As part of the budget process, Gov. Jennifer Granholm every year submits to the state legislature a report entitled the Appendix on Tax Credits, Deductions, and Exemptions, which details all of the various tax breaks, deductions, exemptions and credits given by the state and adds up the revenue lost due to such grants.

The latest report (PDF) contains a list of every single such tax break, ranging from the universally supported — such as exempting food and medicine from the state sales tax — to the outright foolish, like a tax credit to pay for the cleanup of contaminated land being given to the city of Benton Harbor in exchange for pristine lakefront parkland to build a private golf course.

The report notes that the total amount of revenue foregone by such tax breaks will grow in 2010 to $36.4 billion. The controversial movie tax credit is expected to grow from $116 million last year to $155 million this year. Exempting services from the state sales tax is expected to cost the state $10.1 billion in revenue in 2010.

Brownfield Redevelopment tax credits, which go to companies that clean up contaminated land and develop it to make it productive again, make sense — except when they’re given to the very companies that polluted them in the first place, as in the Jean Klock Park situation. All that does is transfer the cost of cleanup from the polluters to the taxpayers.

Gov. Granholm is proposing in her new budget to change the way such tax credits are given. She wants many of those tax credits to come with sunset provisions so the legislature has to reapprove them every few years. That may be a good start, but it also provides an opportunity for special interests to flood legislators with money to keep their tax breaks in place.

I would propose an annual report put out by the House and Senate fiscal agencies, both non-partisan, that looks at each of those tax credits and calculates what the cost and value of each one might be. That report can then be used as the basis for reaching decisions on which ones to keep and which ones to scrap. Such a report would both guide legislators to make informed choices and provide ammunition against them when they make bad choices in favor of their campaign contributors rather than in the public interest.

It should now be obvious that the state cannot continue to hand out tax breaks like candy at Christmas. We are facing billion dollar deficits every year due to declining revenue while handing out $36 billion in tax breaks – more than we take in in taxes altogether.