Analysis by State Rep. Jeff Irwin, Michigan’s 53 House District.
When Rick Snyder put himself out to be Governor of Michigan during the 2010 election, many voters were wondering what Snyder stood for. As well they should have – Snyder ran a stealth campaign that revealed little about what values he would bring to the Governor’s office. He deflected serious questions about policy and refused to debate his opponent. Instead, Snyder repeated his vague catchphrase: reinvention. As we approach the end of Gov. Snyder’s term, we can look back on the last three years to get an idea of what Rick Snyder is all about. What did he mean by reinventing Michigan?
Gov. Snyder’s reign has been laser-focused on one goal. This one goal, lowering the tax burden for the wealthy, is his unmistakable signature. In service of this goal, Governor Snyder raised taxes on seniors and low-income workers and made steep cuts to K-12 and higher education. The magnitude of this realignment of responsibility is startling. Because of changes in 2011, taxes for most corporations have been eliminated. LLC’s and S-corps now pay a 0 percent tax, reducing state revenues by $1.7 billion in 2012[i]. This represented an 86 percent reduction in taxes on businesses.
How did the Governor pay for this bonanza for big business? He funded this historic tax shift by: raising taxes on people, cutting schools, and reducing support for local police and fire departments. In all, Governor Snyder has systematically raised taxes for wage earners. By rolling back the Earned Income Tax Credit, halting the planned rollback of the state income tax and adding new taxes on pension income, the Snyder administration has increased taxes on people by 31.5 percent. Still, this wasn’t enough to fuel the enormity of the tax relief that Snyder orchestrated for corporations. Major cuts were required by our schools and universities. Specifically, higher education took a 15% cut in Snyder’s first budget. This cut is driving college costs up, pushing higher education out of reach for many Michiganders. K-12 took a big cut, too, losing billions of revenue during Snyder’s term and pushing Michigan into the bottom half of states in terms of per pupil funding. Finally, our local governments took a $100 million hit to the revenue the state allocates to assist with public safety costs (FY2011-12). Whether those cuts were made up by local tax increase, or whether those cuts resulted in less police on the streets is a local decision. Regardless of how your community handled these reductions, Lansing is doing less to support local police and fire.
So, Governor Snyder is primarily focused on promoting the same trickle-down economics that drove our nation off of the road and into the Great Recession. But Rick Snyder campaigned as a social moderate – what about social issues? Unfortunately, he has governed as a religious conservative. Snyder passed laws making it illegal for a public entity to provide health benefits to their employees in same sex relationship. Snyder also signed a law meant to shut down providers of abortions by blanketing them with new regulations. And, just in time for the 2014 election, Snyder broke his campaign promise to require public disclosure of who funds election ads. Why did Snyder sign all of this bad legislation? Apparently, he believed that playing along with the religiously motivated conservatives in the legislature was required to accomplish his agenda, a radical restructuring of Michigan’s tax policy.
Gov. Snyder is a true believer in trickle-down economics. He believes that tax policy favoring the rich makes Michigan attractive for the wealthy, thereby trickling benefits down to the wage earners. Economists and historians know that economic prosperity is built from the ground up, and that economic strategies focused on helping the wealthy have failed time and again. It’s time for the voters to let Gov. Snyder know that these policies squeeze hard-working middle class families, and that Michigan still believes in a strong middle class.
[i] The changes in 2011 were complicated, including a repeal of the MI Business Tax and the change to a 6% corporate income tax for c-corps. Here are the details from the House Fiscal Agency: http://house.michigan.gov/hfa/