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Snyder's business-friendly budget hits almost everyone else

By Rick Pluta, Michigan Public Radio Network

http://stream.publicbroadcasting.net/production/mp3/wkar/local-wkar-953163.mp3

LANSING, MI – Governor Rick Snyder rolled out his long-awaited budget plan Thursday. The governor kept his promise to propose a business-friendly budget and tax reforms. But it also calls for deep cuts to schools, local governments, and higher education. As we hear from Michigan Public Radio's Rick Pluta, there's something in the budget for almost everyone not to like.

AUDIO:

The protests started even before Governor Snyder formally presented his budget.

"Don't cut grandma!!...."

About two dozen state workers rallied here at the state Capitol. They waved signs, chanted and called out to lawmakers headed into the budget presentation.

"Give up your pensions! Give up your health care!"

Jayne Van Kirk works at the state Department of Human Services. "I resent the fact that government officials send out this message to the general public that all state employees are overpaid lazy fat-asses that don't earn their paychecks,"
she says.

The Department of Human Services could lose hundreds of employees. State employees will also be called on to pay more for their health coverage.

"I work very hard, and I support a child all by myself, and he's in college, and, you know what, I deserve to have a fair wage, just like anybody else. I deserve benefits just like anybody else. Enough is enough," Van Kirk says.

But Governor Snyder says pretty much everyone in Michigan will have to share in the sacrifice.

"It is time for us to stand together," Snyder says.

Snyder told a packed room of legislators and lobbyists that means taxing pensions, and big cuts in money for K-12 schools, universities, and local governments.

And he said that's because previous administrations - Democratic and Republican - failed to deal with building debt and spending problems.

"I don't believe our citizens have had a chance to understand how much we've put on our credit card, how much debt we've incurred, and how little we've paid on those balances," Snyder says.

In fact, said Snyder, the total debtload adds up to $47 billion dollars - that's $4700 for every person living in Michigan.

To whittle down that burden, part of Snyder's solution is to shut down state police posts and close at least one prison - a strategy fiercely opposed by Republican lawmakers in the past.

Snyder says if cities, schools and universities want more help from the state, they will have to make cuts and find efficiencies.

"These were tough calls to make," Snyder says. "Many of us are going to have sacrifice something in the short term. But I can tell you with confidence, with conviction, by making these sacrifices, we can all win together in the long term."

The budget and spending cuts are just one side of Snyder's fiscal plan. The accountant, former computer company CEO, and retired millionaire investor also wants tax reforms that he says will make Michigan more business-friendly.

Snyder called for scrapping the complex and unpopular Michigan Business Tax - enacted three years ago in the midst of another budget crisis - and replacing it with a six percent corporate income tax that will only be paid by about a third of Michigan businesses - the ones that are incorporated. Overall, it would be a 1.8 billion dollar tax cut for businesses.

"You can't have jobs in Michigan without job-providers," says Tricia Kinley. She's with the Michigan Chamber of Commerce. She says business groups are glad to see the governor tackling tough reforms, and reducing taxes.

"We understand there are difficult decisions to make and not everyone will find all of these pieces palatable, but we think taken in total there are a lot of things to like in this plan," Kinley says.

A lot of people are also finding a lot of things not to like. Human services advocates say ending the tax credit for the working poor will drive more families with children into poverty. Local governments say revenue sharing cuts will drive struggling cities into insolvency. Seniors are angry about having their pensions taxed.

Eric Schweidewind is the president of the AARP of Michigan.

"It ends up raising our taxes over a billion dollars and, at the same time, cuts the quality of the services we'll get at the local level from government," Schweidewind says. "It will certainly raise the costs of schools in our area because they have to make up shortfalls in their revenue, and we'll have to pay more in tuition."

Governor Snyder said this budget and tax reform will only work if all the components are adopted by the Legislature with few changes. The governor knows he will be criticized for asking so much from so many people. Snyder says he will share in the sacrifice by working for a dollar a year.

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