LANSING, Mich. - When Gov. Rick Snyder delivers his State of the State address today, many Michiganders will be waiting to hear if his plans for the estimated $1 billion budget surplus include tax cuts. However, a new report suggests that's not the way to stimulate the economy.
Karen Holcomb-Merrill, policy director, Michigan League for Public Policy, said across-the-board tax cuts only serve to drain resources from the very programs and services that fuel economic growth.
"A good education system, good strong communities and public safety, good roads and good bridges- that's what we need to grow our economy here in Michigan, not income tax cuts," Holcomb-Merrill said."
The Snyder administration has said it will be critical for lawmakers to use "long-term thinking" when it comes to what should be done with the surplus, and that many proposals are on the table at this point. The full report is available on the Michigan League for Public Policy website, www.mlpp.org.
Holcomb-Merrill said it is misleading to look at the current budget situation as some sort of windfall or jackpot to be handed out, when it is just a one-time scenario in which revenue came in higher than originally projected.
"Because then what we're going to be faced with down the road are deficits again, and the state has experienced a lot of deficits and as a result a lot of cuts to critically important services over the last decade," she explained.
The report also warned that a tax cut would disproportionately benefit the state's wealthiest taxpayers and serve to widen the gap between rich and poor. Over the past decade, Michigan's K-through-12 School Aid fund has been cut by 20 percent, and higher education has been slashed by 37 percent.
The full report is online at www.mlpp.org.
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The mayor of Lancaster, Pennsylvania is voicing concerns about the state budget delay, warning it could affect the city's more than 58,000 residents.
Lawmakers missed the June 30 deadline for the fourth year in a row.
Danene Sorace, mayor of Lancaster, said she is closely monitoring both the state budget and the federal transportation, housing, and urban development budget coming before Congress today, noting both have significant implications for the city.
"There's been a significant reduction in federal funds that are coming to the state," Sorace pointed out. "How the state, in a divided House and Senate, reconcile these reductions in federal funding for Medicaid and address the other issues at hand, specifically equitable school funding, is yet to be determined."
Gov. Josh Shapiro said the state budget talks are making progress and expects a deal soon.
Sorace added since the "One Big Beautiful Bill Act" has passed and the state must deal with reduced federal funding, Lancaster will likely experience losses in health care access. She explained the city is fortunate to have strong hospitals and community health systems, which is not always the case in rural areas.
"I think that long term, the impacts are going to be potentially more damaging," Sorace observed. "For our rural brethren in other parts of Pennsylvania and across the country, we're more concerned about their access to health care."
The new law slashes Supplemental Nutrition Assistance Program funding by $186 billion over the next decade, adding stricter work and reporting rules, threatening benefits for many Pennsylvanians.
Sorace emphasized food insecurity was already rising before the cuts and she now expects even more demand at local food pantries.
"Our nonprofit community is trying to figure out what the state is going to do to help fill those gaps," Sorace stressed. "Of course, we're very concerned about food insecurity, especially during the summer months, when kids aren't in school and don't have breakfast and lunch always available to them."
Sorace added she recently joined more than 200 mayors at the annual meeting of the U.S. Conference of Mayors to discuss key issues, including housing and public safety. She underscored cities across the country are making progress on public safety, highlighting Lancaster's achievement of its lowest homicide rate since 1983.
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While cuts to food support programs and Medicaid gained attention as the debate over the budget bill went on, there is also a long-term likelihood it will result in automatic spending cuts to Medicare.
According to the Congressional Budget Office, the reconciliation bill is projected to add more than $3 trillion to the deficit over 10 years. If the estimate is accurate, the Statutory Pay-As-You-Go Act would require the executive branch to enact automatic spending cuts, including 4% annual cuts to Medicare starting in January, translating to around $500 billion in cuts over 10 years.
John Geer, professor of political science at Vanderbilt University and co-director of the Vanderbilt Poll, said a spring survey found Tennesseans were broadly opposed to cuts.
"We ask about Tennesseans' willingness to support cuts to Medicaid, Medicare, Social Security, veterans, etc.," Geer outlined. "And the truth of the matter is that Tennesseans are opposed to cuts in any of these programs. And it doesn't matter your partisan stripe, whether you're a liberal Democrat or a conservative MAGA-ite, you don't want to see these programs cut."
More than 1.5 million Tennesseans depend on Medicare. Congressional action would be needed to avoid automatic cuts, likely requiring a 60-vote majority in the Senate.
While funding to research under the National Institutes of Health would not be subjected to automatic cuts, the Department of Government Efficiency has already fired 2,500 researchers at the NIH and canceled more than 800 research grants. Geer's polling found more than 70% of Tennesseans oppose cutting funding for basic research.
"We asked a battery of questions about cutting research at universities, at hospitals, for drug discovery, etc., and again, there's partisan differences," Geer reported. "The MAGA folks, so to speak, are happy to do the cutting but the rest of the state has concerns."
The poll found 73% of Tennesseans support research at teaching hospitals and 66% supported research at universities.
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As the U.S. Senate has approved President Donald Trump's tax cut and spending bill, health care advocates are hoping to get California's Republican members of Congress on board to reject huge potential cuts to Medicaid, known as Medi-Cal in the Golden State.
The House approved the massive budget bill once before but now must reconsider the changes made in the Senate.
Matthew Herdman, California state director for the nonprofit Protect Our Care, hopes three California House members in particular will "flip" their votes.
"We believe that it's possible to stop this," Herdman explained. "When it initially came through the House, it only passed by one single vote, which means any one -- of David Valadao, Young Kim or Ken Calvert -- could vote against this in order to stop it."
The Congressional Budget Office estimated the Senate version of the bill would slash about $1 trillion from Medicaid and other health programs and it is forecast to cause almost 12 million people to lose health coverage by increasing work requirements and requiring people to verify their eligibility more often. Backers said the savings are necessary to partially cover the cost of extending Trump's 2017 tax cuts.
Rep. David Min, D-Calif., who represents parts of Orange County, said the bill would still increase the national debt by trillions of dollars.
"It's all because of this completely evil and immoral agenda to give more money to people in the world who don't need it," Min asserted. "This is so wrong, and we need to fight back."
Naida Tushnet, a member of the Long Beach Gray Panthers, said she is worried about low-income older people who rely on both Medicaid and Medicare, particularly for long-term care.
"If they have to keep filing, even if they're capable of doing it all, they're going to fall into the cracks, because the system -- that's all online -- has been stripped of humans, because they fired all those other people who could take it on the phone and talk them through it," Tushnet outlined.
President Trump has set a deadline of July 4 for final passage of the bill, so the Republican leadership in the House is furiously negotiating and will try to hold a vote in the next few days.
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