Revenue estimates raise questions

Guest Editorial
What’s a few hundred million dollars mean among friends?

Well, plenty, especially if you’re trying to make or keep friends in an election year.

Recordkeepers put forth their revenueicon1.png ¬ estimates for state government this past week, and it turns out Michigan is expecting to receive substantially less than expected this year. The Senate Fiscal Agency pegs the decline at $288 million, and the House Fiscal Agency says it could be as much as $422 million. Taking into account the Treasury Department’s estimated drop, the state projects an official $317 million revenue shortfall from what it expected in January.

State government officials put these figures together three times a year for revenue-estimating conferences, to assist in the making of budgets. Clearly, this time around, they’re not paving a yellow-brick road to re-election for elected officials.

In the big picture, the state is not bleeding a gusher in terms of lost tax money in its multibillion-dollar budget, but this estimated $317 million shortfall is one massive boo-boo that will take an exceptionally large bandage to cover.

The new revenue numbers ought to provoke some questions from Michigan taxpayers about how their money will be spent going forward. Consider the following.

• Road funding. Gov. Rick Snyder and others have advocated for $1.2 billion or more a year toward the upkeep of roads and bridges. Parts of the Legislature have decided to spend up to an extra $450 million to the cause, which is certainly no pocket change but falls far short of the target. How will the revenue shortfall affect this effort?

• Right-to-work laws. These measures were rushed through the Legislature faster than a Reggie Bush drive through the defensive line of a Detroit Lions opponent. Proponents of the plan said it would help attract businesses. Members of the Snyder team have been slow to provide job numbers, saying the right-to-work laws may take time to show their full effect. Fair enough; not much happens overnight. Still, if that’s the case, we certainly aren’t seeing the results of it now.

• Taxing senior pensions while reducing certain business taxes. Republicans in the state Legislature decided to go this route back in Snyder’s first year in office, in 2011. Was a $317 million revenue decline from the 2014 estimate their projected outcome? Hardly. On the other hand, that’s what we see in 2014: Grabbing pension money while claiming businesses need tax relief and ending up in a revenue decline. Somebody needs to explain how that approach and a $317 million shortage both make sense. Doesn’t seem like they add up.

• Tax relief for homeowners. Segments of the Legislature have advocated for higher limits on homeowner tax breaks. That’s not a bad idea. After all, homeowners, who are already taxed on the local level, sure aren’t in the ownership game to pay more bucks to their state. Nevertheless, they’re bound to feel a sting in some way.

Right now, the powers that be in Michigan government ought to huddle their wagons and figure out their stances.