MICHIGAN
To prompt opposition to Gov. Jennifer Granholm's proposed 2 percent tax on services, a duo of Michigan business groups launched a campaign to attack her initiative.
The Michigan Chamber of Commerce and the Michigan Association of Realtors, or MAR, launched the 30-second commercials, which have aired across the Lansing area since last week.
The theme of the campaign is "Give Governor Granholm Your 2 cents."
People don't understand how great of an effect this excise tax would have on them, said Brad Ward, director of public policy and legal affairs for MAR.
"We would like the state government's restructuring policy to save the citizens money, rather than balance its problems on their back," Ward said, adding that the companies have discussed broadening the base of the ads.
The proposed service tax is part of Granholm's plan to eliminate the state's combined $3 billion budget deficit.
According to the Michigan Department of Treasury, the proposed tax would generate almost $1.5 billion in revenue by taxing about 132 services many associated with transportation, business and finance.
Implementation of the tax would cost a middle-class family of four about $69 a year, according to Terry Stanton, director for the Michigan Department of Treasury.
If the service tax were adopted, Michigan would have a tax system that's not in step with the rest of the country, according to a study by the Michigan Chamber of Commerce and Anderson Economic Group.
"Many of the negative features of the governor's plan could be remedied if the 'excise tax' on business-to-business service purchases and the asset tax were eliminated from her plan," the study said.
But Granholm's proposed taxes and budget cuts would allow Michigan to continue investing in education, health care and other import programs for the future, Stanton said.
"This proposal was put forth by the governor ... because it combines government restructuring and some pretty significant budget cuts that would provide the state with the revenue that it needs to invest in itself," he said.
Granholm has encouraged other ideas for solving the budget crisis, but no one has put anything on the table, said Liz Boyd, Granholm's spokeswoman.