55 Specific Spending Reductions Would Allow Repeal of the $1.358 Billion in New State Taxes

These budget reductions are “immediately available,” says Center's senior legislative analyst

For Immediate Release
Thursday, Oct. 18, 2007

Contact: Jack McHugh
Senior Legislative Analyst

MIDLAND — The Mackinac Center for Public Policy today released a list of 55 specific recommendations that would reduce state spending by $1.358 billion — the amount state budget officials forecast will be raised by the new service-related 6 percent sales tax and the 11.5 percent income tax hike. The recommendations, drawn up by Mackinac Center Senior Legislative Analyst Jack McHugh, include every major area of state government and fallinto the following nine categories:

  • Department of Corrections: $136.0 Million in Savings

  • "Economic Development" Subsidies: $90.0 Million in Savings

  • Department of Human Services: $135.7 Million in Savings

  • Department of Community Health: $82.2 Million in Savings

  • Higher Education, Including Community Colleges: $82.7 Million in Savings

  • Primary and Secondary Schools: $286.3 Million in Savings

  • Department of History, Arts and Libraries: $29.9 Million in Savings

  • Other Departments and Programs: $211.3 Million in Savings

  • Achievable Government-Wide Savings: $303.9 Million in Savings

Total: $1.358 billion

McHugh says that the current tax increases are unlikely to resolve the state’s budget problems: "By further burdening the private economy they are likely to establish a vicious cycle of ever-lower revenues and successive budget crises," he notes. The recommendations show how "the state could reduce spending immediately to help balance the state budget" if the new taxes were repealed, and as McHugh points out, past Center publications have detailed additional spending reductions, asset sales and even a downsizing of the state work force. "Ultimately," writes McHugh, "current spending levels are the product of past failures to embrace genuinely transformational government restructuring."

McHugh’s Policy Brief, "Replacing Michigan’s New Taxes with Budget Reductions: Curing $1.358 Billion in Overspending With 55 Specific Recommendations," is available online at www.mackinac.org/9059.