Spike in Mich. Gas Prices Doesn’t Mean Lawmakers Can’t Cut Government Spending

June 13, 2013

By Greg George

The recent spike in Michigan gas prices has caused a wave of news reports suggesting that it will be more difficult for lawmakers to increase gas taxes and registration fees in order to “Just Fix the Roads.” But this shouldn’t stop lawmakers attempts to find more money for roads, especially if they are a priority.

The Michigan House and Senate recently agreed upon and passed the budget for fiscal year 2013-2014 — approximately $48.7 billion, or $4,900 per person. Let’s glance back for a moment. According to the Senate Fiscal Agency, the fiscal year 2000-2001 budget was $36.95B, or $3,700 per person. In other words, the budget has increased over 30% since that time!

Why do these numbers matter? From 2000-2010, Michigan was the only state in the nation to lose population, and only recently did Michigan begin to actually gain population again. Yet, the budget grew by $9 billion. And the state portion of the budget alone grew nearly $4 billion over the last 13 years. Is there really nothing in government that can be reduced or eliminated?

Just last week, Michigan lawmakers passed a budget allocating $50M for the state’s film subsidy program. Jarrett Skorup of the Mackinac Center calculated just what taxpayers could get for that $50M (all numbers are approximate):

  • 5,313,496 potholes repaired;*
  • More than five years of pothole repairs on the state trunk line highway system;
  • The salaries of 1,200 Detroit police officers;
  • The salaries of 792 conventional public school teachers;
  • The salaries of 1,166 charter school teachers;
  • A year of education at Michigan’s public universities for 4,796 students;
  • A year of education at K-12 schools for 7,116 students; and
  • A year of Great Start preschool for 14,706 students.

Taxpayers also spend $75M on the 21st Century Jobs program, which has a sketchy record (at best) for job creation. It’s what investors would call a terrible return on investment. It’s also something that is outside the scope of government.

Michigan taxpayers pay over $107M more on state-funded construction projects because of state prevailing wage requirements. Beyond the cost-savings, government is picking one type of worker over another by forcing companies to pay the prevailing union wage and rather than wages voluntarily agreed upon through contract negotiations and business dealings.

For more than a decade, Michiganders have watched friends and family members leave the state for better opportunities. The governor and legislature should be working to restrain and prioritize government spending in order to keep the tax burden low to attract both job-creating businesses and workers.

Michigan is not an island. We compete with 49 others states for business and workers, and nine of those states do not have an income tax.

Michigan’s new Right-to-Work law demonstrates that Michigan lawmakers understand what makes a state’s economy competitive for businesses and workers. But Right-to-Work is just one piece of the puzzle. It’s time to take major steps to get Michigan’s economy back on-track. Lawmakers would best serve their constituents by working to eliminate wasteful spending so that workers keep more of what they earn and can voluntarily consume and save as they see best.

Don’t let your lawmakers cut your family’s budget. Click here to take action. Demand that they prioritize spending first and promote pro-growth reforms that bring businesses and workers to the state. You can also click here to support our “No MI Tax Hike” petition.

Greg is the Government Affairs Associate. Follow him @gregmgeorge.

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