CALL TO ACTION ON GOVERNOR GRANHOLM’S BUDGET PROPOSAL

From President Glenn Mroz

Michigan Tech calls on you and its many thousands of supporters for help in securing higher education’s future in the State of Michigan.

This week, Michigan is at a crossroad in its efforts to bolster its economic vitality. Crucial decisions are pending, and investment in education is the centerpiece. You may have heard the adage that you can't cut your way to greatness or prosperity. The financial situation facing Michigan is a classic challenge for those in decision making roles as the state faces a $3 billion budget deficit. Although many have commented upon what should be done and have promised complete plans, only Governor Jennifer Granholm has offered a detailed plan.  

That plan would strengthen Michigan Tech and the entire education system in the state – and that is why we now ask you to act. Time is running short.

Governor Granholm inherited a substantial budget deficit upon entering office in 2003. Responding to Michigan's requirement to balance the budget, she undertook severe cost cutting measures that affected many areas, including higher education, K-12 education, and police and fire protection. Unfortunately, that single year problem was systemic. As the domestic auto market share has been continuing to decline, Michigan's heavy reliance upon that sector hit us harder than other states.  As a result, data show that thousands of jobs have been eliminated and profits deeply impacted. Combined with tax cuts during the more prosperous decade of the 1990s, state revenues have been reduced to record low levels. 

The impact upon Michigan Tech has been a reduction in our annual general fund appropriations by about $6 million since 2002. No matter how you slice it, the impact of such cuts statewide has been a shift in cost to our children—either through reduced quality of services to them, or through rising tuition to maintain quality so that they receive a good education. 

Now the state faces another $3 billion deficit. Tax cuts have eliminated $3 billion in state revenue over the past decade, and with the pending expiration of the Single Business Tax, general fund revenues will be reduced by almost $2 billion more.

Governor Granholm's plan recognizes that Michigan's future requires investing in the people who will create that future. With the adoption of her plan to increase revenues and make reductions wherever possible (her budget has some $400 million in cuts), she is committed to preserving and investing in the things that will benefit our children and make Michigan competitive again.  Specifically, the Governor has said she will not cut education, health care or the safety of our communities.  These are the basics. Without investment in these areas, Michigan will not be attractive to businesses. Too frequently in recent years, new businesses have gone elsewhere and existing ones have been tempted to relocate outside of the state.

Economic competitiveness requires a well-educated workforce, and the Governor's budget for the coming year would invest an additional 2.5% in colleges and universities.  

On the revenue side, she has proposed replacing the former Single Business Tax with a simpler, new Michigan Business Tax and would assess a two-penny tax on all business and consumer services, such as legal fees and club memberships, which currently are not taxed. Medical expenses would be exempt, but liquor and tobacco taxes would increase, tax loopholes on businesses would be closed, and individuals would receive a break on the purchase of a new automobile.

The situation is urgent. No alternative plan has been offered. Without legislative action on the Governor's plan, it will be necessary for her to begin the process of Executive Order cuts at the end of this week to deal with the deficit.  That would mean disinvestment in Michigan's future and a severe setback to making our state the best place to live, learn and earn.

Michigan’s economy continues to change from one dominated by manufacturing to one more represented in other states in services like engineering design, research, and legal and financial services.  We must meet this reality head-on.

If you agree that Michigan must invest in its people, and should have a tax code to match the economy of the 21st century, this is your chance to be heard.  Within the next two days, you should contact your state senator and representative and call for immediate action on the Governor's plan to resolve our economic crisis. For those outside of Michigan, you might consider contacting friends and relatives who live here.

For Michigan Tech the stakes are high. We have weathered the economic problems of   past years and are determined to continue providing our students with world-class teaching and research.  We must prepare them to create the future in this increasingly challenging and competitive world.

Links for State Representatives and Senators:

<http://house.michigan.gov/find_a_rep.asp>
<http://senate.michigan.gov/>

Sincerely,

Glenn Mroz
President
Michigan Technological University