LANSING – As Michigan heads toward yet another budget deadline without adopting lasting reforms to end the cycle of deficits, State Representative Mark Meadows (D-East Lansing) has introduced a massive overhaul of Michigan's tax code. The plan, which includes a constitutional amendment to revamp the state's sales tax, would repeal the Michigan Business Tax (MBT) surcharge and expand funding for education and police and fire protection.
"Michigan's finances are on life support and we seem to be only using band-aids to try to fix the problem," Meadows said. "If we're going to get our state back on the road to recovery, we need to protect the vital services our residents rely on every day and become more business friendly. Making common-sense tax reforms and changing the way business is done here in Lansing can end the constant cuts to essential services and jumpstart our economy."
Meadows' plan will:
- Lower the sales and use tax rates to 5 percent;
- Repeal the MBT surcharge;
- Extend the sales and use taxes to services except for business to business; education; non-profit and physician services;
- Dedicate 75 percent of the resulting revenue to the School Aid Fund and 20 percent to revenue sharing including police and fire protection;
The plan, introduced after the Governor signed a $165 per-pupil cut to K-12 education and warned of even larger budget shortfalls, would increase net funding for K-12 education by $673 million on a full year basis and net funding for revenue sharing by $406 million on a full year basis. Meadows said the cuts to education and the veto of $52 million in funding for so-called 20j schools, which results in a $479 per-pupil reduction in funding for East Lansing Schools, shows the need for real tax reform in Michigan.
"The budget cuts we have seen this year are hurting Michigan families," Meadows said. "In these tough economic times, we need to focus on ways to create and protect jobs, build strong communities and provide a world-class education so our kids can compete for jobs in the 21st century global economy. Our economic recovery depends on it."