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Should Balancing the State Budget be a Priority for Stimulus Money?

March 16, 2009

Lansing, MI - As Michigan prepares to receive at least $15 billion in federal stimulus money, there are calls to use the funds to help unemployed workers and low-income families. The president and CEO of the Michigan League for Human Services, Sharon Parks, says the stimulus money could be used to prevent further budget cuts for programs that help those who are being most hurt by the recession.

Critics of that approach feel the money shouldn't be used as a one-time budget aid, but Parks says those programs help stabilize the economy, and she's urging Governor Jennifer Granholm to avoid further program cuts, which would also result in more job losses.

"We don't have to do this, we can avoid it, because we do have the stimulus money; we can craft longer-term solutions to address the structural problems she's worried about and that are very real."

She says the stimulus money should not be used for tax cuts, which would result in temporary money to replace permanent revenue.

"It needs to be spent, whether it's on contracts for construction work, road work, bridge work; or whether it's through unemployment benefits, food stamp benefits, people spending money. Those dollars need to turn over in the economy."

Parks says the Michigan League for Human Services is proposing comprehensive tax reform so that when the economic slump ends, a fix for the structural budget problems will be in place.

Tony Bruscato, Public News Service - MI