Financial trouble looms

The VIEW from here



Genesee County is in trouble. I don’t think it takes a rocket scientist to figure that out. Honestly, the whole state is suffering from major economic woes, but the troubles right here in our own backyard seem to be mounting.

Case in point — the Genesee County Board of Commissioners will consider a budget today for 2011 that includes about $17 million in cuts and calls for the elimination of 119 jobs.

It’s a case of economic hardship. Property values have dropped drastically here and in turn it is costing the county property tax revenue. The potential budget without these cuts would have been nearly $18 million.

School districts were saved from major cuts this year, but next year is still up in the air. The state could be struggling with the education budget before long and that could put area school districts in jeopardy. Some districts, like Burton’s Bendle, are finding drops in enrollment are adding to the economic turmoil.

When is it going to stop?

As we all know the economic pinch isn’t just at the governmental level. Government is at the bottom of a trickle-down effect that starts with business and citizens. Employers in Michigan cut 50,300 jobs last month, the biggest drop since January 2009, according to the U.S. Department of Labor. In August the state’s unemployment rate was 13.1 percent — second highest in the nation behind Nevada.

I’m certainly not one to fully understand how to stop an economic crisis, but a lot of what I’ve read indicates we need a lot of good, innovative ideas and changes to the tax code in order to turn things around. The Center for Michigan suggests changes are necessary to close tax loopholes which are costing the state some $32 billion.

Some suggested changes on the Center for Michigan’s website offer food for thought: They suggest taxing vending machine pop and candy, which is currently exempt. This alone would raise an estimated $25 million in revenue.

Another is ending an exemption on tobacco wholesalers who are “excused from paying tobacco taxes

on goods sold to retailers who go out of business or otherwise stiff the

wholesaler.” This one, if changed, would bring in another $17.7 million.

The state also exempts sales tax on international phone calls, charging them as if they were a typical long distance call. Ending this practice would generate another $22 million.

The federal government is also tossing around the idea of raising alcohol taxes, which apparently has not been adjusted in Michigan for about 40 years. Just adjusting beer taxes to the rate of inflation would bring in about $250 million annually.

I’m not necessarily for additional taxes, but some of these suggestions are at least worth bringing to the table. If the state, county and local governments can no longer support themselves on property and sales taxes and reasonable cuts in services have been made to bring government down to a more manageable size, then I think tax increases should be considered. And if closing tax loopholes will make a difference, then hopefully they will receive proper examination by our elected

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