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Original article URL: http://bridgemi.com/2012/10/final-arguments-on-proposal-5/

Guest commentary

Final arguments on Proposal 5

Proposal 5 is a constitutional amendment to require supermajorities of members of each legislative chamber to approve state tax increases or seek approval from the voters. Tax increases would require the votes of at least 25 members of the 38-member Senate and 73 members of the 110-member House of Representatives. If a tax matter went to a vote of the people, a simple majority would decide the result. For full Bridge coverage of Proposal 5 — and the other statewide ballot proposals this year — visit our Ballot Mania page. Advocates were asked to make their case on how to vote on Proposal 5:

No: Prop 5
will weaken
public services

By Gilda Jacobs/Michigan League for Public Policy

The battle over Proposal 5 is part of a longer fight for Michigan’s future, pitting extremists who want to dramatically cut the role of government in our state against those who believe there is utility in having public services that contribute to our state’s quality of life. 

Gilda Jacobs is president of the Michigan League for Public Policy.

The goal of Proposal 5 supporters is to dramatically cut public education, both K-12 and at public universities. They oppose fixing our roads and maintaining bridges. They do not care about low-income children and seniors who rely on Medicaid for health care. They want fewer firefighters and law enforcement officers. 

Proposal 5 means one-third of the members of the Michigan Senate (just 13 members) could override the interests of all other lawmakers on key state tax policies. States that have adopted this strategy are, by and large, poor states with high unemployment. The dogma that says low taxes are good for an economy has been clearly disproven by the numbers, which show that economic growth follows young talent – young college grads primarily – who demand good schools and universities, safe streets and decent infrastructure. 

Proposal 5 ignores the fact that Michigan cut taxes repeatedly during the last decade – and has seen unemployment increase by 30 percent over the period. State tax revenues as a percentage of income are down 20 percent. State spending from state taxes from 2002 to 2012 increased just 5.9 percent, according to the Senate Fiscal Agency. During that period, inflation increased by 20.7 percent. We are no longer a high-tax state by any reliable, credible measure. 

Proposal 5 supporters are saying a vote for 5 is a vote to block an increase in the state’s gasoline tax. Look at the facts: In the 2002-03 fiscal year, the state’s transportation taxes brought in $2.1 billion. If that had increased at the rate of inflation over that period, the tax today would bring in $2.6 billion. Instead, it will bring in $2.2 billion – a $400 million decline, even though the tax rates have stayed the same. People today are driving more fuel efficient vehicles that consume less gas, resulting in fewer dollars available to repair roads and bridges. But the need for maintenance remains the same. Proposal 5 means Michigan’s already deplorable roads will get worse each year. 

Hospitals and nursing homes rely on Medicaid funding to cover the costs of caring for children and senior citizens. That funding comes in part from a $400 million “paid claims” tax that sunsets at the end of 2013, and leverages an additional $800 million in federal funds. That tax would never be re-approved by a two-thirds majority. The result: A $1.2 billion cut in Medicaid funding. Rural and Northern Michigan hospitals rely heavily on Medicaid funding to cover the cost of obstetric centers where babies are born. In many of those counties, more than half of births are paid for today by Medicaid. Hospitals may well close their obstetric centers, forcing all mothers to reach a hospital where their children can be safely born. 

These are just two examples of the gridlock and failure Proposal 5 would bring to Michigan. No wonder an extraordinarily large and diverse coalition has assembled to oppose Proposal 5. Gov. Rick Snyder and conservative Republicans are joined by Democratic leaders. Business Leaders for Michigan and the MEA agree. The Michigan Farm Bureau and the Michigan Catholic Conference agree. The Michigan Bankers Association and the Michigan Health and Hospital Association agree. 

These groups know Proposal 5 would hurt Michigan’s future, based on a review of outcomes in other super-minority states. Visit www.votenoonprop5.com to learn more.

Yes: Citizens
need shield from
special interests

By Lana Theis/Michigan Alliance for Prosperity

You have been hearing a lot of misinformation from Lansing politicians and special interest groups about Proposal 5, the 2/3 Amendment. Why? Because politicians and special interests want easy access to your pocketbook. Let’s dispel the myths.

Of all the initiatives voters will consider, independent analysis by groups like the Anderson Economic Group agree: Proposal 5 is the one that most clearly belongs in Michigan’s Constitution. What’s the purpose of a state constitution? It is to set guidelines for our government and to protect Michigan’s citizens. That is the definition of good tax policy, too.

Lana Theis is the president of the Michigan Alliance for Prosperity and serves as the Brighton Township treasurer.

In fact, Michigan’s Constitution already contains several taxpayer protections such as Proposal A and the Headlee Amendment. Proposal 5 is an additional taxpayer protection that requires higher legislative agreement and accountability to the electorate in decisions that would take more money from taxpayers.

Opponents of Proposal 5 claim it will be harder to do tax reform. If tax reform is code for a tax increase, yes, it will – and SHOULD – be harder. If politicians had to get 2/3 agreement to pass tax increases, the Michigan Business Tax and our ill-fated sales tax on services wouldn’t have happened in the first place.

Now that we’ve gotten rid of the MBT, a tax the governor and business groups agree was “the worst business tax in America,” let’s make it very hard to put bad tax policy back in place. If politicians cannot get the legislative approval for a tax increase, but still believe it’s necessary, Proposal 5 says you the taxpayer get the final say. If the policy-makers want to change the existing tax code to achieve  a “net tax decrease,” they can demonstrate this to taxpayers. A simple majority vote wins in November. Pass Proposal 5 now. 

Proposal 5 takes power away from special interests because special interests are in the business of asking for more money. When is the last time you heard of a special interest coming to Lansing and strong-arming legislators into not spending our money?  When Proposal 5 is passed and the special interests come asking for your money, they are going to have to have your support to get it.

You’ll hear the opposition claim that if Proposal 5 passes the Legislature will be gridlocked and Michigan will become the next California. California’s problem isn’t their tax limitation, but their spending. Their revenue has increased dramatically since their limitation was passed. They spend more than they take in. Michigan is not California. Michigan would join 15 other states with similar taxpayer protections, states that are currently economically outperforming Michigan.

Whether Republicans or Democrats are in charge, Proposal 5 protects taxpayers by demanding bipartisan support for policy decisions that take more money out of our wallets and our family budgets. This includes policy decisions like the gas tax increase lawmakers and special interests have said they will try to pass in 2012. Organizations that support Proposal 5 such as the National Federation of Independent Businesses agree: businesses need to trust Michigan enough to start doing business here. And they believe Proposal 5 is a good idea.

Opponents throw their hands in the air and yell, “What about an emergency?” You don’t create new taxes to bring in emergency funds. While bad tax policy can be created quickly under the current system, it still takes a long time to collect. Emergency response requires they look at existing funds and shift accordingly. They’ll still do that. 

Your “yes” vote on Proposal 5 creates protections necessary for taxpayers. It provides stability for our economy and encourages job creation.  Vote “yes” on Proposal 5.

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

1 comment from a Bridge reader.Add mine!

  1. Lana Theis

    The website for a yes on Proposal 5 is http://www.MiProsperity.com, we’re on facebook at Michigan Alliance for Prosperity and on Twitter at #MiProsperity

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