State government finally gets it right

Guest Editorial
Finally, Lansing gets it.

Finally, state government has taken a straightforward path to balancing its budget. Establish priorities, figure out how much money is available and make the decisions that balance the books. No gimmicks. Some fuss, sure. But no late nights and silly deals that don’t hold up in the light of day.

Decades have passed since lawmakers finished work on the state’s spending blueprint this early. Still, Gov. Rick Snyder and Republicans who control the House and Senate shouldn’t be defined by how fast they finished this work. They did it exceedingly well.

In the blink of an eye, the governor and lawmakers turned an outdated tax system on its head. They gave employers the most direct, the most clear-to-understand business tax code they could muster.

They did not use new taxes, funding gimmicks or outside money from the federal government. They delivered painful cuts across the board, to public schools, to colleges and to local governments — but not without judgment.

The budget preserves Medicaid and gives schools onetime payments to help with runaway retirement costs. It forces those schools and municipalities to confront issues they’d rather ignore, like consolidation or heinously expensive health care, if they want state money.

Even in offering simplicity, Snyder and lawmakers have left themselves wide open to political distortions. The shorthand version, which we’ll hear straight through the November 2012 elections, is that they gave lavishly to Big Business while robbing pensioners and school children. Here’s where that argument fails:

• Big Business benefits? Tell that to companies like Jackson-based CMS Energy, which will see tax loopholes vanish and pay higher state taxes. The real beneficiaries are Mom-and-Pop businesses that will no longer pay the cumbersome and complicated Michigan Business Tax. Who benefits? Typically, it will be middle-class company owners.

• What about the seniors? If you are 67 or older, your income tax rate will not change. If you are 59 or younger, you’ll pay more when you retire — about the same or less than in most states.

Sure, it’s unpleasant to tax retirees, but should they get better treatment than a working family? With baby boomers entering their golden years, it’s a tax break that tilts the playing field against younger generations. Michigan can’t afford it.

• What about the children? Public schools are facing the ax as state aid falls, though not nearly as much as once proposed. A school district that takes a sound financial approach could feel a $100-per-student cut, out of more than $7,100 today.

If you believe that only a pipeline stuffed with dollars can keep our schools afloat, you won’t like this budget. If you believe innovation and creativity are better barometers of school success, you’ll see that schools will manage.

We will be curious to watch as Democrats and public unions try to hang this budget like a noose around Snyder. We think the governor and lawmakers who voted yes have no reason to run from their actions. They did a lot of good for Michigan and its future.