Traverse City Record-Eagle


February 12, 2010

Granholm proposes expanding sales tax

LANSING (AP) -- Michigan Gov. Jennifer Granholm on Thursday unveiled a budget proposal that included extending the tax to services while eliminating a business tax surcharge over the next two years.

The proposals were included in a $47.1 billion budget plan that calls for no cuts in spending to public education, local governments or universities and community colleges. It would trim the state work force and require state workers and teachers to pay more toward their pension and health care costs when it takes effect Oct. 1.

The business tax cuts and changes in personnel costs got a warm reception from many business groups and Republicans. But the Democratic governor will face a tough task getting the sales tax extended to services, even with lowering the tax rate.

"We are very disappointed that, with Michigan leading the nation in unemployment, the governor refuses to bring the cost of state government in line with taxpayer ability to pay," said Jim Holcomb, Michigan Chamber of Commerce general counsel. "Instead she offers an agenda that includes a $554 million sales tax increase on working families during a recession."

Granholm said the state cannot continue to cut funding for public schools as it did this year. Without the extra money, she said school districts could see a $225-per-pupil cut in funding next year in addition to the $165 cut they took for each student this year.

"We still have to invest in the things that businesses want in order for them to grow," she said. "That means education. Education directly relates to job creation."

Under Granholm's proposal, the sales tax wouldn't apply to health care and social assistance, education, new construction, real estate and insurance commissions and services directly connected to business operations. It would be extended to services on Dec. 1.

Text Only

Twitter Updates
Follow us on twitter
Associated Press Video
Doctors Remove 232 Teeth From Teen's Mouth Bradley Cooper Explains His Voice in 'Guardians of the Galaxy' Deja vu: Another NYPD officer choke-holding a suspect 'Fifty Shades of Grey': Watch the Super Sexy First Trailer Now! Reports: Ravens RB Ray Rice Suspended For 1st 2 Games Of The Season Chapter Two: Becoming a first-time director Air Algerie plane with 119 on board missing over Mali Diamond Stone, Malik Newman, Josh Jackson and others showcase talent Free Arturo - The World's Saddest Polar Bear A Look Back at Batman On Film Through The Years LeBron James -- Dropped $2k On Cupcake Apology ... Proceeds To Benefit Charity Snoop Dogg Says He Smoked Weed at the White House Raw: Fight Breaks Out in Ukraine Parliament Chris Pratt Interrupts Interview To French Braid Intern's Hair Shirtless Super Mario Balotelli Dances While Ironing - @TheBuzzeronFOX Whoa! Watch "Housewives" Star Do the Unthinkable LeBron apologizes to neighbors with cupcakes Justin Bieber In Calvin Klein Underwear Shoot Samsung Pre-Trolls The IPhone 6 With New Ad Jimmy Kimmel Introduces His Baby Girl