In the last ten years, Michigan’s per capita income has fallen from 19th to 38th, our population growth has been stagnant, and state revenues have declined some 30%. We continue to be plagued by high unemployment and our tax system is uncompetitive for attracting and retaining jobs.
Our state leaders did not create the current economic crisis, and the options for solving the crisis represent admittedly difficult choices. But the choices aren’t getting any easier. The State Fiscal Agencies have identified a $300 million gap in the current year budget; the FY 2011 budget deficit could grow by an additional $500 million with the loss of federal Medicaid assistance; and, looking out to Fiscal Year 2012, the federal American Recovery and Reinvestment Act (stimulus) dollars will go away, adding another $1 billion to the deficit.
The proposed solutions we are hearing from our leaders are more cuts to our communities and universities – two areas that job providers consider critical for future growth. In the last ten years state spending for our communities and universities has been cut 34% and 17% respectively. During the same time, spending on corrections has increased 27%, giving Michigan a per prisoner incarceration cost that is 30% higher than the average of surrounding states. Rather than making further cuts to areas that aid job creation, the Legislature should look for savings by bringing corrections spending in line with the region.