LANSING ? Michigan Senate Democrats announced the renewal of their Michigan 2020 plan that would allow all graduating high school seniors to, if they wish, attend a public community college or university with their tuition paid for by expiring tax credits.
“As Michigan high school students around the state take the ACT today to help them get into college, we want to make sure that once they’re accepted they can afford to go to college,” Senate Minority Leader Gretchen Whitmer (D-East Lansing) said.
The package includes SB 223 , SB 224 , SB 225 and SJR M .
The maximum amount of the grant would be equal to the median tuition level of all Michigan public universities, which is currently $10,671, Whitmer said. To implement the plan would cost about $1.8 billion and could come from a 10 percent reduction in the state’s current $35 billion in tax credits and loopholes on the books right now, she said.
“It’s a relatively simple idea and it’s not been altered significantly since it was introduced last session,” Whitmer said. “One thing that has changed and why it’s different this time around is we’re seeing widespread interest and support in the proposal.”
The idea behind the Michigan 2020 plan is similar to the Kalamazoo Promise, which Whitmer said has “changed the whole system” when it comes to education and the level of success by students, as well as brought in new employers to the area. An anonymous benefactor there funds the college tuition of Kalamazoo schools graduates.
“Many of these tax credits and loopholes were put on the books years ago and have never been reviewed,” Whitmer said. “While we’re setting the goal of eliminating 10 percent of the most ineffective and outdated tax expenditures, finding nearly 5 percent would be enough to fund the Michigan 2020 plan.”
Rep. Sean McCann (D-Kalamazoo) was also present at the news conference to lend his support to the plan, especially being someone who has witnessed the benefits of the Kalamazoo Promise first-hand.
“We cannot deny the importance of a college degree, especially in this economic climate. It is well known, and recently proven by a study by The Pew Charitable Trust, that college graduates have a lower unemployment rate than those with only a high school diploma,” he said in a statement. “…I am intimately aware of the positive impact the Kalamazoo Promise has had on Kalamazoo public school students, and I know the Michigan 2020 Plan will have a similar impact on students throughout Michigan.”
Lou Glazer with Michigan Future and the Business Leaders of Michigan were both big supporters of the bills last time, but Whitmer said she has also seen an increased level of interest from her colleagues on the other side of the aisle.
“I’ve had a number of colleagues from the Republican side of the aisle come and talk to me not publicly, and I’m not going to name them, but with questions about ‘maybe could this be changed to ensure we keep graduates in Michigan? Is there a possibility that if they leave they would repay it? Could it be an upfront loan?” Whitmer said. “So they’ve got a lot of ideas that they’re throwing which tells me that there are many people on both sides of the aisle that share this goal.”
SB 223 would create the Michigan Higher Education Grant Act and sponsored by Sen. Rebekah Warren (D-Ann Arbor).
“I think many of us know that higher education could be the gateway to a brighter future,” she said. “It could also saddle so many of our citizens with staggering amounts of debt.”
Warren said the University Research Corridor, a collaboration among several state universities, generated $15.5 billion in economic activity in 2011 alone, translating into 74,000 direct and indirect Michigan jobs and $375 million in increased state tax revenue for 2011.
SJR M would place a four-year sunset on new tax credits offered by the legislature.
“We need to make sure as term-limited legislators, do not bind the hands of future lawmakers by spending all of the state’s revenues on tax credits as he or she heads out of the door,” said Sen. Vincent Gregory (D-Southfield). “A four-year reauthorization on any new tax credit will force the legislature to re-evaluate the effectiveness of the credit over the course of its life and allow it to expire until only necessary or effective.”
Sen. Morris Hood III (D-Detroit) is the sponsor of SB 225, which would call for both the House and Senate Fiscal agencies to develop and implement a letter-rating system to evaluate each bill that amends or creates a new tax expenditure beginning October 1, 2013.
“This grading should be based on the effectiveness of the credit in terms of costs per job created,” he said. “We hear about investing our money and investing our money smart. We hear the governor talking about investing our money and getting a return on investment, so this is where we start that process of making sure that the return on our investment is there.”
And Sen. Hoon-Yung Hopgood (D-Taylor) is the sponsor of SB 224, which would set up a legislative tax expenditure review commission consisting of five members, each an economist associated with University of Michigan, Michigan State University, Michigan Technological University, Wayne State University, and the last associated with the Upjohn Institute or a successor entity. All would be appointed by majority and minority leaders in both the House and Senate.
“It’s simple. Programs that are inefficient, wasteful and not bringing a return on investment will be eliminated in order to divert funds to the Michigan 2020 Higher Education grants,” Hopgood said. “In doing so, we are able to ensure that taxes won’t be increased a single cent on Michigan’s hardworking residents to implement this critically important plan.”
Whitmer said she would be happy if the package could be passed sometime in this session. If it were passed this year, it could be set up so that the freshman class next year could be a beneficiary.
“Michigan students have been (burdened by) this college tax, which is a shift from the General Fund coming out of higher education and relying on tuition and we want to reverse that to ensure that our people are competitive and ready to succeed and have the type of quality of life that we know and have loved in the past but aren’t having right now because we’re priced out of the market,” Whitmer said.
But House Republicans are already attacking the plan, especially Rep. Jeff Farrington (R-Utica), Tax Policy Committee chair.
“Democrats have come up with another plan to spend tax dollars that they don’t have yet,” he said in a statement. “‘Free college’ sounds great, but then so does ‘free puppy.’ Of course, there is no such thing in the real world. The Democrats are hiding their plan to end many tax exemptions, including the ones on food and medicine.”
And last week, Rep. Joe Haveman (R-Holland), the Appropriations Committee chair, joined Farrington in opposition to the bills a day after the package was read in and referred to the Senate Appropriations Committee.
“We’ve seen this before – reckless spending leads to massive debt burdens hanging over our children and last-minute, panicked tax hikes,” Haveman said in a statement. “This sort of unrealistic, unfinished policy is what put Michigan into a one-state depression for the past decade and what is currently threatening our recovery nationwide.”
2020 SCHOLARSHIP: Senate Democrats also announced the return of their $10,000 scholarship competition to promote the Michigan 2020, known as the #mi2020 Scholarship Competition.
To enter, students are asked to submit a short web video at www.michigan2020.com/competition that explains why Michigan needs to enact the Michigan 2020 plan to offer free college tuition to all students.
“We are excited to once again offer one high school senior the opportunity to take advantage of what the Michigan 2020 Plan would mean to all Michigan high school graduates once it is passed,” Whitmer said in a statement. “The entries we received last year were a testament to the outstanding creativity of Michigan’s students and I’m looking forward to seeing them again share their vision for why the Michigan 2020 plan is the right plan for Michigan and their futures here.”
Last year’s winner is from the Upper Peninsula and is currently attending the University of Michigan.
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