Calling proposed budget cuts “devastating,” the Michigan League for Human Services, a century-old non-profit organization that advocates for low-income residents in the state, released a report demanding a long-term solution to Michigan’s budget problems that allows the state to adequately fund social welfare programs that are increasingly relied on during a time of economic recession.
The report notes that state revenue has continued to fall, prompting last-minute searches for quick fixes to plug holes in the budget nearly every year. Those quick fixes often involve cutting services to the poor and needy and this year is no exception. Facing a $2.7 billion deficit, the Republican-controlled Senate is proposing $1.3 billion in cuts, including steep cuts in social services:
In the Department of Community Health budget, the Senate-passed version reduces General Fund spending for low-income households by 24.5 percent, about $500 million below the governor’s revised budget recommendation and about $400 million below the DCH budget adopted by the House. Similarly, the Department of Human Services budget passed by the Senate would reduce General Fund support by $330 million (29.4%). The cuts include reductions in cash assistance grants, the annual children’s clothing allowance and child day care programs.
MLHS president Sharon Parks said in a statement, “Vulnerable people and the working poor are being asked to sacrifice to balance the
budget. This ‘shared pain’ approach unfairly hits those who have the least resources to weather this terrible economic storm.”
The League is proposing comprehensive changes in the state’s tax structure, noting that the loss in revenue is due to the fact that the total average percentage of Michigan residents’ income going to the state has dropped from 9.49 percent in 2000 to 7.3 percent this year. If the state’s tax burden were the same today as in 2000, the report says, state revenue would be $7.5 billion higher, more than erasing the yearly budget shortfalls.
The League wants the state to move to a graduated income tax, as 34 other states and the District of Columbia currently have, and extend the sales tax to services as well as goods in order to make up for the decline in revenue and fully fund the social service programs that so many Michigan residents are dependent on in lean economic times.