Chalk the failure of last month’s jail millage up to one of the great constants of American political life — the public’s reflexive aversion to taxes.

Angela Cesere

Some liberal opponents of the plan to expand the Washtenaw County Jail, like the No Giant Jail Committee, argued that our country already has some of the highest incarceration rates in the world and needs legal reform, not more prisons. If voters had treated the millage as a referendum on prison policy, it should have been more popular with strict law-and-order conservative voters than with liberals worried about flaws in the judicial system and the rise of the prison-industrial complex. A look at the votes cast, however, hints that what drove voters was the simple desire to avoid a tax increase.

The millage failed, county-wide, by a solid margin. It had a fighting chance, with 42 percent support, in precincts that voted for Sen. John Kerry (D-Mass.) last November. It even came close to passing in Ann Arbor. But in Washtenaw County precincts that voted for President Bush (yes, they exist), it went down three to one. These are the same people who agreed with the simple argument on a billboard along I-94 during the presidential campaign: “It’s your money. Bush/Cheney ’04.”

The motivation to avoid taxes also drives politics at the state level. Former Michigan Gov. John Engler stayed in office for 12 years in part by delivering tax cuts. (Such formidable Democratic opponents as Geoffrey Fieger, best known as Jack Kevorkian’s attorney, also made Engler’s life easier). In 1999, Engler signed laws cutting the state’s income tax over five years and phasing out the single business tax over two decades.

Tax cuts in good times might have been meant to return excess revenue to taxpayers, but once the economy soured, they were perceived as essential to renewed growth. Though the state was hemorrhaging money, slowdowns of the incremental tax cuts — let alone tax increases — were not on the table. The income tax cut proceeded as planned, and, though the bill enacting the SBT cut had included a provision halting further cuts if the state’s “rainy day fund” ran low, Engler signed a bill to speed up the SBT’s elimination to 2010. Responsibly enough, this legislation included no plan whatsoever to replace the revenue derived from the SBT after 2009.

Why should we care? Well, the SBT goes directly into the state’s general fund — the same portion of the budget that includes the University’s yearly appropriation. Historically, about a quarter of the general fund has come from the SBT. Given Lansing’s repeatedly demonstrated willingness to cut higher education funding, public universities could take a considerable hit if the law is left unchanged.

The current SBT is fairly controversial, and Democrats introduced legislation yesterday to overhaul the SBT’s structure. Though the bill would increase taxes for some, it is designed to be revenue-neutral and would result in a tax cut for three-fourths of Michigan businesses. Granholm spokeswoman Liz Boyd is hopeful that the Republican-controlled legislature will pass the bill, saying the administration was “taking the legislature at its word that it will give the Governor’s proposal a fair hearing.” With state Republican leadership favoring a decreased business tax, however, I’m less optimistic.

There are no quick fixes left to deal with Michigan’s structural budget deficit, and the rainy day fund is gone. Certainly, previous tax cuts have contributed to the chronic lack of revenue. Former State Treasurer Douglas Roberts told me that the ’90s tax cuts cost the state $6 billion in FY 2003 alone — far more than the deficit.

One obvious solution is to rescind some of the tax cuts. Roberts argues the state would be in even worse fiscal shape if it hadn’t made itself more favorable to businesses and individuals through tax cuts. Cutting taxes too far, however, results in an equally unfavorably low level of government services. No one wants to live in a state with high taxes — or one with lousy schools and roads. Though some conservatives deplore public spending on principle, most people like receiving government services. They just don’t want to pay for them.

Despite the logical need for the public to balance its appetite for services against its lust for low taxes, there is rarely the political will — in Washtenaw County, in Michigan or in the nation as a whole — for any tax increases, for any reason. Alabama Gov. Bob Riley, a Republican and a Southern Baptist, couldn’t garner support for a 2003 referendum that would raise taxes to avert a fiscal crisis so bad the state was contemplating releasing prisoners — not even by telling citizens a “yes” vote was their “Christian duty.”

Death and taxes are equally inevitable, and about equally unpopular. Right-wingers have used this fact in a scheme to shrink government known as “starve the beast,” where excessive tax cuts in good times lead to shortfalls and, presumably, program cuts in bad times. This might be what’s happening in Michigan, but the Bush administration’s expansion of the federal government while running huge deficits argue against the theory’s viability on the federal level. Most voters want both low taxes and lots of government services, and to hell with the math.

 

Zbrozek can be reached at zbro@umich.edu.

 

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