By John Lindstrom
Publisher
Posted: January 4, 2018 3:42 PM

State government finds itself in an enviable position, possibly being enriched by as much a $1.4 billion because of how the new federal tax law is structured. For those still recovering from holiday overindulgence and too bloated to get the gist of the story, the federal tax changes effectively do away with the personal exemption in favor of expanding the standard deduction, and because Michigan’s personal income tax law allows state personal exemptions only to the extent there are federal personal exemptions the state could see an unexpected benefit of as much as $1.4 billion.

So far, everyone has been very noble in saying the state should not have that money, that it was intended as a tax cut on the federal side and should not be a tax increase on the state end. It would amount to an annual tax hike of $170 per taxpayer and dependent. Governor Rick Snyder, Treasurer Nick Khouri, newspaper editorials (yes, they still write them occasionally) and others have said steps need to be taken to ensure the people aren’t on the hook for that money.

It is a little surprising, nonetheless, that no one thus far has raised a peep about: Wait a minute, couldn’t we use that money?

If Michigan decided to hold onto the $1.4 billion there are a number of different areas that could lay some claim arguing spend on us and then the taxpayers will save money in different, tangible areas.

One of this reporter’s neighbors said immediately when the topic of the $1.4 billion came up, “Spend it on roads.”

Even with increased funding beginning to work its way to the Department of Transportation, long-term highway financing remains uncertain. Another $1.4 billion could go a long way towards the state repairing more roads and bridges. One could also argue it will save the average taxpayer what they would spend on rotten road-related car repairs, tires and other costs. Plus, think of the marketing for economic development better roads affords the state.

Or Michigan’s universities. They too have a legitimate claim to more money since they are still working through not just Mr. Snyder’s cut in 2011 but former Governor Jennifer Granholm’s major cut in 2003. State funding of universities has shrunk dramatically over the last two decades, forcing the universities to raise tuition rates which in turn is making it more and more difficult for the children of the working class and middle class to afford college at all. Spend $1.4 billion on us, the universities could say, and we can hold the line better on tuition, meaning you save money there. Plus, think of the marketing for economic development by promoting a better educated and trained workforce.

How about Michigan’s local governments? They can tell you how they have taken it on the chin financially between the Great Recession, restrictions in the Constitution on recouping some of their property tax revenues and controversial changes in revenue sharing. They can also argue the state is more interested in them dealing with retirement costs than with local services. Spend the $1.4 billion on us, they could argue, it could all go towards long-term retirement costs and local residents would not then see cuts in police and fire protection, in public works maintenance, libraries, recreation services and the like. Or we wouldn’t have to ask the local taxpayers to contribute more in taxes to pay for those services or for the retirement benefits. Plus, think of the marketing for economic development by promoting are well-protected, well-maintained, cost-efficient communities.

Yeah, well, tough luck guys, it is pretty clear the state is going to find a fix of some sort to ensure the $1.4 billion does not come to state coffers. That being the case, one could just say, okay fine then, the people will just end up having to pay that money out one way or another.