Example Op/Ed
http://www.freep.com/article/20110210/OPINION05/102100413/Opposing-points-view-Michigan-can-t-afford-earned-income-tax-credit-s-marginal-benefits
Opposing points of view: Michigan can't afford earned income tax credit's marginal benefits
by Roger Kahn
February 2011
Michigan is $1.8 billion in the red. That is deficit the state faces this very moment, and it might be more.
We have no pots of money left and no way to hide this problem. No rainy day fund. No federal stimulus dollars. We've spent them all. We have a lot of hard work and tough decisions staring at us. It is time to ask ourselves questions like: What services do the citizens of Michigan need? What can we afford? No longer can we ask: What services would we like?
Though it would be nice to keep first dollar health care coverage, as a physician I know it is time to ask: Can we afford this?
Funding "likes" rather than "needs" got us here, and it just won't work anymore.
I have introduced legislation to sunset Michigan's Earned Income Tax Credit. We cannot afford sacred cows. Why would I eliminate it? First, let's look at affordability. The EITC will cost $340 million this year and is estimated to cost $370 million in Fiscal Year 2012.
Let me put that in perspective. All in, the budgets of agriculture, the attorney general, civil rights, education, the Department of Labor and Economic Growth, the executive office, judiciary, auditor general, military affairs and the secretary of state would total only $357 million. These 10 budgets do not amount to the $370 million that the EITC will cost Michigan in the 2011-12 budget. And its costs grow every year.
So it is time to ask: Do we need the EITC? Can we afford $370 million for it? I believe continuance of this structurally unsound credit is simply no longer a sound choice. We don't need it, and it is certainly not worth the equivalent of the entire budgets of 10 state departments.
Worth is a concept we must include in our budgeting now. We should have done so always. It means that programs should be weighed one against the other for the value they bring to the people of Michigan. How does the EITC stack up? The U.S. Government Accountability Office has found that between a quarter and a third of EITC payments are improperly made. In fact, the EITC ranks second among all federal programs in fraudulent payments.
We are not making an argument that government should not lend a helping hand. In the Michigan Department of Community Health alone, we spend more than $12 billion. We are making the argument that our spending needs to be cost effective and that each and every program needs to show its comparative value.
The EITC is about encouraging work for the underemployed. This is originally a federal program, not a state program. The Michigan program is just a 20% echo of the federal program. Yet, for us, it is the equivalent of 10 state departments at a time we are facing a $1.8-billion deficit.
For me, it will come down to: Do we need it? Can we afford it? How does it compare to other needs? And in this case, does someone else do it?
Simply put, government must live within its means. Gone are the days that we can demand programs without looking at what we can afford.
Credit card debt got us here. It is time to cut them up and ask ourselves, each and every time we debate the solutions to our budget crisis: Do we need it? Can we afford it? What is it worth?
For the EITC, the answers are no, no and not enough.
Roger Kahn is a Republican state senator from Saginaw Township.