Not What A Rainy Day Fund Is For

Michigan Democrats are indeed profligate spenders.

The state's budget and spending has increased by 50% just under Governor Whitmer's term to date alone.

But that's still not enough spending for Michigan's Democrats.

Instead they want to increase it, and to do so have to tap into the state's emergency fund to do so.

The Detroit News: Michigan Senate dips into rainy day fund for $88B budget plan.

Everyday budgeting is not what a rainy day fund is for, but the Democrats see a pool of money and want to spend it now rather than wait for an actual revenue shortfall where the funds would be needed. 

That means under this budget state government spending is around $8,800 for  each and every resident of Michigan. If asked I don't believe most residents of Michigan would say they're getting their money's worth under this plan - especially those actually paying the taxes to cover it.

The 19 Democrats in the Senate voted for this increase, and 18 Republicans were opposed, so yet again the headline is a tad misleading.  It wasn't the Senate, but the Democrats in the Senate pushing this through.

The House has not approved this yet, so there's still hope that some responsible budgeting may yet prevail.

Whitmer and The Dems Give You A Tax Increase For Christmas, And A Mioney Giveaway Too

That sucking sound you just heard is $700 million in taxes being pulled out of your wallets for more Democrat government spending.

The Detroit Free Press: Michigan's income tax rate can rise in 2024, judge says

A Court of Claims judge this week dismissed a lawsuit from Republican state lawmakers and business advocacy groups asking that the default income tax rate in Michigan remain at 4.05% instead of 4.25%.

Barring a successful appeal, that likely clears the way for the state's income tax rate to return to 4.25% for the 2024 tax year, a change expected to bring about $700 million more into Michigan's general revenue fund.

That was Judge Elizabeth Gleicher, who tends to rule for the Dems,  and here she nullified one of the words in the statute, making the tax decrease for one year only rather than it properly being the baseline under the law subject to being raised by further legislation.

But not to worry, that revenue will be used to bribe you to buy electric cars and to benefit Democrat-supporting unions in this state:

Yahoo News: Michiganders could save up to $2,500 on a new car under Whitmer rebate proposal

Whitmer's latest proposal for a state tax rebate lowers cost based on the type of vehicle purchased:

• $2,500 for a new battery electric or hybrid vehicle made in a unionized facility

• $2,000 for a new battery electric or hybrid vehicle made in a non-unionized facility

• $1,500 for a new internal combustion vehicle made in a unionized facility

• $1,000 for a new internal combustion vehicle made in a non-unionized facility

So a nice boost to push people to buy union-made cars, and electric ones as well, and a rebate to new car buyers at the expense of, and paid for, by everyone else in this state that likely would have preferred top keep their money in their pocket rather than for these Democrat-agenda-driven rebates.

A $700 million tax increase is quite the Grinch move there.

Michigan Democrat Crony Capitalism

In another part of the effort to spend down the budget to prevent the income tax cut (if she can),  our Governor is giving money away as fast as she can.

One might have used to believe (if you were the gullible sort) the Democrats when they said they were against big business. 

 Au contraire, they like big corporations just fine - especially when they toe the government's line, and even more so when the company in question has a nice symbiotic relationship with a Democrat-supporting union. The spending in this case is for an electric vehicle battery plant site, because, of course it is.

The Detroit News: Whitmer signs $1.3B spending plan, directing $630M toward private Ford development

"Today, I’m proud to sign a supplemental package that will create 2,500 good-paying jobs in Marshall, improve infrastructure, grow our healthcare workforce, and so much more!" Whitmer said on social media.

So for the 2,500 "good-paying jobs" she boasts about, the state of Michigan is giving, in this one extra appropriate alone, a $650 Million subsidy, which  equals $252,000 per job.

The total of $1.6 Billion in local and state subsidies for this project means each and every one of those "good-paying jobs" jobs is subsidized to the tune of $640,000.00 in tax dollars for each and every job.

You know, we could save the state some money by just giving $500,000 each to 2,500 people in Marshall and tell them to have a good time. Heck, let's instead  give $1 million of taxpayer money  to 1,250 random people in Marshall and announce how Michigan has gained over a thousand new millionaires this year - that'll make the news and make everyone think the Michigan economy is just rockin'.

Good-paying jobs indeed - if you mean the government paying a corporation for them, with your tax dollars.

Imagine what your own business could do with a subsidy of $640,000 for every job you have - or even just the latest appropriated amount of $252,000 - especially after weathering the storm of Whitmer shutting this state down and forcing small businesses to close.

The State Of Michigan Spending Spree

In an effort to drain the surplus to prevent the automatic state income tax cut, and to spend money faster than a drunken sailor ( and a drunken sailor is spending the sailor's money not other people's) the Michigan Democrats and Whitmer have unveiled a massive spending plan.

The Detroit News:  Gov. Whitmer $79B budget plan seeks record school funding, tax relief

Except of course its not universal tax relief, but targeted to her base, with a sop of a $180 check to tax filers but not all taxpayers. 

How much spending are we talking about? The spending would leave all of $250 million remaining out of the current $9 billion surplus.

Talk about a spree. One might even say it's a ridiculously irresponsible lack of stewardship of this state's coffers, especially as inflation continues and they chatter about an upcoming recession, and recessions tend to hit Michigan hard.

Funnily enough, her previous urgency to "fix the damn roads" seems rather completely forgotten in her current quest to spend the 9 Billion surplus.  

Nothing is announced with fanfare as to extra spending on road fixes from this spree.

Instead, she's hitting all the favored Democrat areas - increasing school funding as well as making a $700 million deposit to the teacher's retirement fund, increasing the earned income tax credit and preventing public pensions from being subject to income tax (but not 401K and most if not all private pensions) - picking winners and losers indeed.

We will note the increased school funding is to fix some of the education and learning lost due to Governor Whitmer's policies of closing the schools during the pandemic: 

The budget would include another $300 million for a tutoring program designed to help students who fell behind in school during the pandemic.

Gov Whitmer et a.,l  do indeed admit exactly why they're spending all this money and tryign to make the surplus evaporate - including those $180 checks:

The proposal includes the establishment of a new "Michigan Taxpayer Rebate Fund" to receive $800 million in Corporate Income Tax revenue for the purpose of providing $180 rebate payments to income tax filers. Married couples would get $180 combined.

The rebates would prevent an expected cut in the 4.25% personal income tax by dropping state revenues below a threshold that would trigger an automatic rate cut.

So, no tax relief for everyone, only for some, and for one time not moving forward. 

Not nearly the opportunity for graft and paying off constituencies for their support if you give everyone tax relief rather than focus on rewarding your contributors and voting blocs.

Perhaps Ingrates Are Not The Best Choices To Show Who Benefits From This Profligate Loan Payoff Giveaway

So as an election year gambit, President Biden has announced he's going to spend between $300-600 billion to forgive $10-$20 thousand of many students current federal student loans. 

This of course rewards his progressive university educated base who lack financial literacy and likely never took a personal finance class with a cool extra ten (to possibly twenty) thousand dollars in their pockets, paid for by everyone else.

Apparently, it's unfortunate that I worked and paid off my loans timely.  Had I waited, I could have gotten $10,000 forgiven - now I and all other taxpayers get to pay for those who chose or otherwise did not do so.

Of course, this is naught but an election year trick and does not fix the problem of the cost of higher education. 

It does nothing to reduce the actual cost of college, which will likely go up by around ten thousand dollars given this incentive.  Nor does it ensure future students student loans are reduced, and it may encourage people to take out even more loans hoping for further political forgiveness stunts.

But even spending $300-$600 billion is not enough for some.

The Detroit News: Who gets student loan forgiveness? Relief prompts joy, angst

Lots of stories of those both happy to get the 10k, but many ingrates claiming its not enough to pay off their debts, debts they freely entered into in return for an education that no one forced them to undertake.

Amazingly, in one case we have a lawyer -- who clearly looks like she never missed a meal in her life -- claiming the $10,000 forgiveness is not enough for people of color like her:

Dallas attorney Adwoa Asante borrowed $147,000 in federal loans to attend Emory University School of Law. She graduated in 2015 and has since paid back about $15,000. With interest, she still owes $162,000 — a debt that she says has limited her career options.

That means she's only paid around $2,200 per year -- less than $200 a month toward her debt.  Of course the debt is not going to go down much when you only pay off 10% of it in seven years.

Did anyone force Ms. Asante to go to law school?  

Anyone force her to take out student loans to go there?   

I highly doubt it.  Ms. Asante you're a lawyer, presumably you understand how a contract works.  You entered into one to borrow money, which you promised to repay, in return for an education.  You got the education so why should someone else pay for it on your behalf?

And, to top Ms. Asante, we have an illegal immigrant featured in the story,  complaining the forgiveness program won't work for her because she's an illegal and lacks a social security number - otherwise if she had a social security number she'd get the 10-20k forgiven at American taxpayer expense.

Giglio, 20, is in the country without legal permission and doesn’t qualify for federal loans because she doesn’t have a Social Security number. She won’t receive any benefit from Biden’s debt cancellation plan.

Giglio, who expects to borrow a total of $150,000 in private loans by the end of her four years studying graphic design at Suffolk University, is already paying nearly $400 a month to pay off the 12% interest on the money she borrowed to finance her first two years of school.

“It’s frustrating. It’s 10 times harder for me to go to school, to earn money," she said. "There’s no help for us.”

She's paying an estimate $150,000 to get a degree in graphic design? Who the heck thinks that's a good deal? And she can't even legally work here?  What exactly was she thinking doing that? Who the heck even gave an illegal a loan to go to university?

You know she had one heckuva an option to save money beyond choosing a cheaper school here - she could go to any other country in the world and get a cheaper education. She darn well could have gone back to Chile or Italy to do so. But for some reason she did not.  

Yep my sympathy for the ingrates complimenting in the article is someone between zero and SFA.

So a quick couple questions:

 1. If you didn't go to college, possibly because you couldn't afford it, or wanted to do something else, or didn't want to take on debt, are you happy that you'll be paying a lawyer's (and the other people in the article's)  student loans for a political stunt?

2. If you paid off your loans for your education and spent years saving and faithfully paying them off, not using the money for more fun things, making do with less and delaying gratification, how do you feel about others getting 10,000 to 20,000 in forgiveness (or about $2,000+ of the taxes you're personally going to pay this year) to try to buy votes for the midterms?

An Impressive Government Benefit If You Were Unemployed For All Of One Week, For The Rest Of Us, Not So Much

The American Rescue and Bloated Spending Plan has a nice benefit inside it if
you were unemployed for all of one week at any time in 2021 -

American Rescue Plan delivers $0 Silver premiums to unemployed

Yep a 100% premium subsidy for the entire year and added 94% cost-sharing reductions that make it equivalent to a platinum plan, for free. All you had to do to qualify is to have been on unemployment for one week in 2021.    One week and you get a subsidy for a year that is easily worth over $12,000.00.

For those of us who didn't file for unemployment in 2021?  We get Nada, zip, zilch. 

We're just be paying for the cost of this generous subsidy for those who did.

Tax And Spend, And Spend Even More

Over at Bayou Renaissance Man, Peter posts about the record revenues government is taking in.

As the economy improves under Trump, more taxes follow even at lower rates as economic activity picks up.

The increase in taxes collected, however, still can't keep up with the increase in spending and past spending at the federal, state and local levels for which the debt is coming due.

For example, in Michigan for the past twenty years roads have been underfunded and ignored, and the bills are coming due.

In Michigan in 2015 there was an increase of 20% more for vehicle registrations and 7.3 cents per gallon more in state gas taxes under the promise that it would be to fund road repair.

In reality, not so much.

Even with that tax increase, currently only 19% of roads in the Metro area are considered to be in good condition.

Why? Well part of the money was immediately diverted from road funding for other projects, and a goodly sum of it has been going not to repair roads but to pay down the over a billion dollars in debt for road repair done by bond sales in the Engler and Granholm eras, more than eight years ago, for which the repairs that were done back then are now in need of repairs themselves.

The solution being proffered to fix the situation? Of course, it's to increase taxes for road funding even more. They promise to use it all to fix the roads this time, and of course you can believe them this time.