Cautious optimism needed for Michigan budget

The new $53.2 billion state budget allows for a spending increase of 6 percent this year. This scenario came about mostly due to Michigan’s new expansion of Medicaid eligibility to more low-income adults and expected higher tax collections in an economy that’s seeing an uptick.

That’s good news. Spending more is often good, depending how responsibly the money is used. The $3.1 billion funding increase includes an overall 7 percent increase in revenue sharing to local governments.

Marquette City Manager Bill Vajda told The Mining Journal’s Mary Wardell that because of proposed tax restructuring within the state budget, the local effects are more complex.

He said the Economic Vitality Incentive Program was eliminated as the basis for qualifying for revenue sharing. There also are proposals to eliminate and restructure personal property tax.

Until the restructuring of personal property tax in August is decided via referendum, Vajda said it’s too early to determine the full impact.

This comes not too long after a very cold and expensive winter that have placed financial burdens on affected local governments and taxpayers, those in Marquette County included.

To complicate matters, legislation that would have more than doubled state gasoline and diesel taxes – thereby improving road funding – stalled recently.

It’s unknown if legislators will want to even discuss hiking taxes, often an unpopular subject, after the November election.

Ask anyone in municipal fiscal management in Marquette County how their governments will manage if federal and state money for road maintenance doesn’t materialize. If the polar vortex makes another appearance next winter, which in the Upper Peninsula could be a few months from now, that could be devastating.

We like generally what Snyder has done since getting elected. But he and the legislature must keep infrastructure funding at the top of the list if local governments want to remain financially solvent.

– The Mining Journal, Marquette