foundation, Michigan ranks 9th among the 50 states in per-capita tax burden. "State legislators risk hurting Michigan’s economy and increasing unemployment if they choose to hike taxes even further," LaFaive said.

"There is plenty of room to reduce the size and scope of state government, and we stand ready to help the new governor and Legislature do just that," said LaFaive.

Next week the Midland-based nonpartisan think tank will release detailed recommendations for nearly $35 million in cuts for the Michigan Department of Agriculture budget, and more than $59 million worth of asset sales for the same agency. The recommendations are part of the Mackinac Center’s upcoming comprehensive budget report.

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Contact: Michael D. LaFaive, Director of Fiscal Policy, (989) 631-0900