Michigan’s Tax System Needs Reform Now

A $3billion dollar deficit. Massive proposed cuts to education. Slashing our children’s future.

And without significant change, we’ll be in exactly the same place next budget cycle.

The answer is clear: Michigan urgently needs to update its antiquated tax system.

The Michigan Education Association is joining with 11 other state associations to call for an immediate and fundamental reform of Michigan’s current tax system.

“Michigan’s current tax system is failing its citizens,” said Michigan Education Association President Iris K. Salters. “The economic problems the state has faced during the current decade are the result of a tax system that has simply not served the state well,” she said. “Revenues are declining much faster than income and not simply because Michigan’s economy has deteriorated.”

The MEA and the other associations believe action is needed to preserve Michigan’s quality of life and to retain its talent, business and industry into the future.

“There is a fundamental disconnect with how (state) revenues grow compared to the growth of income,” said Gary Olson, director of the nonpartisan Michigan Senate Fiscal Agency and a nationally recognized authority on state fiscal issues. “The (state’s) tax base, especially the sales tax, is not growing with the economy at all. That’s going to have to be addressed, sooner or later, by the Legislature,” he said.

Further, Olson indicates that personal and business income has dramatically declined as a percentage of state revenue during the last decade.  “Revenues are declining much, much faster than income – it’s a concern,” he said. “This is not a problem tied directly to the collapse of the economy.”

Educators from preschool through higher education have focused on efficiency during this economic downturn and will continue to work on fundamental reforms.

For the sake of Michigan’s students and all of its citizens, the Legislature must reform Michigan’s tax system now.

The following associations representing K-12 through higher education statewide strongly urge the state Legislature to reform Michigan’s tax system.

• AFT Michigan
• Michigan Association of Intermediate School Administrators
• Michigan Association of School Administrators
• Michigan Association of School Boards
• Michigan Association of Secondary School Principals
• Michigan Community College Association
• Michigan Parent Teacher Student Association
• Michigan Elementary and Middle School Principals Association
• Michigan Education Association
• Michigan School Business Officials
• Middle Cities Education Association
• Presidents Council, State Universities of Michigan

Updated: September 16, 2009