The Michigan Squeeze
Ed Morrissey rips the words right out of my brain concerning Michigan’s new budget/what in the…/disaster:
The economic woes of Michigan appear ready to worsen, thanks to a budget agreement reached this morning as the state government began shutting down. Michigan residents will see their taxes increase by over a billion dollars, further burdening the decreasing purchasing power of its residents, as the legislature only sliced less than a third of that from their spending plans…
I’ve been a Michigan resident my entire life. Among the Michiganians, there is an aura of despair (especially here in southeast Michigan) that can be sliced and served with a steaming cup of asphalt. The guts of the Michigan economy (the Big 3 automakers) are basically gone. All the businesses that supported the Big 3, from suppliers to the 24-hour restaurants serving three shifts of proud, hard-working automakers are gone or suffering. And the Michigan Legislature (led by the Democrats) decides to squeeze the citizens even more. Shameful and sickening. More from Ed Morrissey:
Note, too, that the Michigan government solved the problem by a 3:1 ratio of sacrifice. They increased taxes by over $1.4 billion, thanks to increases in both income and sales taxes that go into effect immediately. They only managed to shave $440 million off of their own budget. Given that the state budget planned for $42.6 billion in spending for FY2007, this represents a whopping 1% decrease in state spending. It hardly seems as though Michigan lawmakers even cracked the books of their budget to look for other opportunities for savings.
Once again, Michigan lawmakers see the citizens as the way to overcome their excesses. In my previous post here titled “Is a state bail-out feasible?” a TMV reader (DLS) made some comments that hit home:
There should be no federal bailout of Michigan nor any of the other states that would be led to follow Michigan promptly if Michigan were to receive a bailout. There also is no need for any new, grand redistribution scheme (â€equalization payments†in Canada). The solution has already been alluded to, namely that Michigan needs to transform itself, shed the repellent Blue (Cyanide) Nation legacy that is killing it. Long-term movement of the US population is to the south and west, and Michigan with its winters faces a climatic disadvantage; it must be more friendly to business and to households — including in the tax and regulation realms — to encourage people to remain in Michigan, or (surprising as it may seem to nearly everybody in this country, and outside it) even to relocate to Michigan and subject the state to economic and population growth. The state has natural amenities that can be enjoyed year-round by residents who can tolerate winter weather, more than many other Snow and Rust Belt states; what matters is the economic and political problems and the need to correct them.
While I disagree with not having any federal funds made available for that blast crater in the place of Michigan’s economy and the “Blue (Cyanide) Nation legacy” comment (I have equal disdain for Michigan Democrats and Republicans), the other points are rock-solid on-point. Trying to start and maintain a small business in Michigan is difficult at best. If the taxes don’t kill you, the regulations will. And our largest city, Detroit, is just a bastion of cronyism, terrible management, and bad attitude. Michigan lawmakers’ decision to squeeze we Michiganians will just cause many of us, including myself, to leave in revolt and out of necessity.
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9 Responses to “The Michigan Squeeze”
Michiganians? When I lived there I was taught “Michiganders.”
I left Traverse City in 2003 after getting a medical retirement for myself, and my wife losing her job with an auto parts maker due to factory relocating to Mexico. I was lucky in that I sold my house for more than twice what I paid for it in 1994, I sold it in 6 weeks for 30% over my asking price. In talking with friends who still live in Michigan, one thing stands out. The number of houses for sale, and how many are reducing their prices. I remember the downturn of many years ago when the saying was, Will the last person to leave, please turn out the lights. I think that this time it might be true. I moved to Texas, where I built a new house of twice the size and one half the price that I paid in Michigan. No state income tax, but pretty high sales tax. Property tax is high in some places, but my tax is comparable to what I paid in Michigan., Plus there is no winter here.
[...] that even remotely qualifies as legit comments in my book was “T-Steel” over at Moderate Voice. He like, is from the area. He knows the deal. The rest of you idiots, need to stick to what you [...]
Can you feel the LOVE for the big Motor City???
Doggone guys, go easy us Michigan people…
In a story this morning on NPR they were talking about this financial crisis in Michigan and one thing that was pointed out was the the tax system of Michigan is still structured as though it were a strong manufacturing economy with many services that would be taxed in another state being tax free. How much that is contributing to the problems I don’t know.
Many cities use the offer of tax breaks in order to lure businesses to move there from other localities, so I hope Michingan will explore that avene for renewal rather than put the burden on indiviuals.
There is somehting surreal about the ‘greatest nation on earth’ not being able to solve any of its problems. In cases like this, I think the federal government should move in to help instead of wasting money on useless prrk barrel spending. An economic disaster area needs as much help as one debastated by a sorm.
[...] Peter Siegel, MBA wrote an interesting post today onHere’s a quick excerptTrying to start and maintain a small business in Michigan is difficult at best. If the taxes don’t kill you, the regulations will. And our largest city, Detroit, is just a bastion of cronyism, terrible management, and bad attitude. … [...]
Michigan is also an instance where decaying (and often badly run) central cities cannot necessarily look to metropolitan area unification (wherein the central city annexes the suburbs, and their tax bases) to solve the city’s financial problems.
If it’s any (cheap) consolation, Michigan is in bad shape right now but the same self-destructive, reflexive answer by bloated, arrogant, obsolescent governments that has been described this way,
exists in other older states, such as in New York, where I last lived before moving to the Midwest. New York is full of government at all levels who choose to ratchet taxes ever higher, and who treat their jurisdictions as little fiefdoms; Albany, that famous example of big, bloated, beneficient-to-buy-votes government that even has a home that is a Communist-era colossal monument to government, is the government identified routinely in the state of New York by the word “dysfunctional.” (Empire State Plaza is much more an affront politically than the we’re-still-waiting-for-it Renaissance Center.)