en-us Copyright 2008 - All Rights Reserved. Thu, 20 Jun 2013 00:47:13 GMT 15 By Austin Fuller
February 11, 2010 was the day that Governor Jennifer Granholm presented her 2011 budget proposal to legislators at the State Capitol in Lansing. The governor’s budget plan would eradicate a 1.5-billion dollar deficit in several different ways, she would increase sales tax revenue while reducing business taxes, cut spending in the general fund by 566 million dollars, in part by closing four or five prisons, expect a 500-million dollar boost in Medicaid funds from the federal government, and enact a 3% tax on doctors’ gross receipts. Governor Granholm proposed new taxes on services to avoid more cuts to public schools, and a tax on doctors to improve Medicaid health care to low-income Michigan residents. Granholm called for reducing the sales tax from 6% to 5.5%, but would be extended to include almost all of the 168 services Michigan does not tax, such as accounting and legal services, landscaping, auto and home repairs, dry cleaning and tickets to concerts, movies and sporting events. The tax would not be extended to health care and social assistance, most educational offerings, new construction, remodeling, real estate insurance commissions and some business-to-business services. Interestingly enough House Speaker Andy Dillon dismissed Granholm’s call for a broader sales tax. "It’s time, first and foremost, to do the hard work of reforming and streamlining state government. Tax increases should be a last resort, not a first option," Andy Dillon said in an article by Chris Christoff, Lansing Bureau Chief of the Free Press. The expanded sales tax would however generate an additional 554 million dollars for schools. If the tax does not pass however, there may be a 255 dollar -per-pupil cut in 2010-2011. Granholm’s budget also calls for spending reforms. She would reduce the length of time some prison inmates spend in jail, and reduce state and school employee benefits. The proposal frees 6500 prisoners and also closes four or five prisons and cuts over 1400 jobs by October 1, 2010. There would be a 3% tax enacted on doctors’ gross receipts which would increase Medicaid funding by another 500 million dollars. Doctors who have at least 4% Medicaid patients would be reimbursed higher. Budget director Bob Emerson said if the tax doesn’t pass, the state will cut Medicaid reimbursements to doctors by 11%. At the conclusion of the proposal it was heavily criticized. "Probably in the future something [tax on services] this state will have to do. With the state’s economy reeling, it amounts to a tax increase that would fall most heavily on those who can least afford it," Senate Majority Leader Mike Bishop said in an article by Chris Christoff Lansing Bureau Chief of the Free Press. There is speculation whether the proposal will pass, in the event that it does, many question whether or not it will help. ]]> Mon, 22 Feb 2010 17:56:23 GMT