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    For the fiscal year 2009 (FY09), Michigan’s tax expenditures are anticipated to rise 6.7%, or in dollar terms- almost $2.2 billion.  The tax expenditure rate is increasing faster than that of the state’s revenue.

    .

    Other concerns related to tax expenditures include the fact that they do not need to go through the House Appropriations Committee, and also that they are not regularly checked by the legislature.

    Often, tax expenditures are defended on grounds that they are necessary to stimulate economic growth.  However, a report by the Louisiana Department of Economic Development in 2003 stated that incentives “often have no measurable impact on growth, and even when they do, it is likely that they are not cost effective”

    Michigan legislators may want to look into revising tax expenditure policy when planning the state budget.  Given the current economic crisis in Michigan, there is no valid justification for spending more money that we don’t have.

     

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    About Us

    The Michigan Policy Network is a student-led public education and research program to report and organize news and information about the political process surrounding Michigan state policy issues. It is run out of the Department of Political Science at Michigan State University, with participation by students from the College of Social Science, the College of Communication, and James Madison College. 

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    Meet your Policy Fellow: Nicholas Biondolillo

    Nicholas Biondolillo is tax policy correspondent for the Michigan Policy Network. Nicholas is a first-year student in Engineering at Michigan State University.