COLUMN: Snyder's budget cuts necessary, could still be improved
At a time when the state faces a budget deficit of $1.4 billion, some painful cuts were necessary, and for the most part, Gov. Rick Snyder cut spending in areas that were most appropriate in his 2012 budget.
One key way his budget will reduce the deficit is in removing the tax exemption on senior’s pensions. That exemption alone would have cost the state $900 million, and Michigan is one of three states in the nation with such an exemption.
As of now, pensions of public officials, whether federal or local, are completely exempt, while private pensions are exempt up to $45,120 ($90,240 for couples filing jointly).
Removing this exemption only makes sense. Pensions are merely a form of income during retirement, so why should people be exempt from paying taxes just because they are elderly?
Everybody else has to pay state income taxes, including college students, who often have much lower incomes than retirees.
Cuts to K-12 education were kept to a minimum, with only a 4 percent cut. While universities will see a 15 percent cut, $83 million is being set aside for universities who don’t raise tuition by more than 7 percent.
While the cuts to higher education will hurt, the money has to come from somewhere, and keeping the focus on K- 12 education until the state gets on its fiscal feet was a smart move by the Governor.
One area where the cuts went too far was the Department of Corrections. The decision to privatize food service and prison stores was a good move, saving the state $32.2 million, but closing a prison later this year is an unnecessary move, and it will only save $18.9 million.
The decision was made based on the fact that the prison population is down from its highest level in 2006, but the reason the population is down is because the state started paroling more prisoners so that Standish Maximum Correctional Facility could be closed in 2009.
Even Republican Attorney General Bill Schuette advocated against the closing of an additional prison, because increasing the number of paroles granted to reduce the prison population is not a safe way of reducing the state’s budget.
While there are good and bad cuts in Snyder’s budget, further cuts could have been made by reducing the cost of his staff and cabinet.
Snyder’s ten-member senior staff alone makes $1.4 million a year, and his twelve-member cabinet makes $1.9 million.
John Nixon, the budget director, makes $250,000, which was increased from the former director’s salary because two departments were merged together. But is heading two departments really worth that much money?
If the governor is truly committed to fixing the budget deficit, reducing his staff and cabinet’s salary to below $3 million would be a further step to prove his commitment to the state.
