Each Wednesday, Morning Edition Host Christina Shockley sits down with Michigan Radio’s Senior Political Analyst Jack Lessenberry to get an update on state politics. This week, the focus is on Governor Snyder’s budget proposal and what cuts he might suggest.
Snyder is set to release the budget proposal on Thursday, and there has been a lot of speculation as to how Snyder is planning to fix the state’s fiscal predicament. While it seems that Snyder is intent on replacing the Michigan Business Tax, other changes to the budget remain uncertain. As we wait for Snyder’s budget proposal, Lessenberry says, “The one thing we know for sure is that two plus two equals four. There’s a budget deficit of at least 1.8 billion dollars, and they have to get the money somewhere."
Though few know what cuts Snyder is planning to propose, there is no shortage of discussion regarding what could or should be cut from the state’s budget. Lessenbery says,
“They’ve sort of ruled out Medicaid, or at least most of Medicaid... There’s some hint they may privatize prisons. They’ve sort of floated this idea about going after private pensions. There’s no place they can go that they’re not going to get some pushback and some angry reaction from somebody. So everybody wants everybody taxed except themselves, and that’s going to be a problem.”
Whatever Snyder ends up proposing Thursday, Lessenberry says he’s going to have to sell his plans to both Democrats and Republicans in the Michigan Legislature.
“He’s got to make them think that however bad whatever he proposes is, that something else would be worse. Obviously he’s going to need a majority. If he can’t get all his Republicans, he needs a coalition of Democrats, plus some Republicans.”
In a recent interview, Snyder’s Budget Director, John Nixon, hinted that perhaps those receiving six-figure pension incomes should pay some taxes on that money, but, needless to say, many of those receiving six-figure pensions are bound to disagree. While Nixon has suggested raising revenue by taxing some private pensions, public sector pensions have not been mentioned as a source of revenue. Lessenberry says, “We totally exempt public pensions right now. Michigan is one of the sweetest states in the world for retirees… There’re only four states that don’t tax pensions at all.”
After Snyder proposes his budget, the Legislature needs to either pass it or produce a new budget that can be agreed upon by September 30. If that date comes and no budget has been signed into law, the State will shut down. In the intervening months, Lessenberry expects a lot of battling in the Legislature.
“There’s going to be a lot of screaming and hollering and back and forth. I expect we’re going to see some months ahead consumed with fighting over the budget.”
Snyder has said that everyone is going to have to sacrifice for the state to get its finances in order. Meanwhile, Brian Calley, Snyder’s Lieutenant Governor, likened the impact of the budget to an atomic bomb.
Even though Snyder’s Administration has since stepped back from the atomic bomb analogy, Lessenberry thinks they may be trying to soften the eventual blow of the budget by exaggerating its impact now. “There is some school of thought that thinks they’re really trying to scare the heck out of people now so that whatever they propose will sound less bad,” he says.
Still, however the budget is balanced, Lessenberry thinks Michiganders can expect some sacrifices made on their behalf.
“The one thing we know is that the typical Michigander is going to get less services. They’re going to get less from the state government than they’ve come to expect. Now, everybody is in favor of cutting taxes and balancing the budget, but nobody really wants to give up services, and they may get a shock.”
By Eliot Johnson - Michigan Radio Newsroom