"Incredible Shrinking Human Service Safety Net" Cited by State Civic Leader
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Sharon Parks, president and CEO of the Michigan League for Human Services.
It's an economic tsunami!
Sharon Parks, President of the Michigan League for Human Services, says the State of Michigan's capacity to care for its people is diminishing and new funding is needed.
The civic leader says the Legislature should consider a graduated income tax, replacing the current flat tax, to meet the crisis.
"Michigan is hemorrhaging. We continue to shed jobs, and state revenues are dropping by millions every day," said Ms. Parks.
"The governor's recent Executive Order will cut spending -- again --and likely result in further erosion of the capacity of state government to deliver the services the public needs and expects.
"Tens of thousands of Michigan's residents are out of work, out of savings, soon to run out of unemployment benefits, and faced with the question of how they are to provide for their family's basic needs."
Ms. Parks said question from a reporter about where unemployed workers, soon to exhaust UI benefits, can find help left her feeling very inadequate. What are the remedies? She responded:
"Food stamps? Yes. MIChild? Definitely. No Worker Left Behind? Certainly pursue it. Private charities? Yes. Cash assistance through the Family Independence Program? Probably not. The sad fact is that the cash assistance safety net for victims of this recession is significantly diminished, compared to prior recessions."
"Just as the safety net is rendered ineffective in meeting the needs that are materializing across Michigan, the state's revenue structure cannot --even in good economic times -- generate the revenue that Michigan needs to function as a vibrant state.
"A first step would be for Michigan to adopt a graduated income tax. The governor has said she would consider it; the Speaker of the House has said he would not rule it out; several newspapers have editorialized in favor of it and polling indicates that a majority of the public supports such a change.
"We are on the cusp of a 2007 budget debacle revisited, arguably on an even greater scale," said Ms. Parks. "Policymakers must understand the high stakes for our state's families, and for our state's future. Michigan must move beyond the current state of decline and structure our programs, our services, and our revenue base for a new, global economy. It's time to shift gears."
More devastating cuts to state programs ordered Wednesday are a symptom of a serious underlying problem with the state's revenue system.
Unless policymakers correct it by overhauling the tax system, Michigan will be forced to cut vital service after vital service because of a broken revenue structure. Respected economists agree that even in good times and with no expansion of programs, Michigan's revenue structure does not grow enough to keep pace with the demand for services.
"There was a lot of talk today about the reluctance to make these tough cuts, but this is our future unless we address the underlying problems. We can't keep cutting programs and services and expect to be a vibrant and competitive state," said Ms. Parks.
Michigan's safety net is already stretched thin with less than one-third of Michigan's children living in poverty receiving cash assistance to meet basic needs. The Executive Order cuts $120 million in general funds from the Department of Human Services budget, including some vital prevention programs and services for children. The Department of Community Health will lose nearly $58 million.
"This moves the state backwards in so many ways and forces services to be provided in the most costly setting. This is a major assault on the safety net," Parks said.
In addition, citizens seeking services from the state already report difficulty getting through to workers and delays in processing. State worker furloughs will only make this worse.
The Executive Order also makes cuts to Medicaid providers that will further limit access to needed medical care as more providers decide to stop seeing Medicaid patients. Public health programs will lose more than $1.5 million at a time when a new flu virus threatens public health. Adults on Medicaid will lose dental benefits and other medical services.
"There are reasonable reforms that will repair the state's broken revenue system. We must turn our attention to them,' said Karen Holcomb-Merrill, director of the League's state fiscal policy project.
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