Commentary

Don't quit on kids to balance state budget

Legislature should close tax loopholes, raise doctors' fees, renew tax on $2 million estates

State Sen. Mike Prusi

Senate Democrats have presented a common-sense compromise to solve Michigan's looming budget crisis.

Our approach accepts painful cuts without breaking our promises to kids or our commitments to local communities. It avoids a general tax increase on consumers who are already struggling, yet raises sufficient revenue to protect vital services. And it adopts reforms that will help Michigan get more back from the federal government, instead of continuing to be a donor state. We understand that no matter what the final result, Michigan's budget will contain difficult reductions in areas we all care about -- things like environmental protection, economic development, K-12 foundation allowances and a whole list of other programs will see significant reductions.

Our goal is to make sure that in the rush to balance the budget we do not make extreme, dangerous cuts in areas that affect people's lives or cut in a way that damages our long-term ability to sustain an economic recovery. Our No. 1 goal must be to create a state that attracts jobs and people.

Michigan can no longer afford the status quo of allowing tax loopholes for special interests. Each year, the governor has proposed closing these loopholes to help balance the budget, and each year she has been rebuffed by the Republican majority in the Senate.

At the same time that some in the Legislature are considering eliminating critical preschool education for our youngest students and eliminating college scholarships that were the promised reward for good grades and test scores, they are trying to hang on to the millions of dollars we give away to oil and gas companies and others.

That is the opposite of what Michigan needs to be doing right now.

A cuts-only proposal asks those hardest hit by the economic downturn to sacrifice. If we placed an estate tax on estates, excluding family farms or businesses, worth $2 million and above, it would provide more than an estimated $130 million. Twenty-two states, including our neighboring states in the Midwest, have a version of this on the books. Why can't Michigan do the same to protect education, health care and public safety?

Unfortunately, Michigan has a history of sending more of our tax dollars to Washington than we get back. When it comes to Medicaid, we could collect an additional $250 million from the federal government to match $71 million raised by assessing a 2 percent fee on physicians, similar to the fee we already assess on hospitals, nursing homes and other health care providers. This three-to-one match totals more than $320 million.

Why would we leave this federal money on the table to be doled out to other states? Physicians would avoid the full 8 percent Medicaid reimbursement rate reduction proposed in the Republican cuts-only budget, and Michigan could avoid cuts to health care programs that provide preventive care, cancer screening and other vital services at the same time.

These reforms alone could secure more than $450 million, which would go a long way toward protecting the key priorities that make our state a place we want our kids to stay in and raise their families. Our ideas resolve the crisis without a general tax increase that would make those struggling to pay bills pay even more, and it doesn't put the burden on them through gutting important services they depend on.

There are several other proposals around equalizing tax rates on other tobacco products and tax expenditure reductions that add to the revenue stream that should also be considered.

The public expects a common sense compromise that includes cuts, reforms and salvaging critical services. The Senate Democratic plan offers just that.

State Sen. Mike Prusi, D-Ishpeming, is the Senate minority leader. E-mail comments to letters@detnews.com.