Crain's Detroit Business: Matthew Roling on price of dealing with COVID-19 fallout
Matthew Rolling, executive director of the Office of Business Innovation at Wayne State University and interim chair for the Department of Accounting at the Mike Ilitch School of Business, wrote an op-ed about the price of dealing with the COVID-19 fallout. “The FY2020 state budget had originally projected over $10 billion in income and consumption tax revenue. If we generously assume a 15 percent to 20 percent drop in wages and spending, it is easy to imagine a $2 billion hole in our budget. The only realistic option for us to get out of this mess is by raising taxes. The good news is that on a relative, historical basis Michigan's tax burden is fairly low. The passage of the Headlee amendment in 1978 placed a cap on tax revenue collections relative to gross income, and our current tax vs. income ratio provides more than enough cushion for us to raise taxes to cover these costs. The bad news is that we all remember the gridlock and brinksmanship that plagued last year's budget negotiations. (Negotiations which were also focused on paying for something we all could agree on — "Fix the damn roads!"). Now, more than ever, we need our leaders in Lansing to work together in order to address the economic hangover we are facing from COVID-19.”
