Dear Governor Snyder:
While I agree that the fiscal and tax structure in Michigan needs to change to foster business growth in the state, I do not believe that some of your proposed changes to next year’s budget are in the best interest of either business or residents. In particular, I believe that your cuts to education (K-12 and higher education) and to targeted tax credit programs are counterproductive and bring great harm to the state.
I ask you to reconsider these cuts:
K-12 education should be funded at a rate higher than has been the case over the last several years. Your proposed cuts will gut education funding, leading to grossly overcrowded classrooms and lower performance. I believe that K-12 education is the single most important area of concern in the state, and any cuts that reduce the quality of educational opportunity for all students must be avoided.
Similarly, I support continued and expanded funding for higher education. Study after study have shown that increasing the average level of education brings the best return on investment. In particular, in region after region around the U.S. and the world as a whole, the percentage of the population with a college degree has a strong correlation with economic health. We should do everything possible to increase this number and to maintain it.
Brownfield tax credits have become an important tool in the economic redevelopment of our cities and many other areas, as well. As we shift from a heavy manufacturing economy to a knowledge-based economy, we have to deal with the “fallout” left behind by the industries that once fueled our growth. It is too easy to close our eyes to the contamination left behind as these business facilities close. Until another way is found to deal with the abandoned and neglected sites in every corner of our state, these credits offer the one workable solution.
Historic Preservation tax credits have also served as a tool to help reinvigorate older developed areas in Michigan. As the finance and housing industries go through massive upheaval and change, we need to maintain programs that will allow older housing and commercial properties to remain in use. It is doubtful that the ready financing that we’ve enjoyed for the last few decades will be there to support new developments in the way it has in the past. It is vital that we keep our heritage buildings and housing during this transition period, as we move away from mortgage and finance programs that have been the base of our building projects in the past.
Similarly, I am in favor of extending the film and video credits for three more years, then beginning a phase-down in the program. In the short time the production credits have been in place, Michigan has seen an extremely rapid growth in this world-wide industry. Not only have over 3,000 full-time-equivalent jobs emerged (the equivalent to the number of jobs found in one to two auto plants), but business people from inside and outside Michigan have invested millions of dollars in new facilities based on the promise of continued support. Right now, most of the projects that have been produced in Michigan have come from outside companies. But, as this new industry takes root and grows, our own production companies will lead the way. We have to give this investment time to develop.
I believe that public transportation will play a larger role in the state as the cost and demand for fuel increases. I appreciate your support for light rail and other transit programs in Detroit, Grand Rapids, and other cities, and I support your efforts to gain further funds for high-speed rail routes in the state. Further, I encourage continued support for new energy industries, a field that will play increasing importance over the next decade.
Michigan’s business tax system needs to be simplified and reorganized. We should encourage entrepreneurial growth and incubate the start-ups that will fuel our economic growth. However, a blanket transfer of tax burden away from businesses at the expense of individuals is unfair and not good policy. Michigan’s current tax system causes many difficulties for business, to be sure, but our overall tax burden is not excessive—it is not even ranked in the top half of the most burdensome in the country. I believe that claims that the tax burden in Michigan is excessive are incorrect, or at worst, blatantly false.
I do believe that there are many reasons other than financial concerns that should drive decisions on these and many other issues, including quality of life and cultural concerns. However, I realize that the urgent pressures arising from the current deep recession and the massive effects they have had on Michigan make it important to deal with short-term budget issues very quickly. There are certainly many long-term questions that need to be addressed after these current emergencies are solved. I hope you choose to maintain the programs that I feel are so very important to Michigan.
Sincerely,
David A. Legg
