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.