Dire Forecast for State’s 2011 Budget

by Douglas M. Paterson, MPA, Director of State Policy

At a forum organized last week by the Michigan League for Human Services titled“Putting Michigan’s Fiscal House in Order”, House Fiscal Agency Director Mitch Bean presented a dire forecast for the 2011 budget cycle.  His presentation can be viewed by visiting MILHS’ website at www.milhs.org.  The 2011 budget that is beginning to be drafted by the administration and will be released early next year is going to make this year’s budget debate look tame.  Projections currently predict an additional $1 billion shortfall beyond all the cuts already implemented this year.  Each department has been instructed to make general fund cut recommendations at 20%.  For the Michigan Department of Community Health (MDCH) this means that, once again, any line item with any general fund (GF) will be in jeopardy.  Many GF funds are matching federal funds which would also be forgone, making the overall cuts even greater.

Given this information, it is absolutely imperative that our policy makers begin to address the need for new revenue sources.  A recent EPIC-MRA poll reflects that almost 60% of a valid sample of likely voters now believe the state must address revenue AND cuts as the solution to the 2011 budget.

Two weeks ago, one gubernatorial candidate stepped forward with a three-pronged recommendation for addressing the need for tax reform.  State Representative Alma Wheeler Smith recommended that the state must:  1) Implement taxes on specific services, 2) Move toward a graduated income tax, and 3) Significantly reduce the number of “tax credits and exemptions” currently in place.  This platform is very similar to the recommendations supported by the Michigan Primary Care Association as a member of A Better Future for Michigan coalition.

As we once again move into an election year, every candidate for office needs to be asked what plans they have to address the upcoming deficit and what proposals for addressing needed tax reform they will support.   The future of our state was never at such a crucial crossroads.

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