Tinkering at the edges won't solve state's budget crisis

In his analysis of the recent economic stimulus deal between Governor Granholm and legislative leaders, Phil Power is absolutely correct when he points out that "tinkering at the edges won't solve state's budget crisis." Unfortunately, he promotes policies that would continue Michigan's economic slide.

Power believes the state should eliminate the Single Business Tax (a great idea) and replace it with a sales tax on services (a poor idea). This “tinkering” does nothing to solve Michigan’s problem of an overall excessive tax burden. Cutting one tax and imposing another merely shifts the burden and does nothing to improve the overall climate. The state must cut taxes to improve the business climate and offset those cuts with decreased spending.

The state’s precarious financial position is due to the millions of dollars wasted on corporate welfare, “cool” cities, and other frivolous programs. For years the Mackinac Center, whose free market proposals often conflict with Power's preference for more government control, has proposed a number of ways to reduce spending and generate revenues through the sale of non-essential assets.

In addition to lowering taxes and cutting expenditures, our elected officials could attract employers by

- subjecting all regulations to a rigorous cost/benefit analysis;
- improving education through more parental choice;
- deregulating the telecommunications and electricity markets and opening them to innovative technologies that can drive our high costs below the national average; and
- passing a right-to-work law to make our labor market competitive with other states.

Power calls the package "well-intentioned" as if it mattered. Results matter, not intentions. But if we must find some bright spot in this package, perhaps it is the possibility we can pave our crumbling roads with these intentions. Unfortunately, even that leads us to an undesirable destination.

[Letter to the Editor - Farmington Observer. Published 11/17/2005]