Michigan residents say they’ll pay more in taxes for better roads. Otherwise, the public offers very little clear mandate on state tax and spending policy. The public wants state leaders to find innovative solutions for Michigan’s problems at our current taxation levels.
We asked the public to weigh six tax and budget questions:
- In general, what tax advice do you give leaders?
- If you were to cut a tax, which would you cut?
- If you were to increase a tax, which would you raise?
- Are you willing to pay more taxes for roads?
- If you were to decrease spending, what’s your first priority?
- If you were to increase spending, what’s your first priority?
The new normal: No new tax cuts or tax increases beyond roads
This is the only portion of the citizens’ agenda defined more by what participants didn’t say. Candidates running to become Michigan’s next governor and legislators are in a precarious position when it comes to public money. Roughly a third of state residents want tax cuts, roughly another third want tax increases, and the rest favor the status quo. Any major tax rate change (up or down) threatens to antagonize the majority of the population.
So if leaders follow this murky public will, the total amount of public money we have to address our state’s issues won’t change much beyond overall economic trends. As one Community Conversation participant said, “People are beginning to settle to a new normal about what our state should look like. People have adjusted their standard and outlook. Outlooks have been softened.”
Michigan residents do, however, want to see systemic changes in our economy, education systems and quality of life, as addressed earlier in this report. The current allocation of public resources does not address these urgent public concerns. Residents are looking to state leaders for new and innovative ways of doing business. This means strategy and service delivery overhauls, more efficiencies, and intensified fights over public spending priorities may all be part of “The New Normal.”
Fix Michigan roads – and we’ll pay more to do it
We did find one very notable exception to the status quo. The majority of Michigan residents want the roads fixed – and they are willing to pay higher taxes to make it happen.
Fifty-two percent of conversation participants and 58% of those polled say they would pay more to repair roads and bridges. More than 50 percent of full- and part-time workers, retirees, whites and middle- and upper-income households support paying more taxes for roads. The notion does not carry majority support among Hispanics and low-income workers.
Even in this area of general agreement, Michigan residents have strict instructions for how they would like this increased tax revenue to be specifically used. One participant said, “Roads need to be repaired the right way the first time instead of just patching them up. It seems like having to patch the same roads over and over again every year would cost more in the long run.” Transparency in taxing and spending is of high importance for Michigan residents. Another participant said, “In our homes, we have to operate according to our budget. Public funding needs to be accountable and stick to the budget. I want accuracy, transparency and accessibility.”
No agreement on taxing and spending
When giving general tax advice to future Michigan leaders, Community Conversation participants are completely divided. About a third support cutting taxes, raising taxes, and keeping taxes the same, respectively. In the telephone polls, 43 percent of participants support cutting taxes, 36 percent would like to keep taxes about the same, and 21 percent would like to raise taxes.
Conservative candidates who would like to continue to cut taxes and shrink government spending do not have a public mandate to do so. Likewise, liberal candidates interested in raising taxes and making investments in areas such as education or social services do not have a public mandate to do so.
When asked which of Michigan’s five major taxes (if any) most deserve cuts and increases, residents’ lack of consensus on public money is illustrated clearly. No specific tax receives higher than 34 percent support as a first priority for cuts in conversations or in the polls. Similarly, no specific tax increase is recommended by more than 34 percent of participants in conversations or polls.
Slightly more common ground can be found in participants’ recommendations about public spending, particularly on spending decreases. Fifty percent of conversation participants would most like to see cuts to general government, as would 38 percent of poll participants. Yet, general government spending accounts for only eight percent of Michigan’s total state government spending. Even if cuts are made in this area, this does not free up many resources to reallocate to other spending priorities.
When it comes to increased government spending, the top priority for both conversation participants (46 percent) and poll respondents (39 percent) is K-12 education. However, these participants do not represent a majority, and those in favor of increasing K-12 funding are outnumbered by the general majority of Michigan residents who do not favor overall tax increases. Some participants recommend looking for more ways to be more efficient with the dollars we already allocate to education. One such participant said, “One of my concerns is education, which seems to be the big issue in this room. But looking at the budget, we’re already spending 41% of state budget on education. Maybe we need to look at how we are spending it.”
The bottom line: Get creative
Michigan residents want it all – address urgent priorities with no new taxes (except for roads).