In response to the RGA’s television advertisement highlighting her record of supporting failed former Democrat governor Jennifer Granholm – whose tax increases led to 15 percent unemployment and 500,000 lost jobs – Michigan Democrat gubernatorial candidate Gretchen Whitmer’s campaign promptly decided to throw Granholm under the bus, with her spokesperson claiming that “Gretchen took on Governor Granholm repeatedly in Lansing.” Unfortunately for Whitmer, that’s just not true.
When Whitmer was in the state legislature, not only did she vote in favor of Granholm’s a $1.35 billion tax hike package – which included an 11.5 percent income tax increase and a massive sales tax increase – but she repeatedly praised the Democrat governor, calling her a “strong advocate” who “had successes” and is “capable and ready to solve the problems of the state.” To make matters worse, Whitmer has gone out of her way to praise Granholm on the campaign trail, claiming she “worked her tail off and had all the right values” and even bragged about having personally “ran all the budgets” for Granholm.
Now that she’s her party’s nominee for Michigan’s highest office, Gretchen Whitmer knows just how toxic Jennifer Granholm’s name is to voters and how damaging her relationship to the failed governor could be to her chances of victory. But no matter how hard Whitmer tries to distort the facts, Michigan voters know she’s just like Granholm and would take Michigan back to the same failed tax-and-spend policies that led to the state’s lost decade.
Whitmer: Granholm is “capable and ready to solve the problems of the state.” “Granholm, in contrast, has sought consensus. She launched a statewide tour to explain the state’s budget problems before presenting her own spending plan, which she said incorporated the priorities she heard on the tour… She recruited a Cabinet that is diverse and centrist. Granholm said every department director who came from a private-sector job took a pay cut. Her plan to balance this year’s budget won legislative approval on the same day it was presented. Two weeks later, she took the unusual step of personally presenting her 2003-04 budget to the Legislature. ‘It sends a real strong message that she’s capable and ready to solve the problems of the state,’ said state Rep. Gretchen Whitmer, D-East Lansing.” (Source: Andrew Chris, “Granholm Garners Praise,”Lansing State Journal, April 6, 2003)
Whitmer: Granholm’s “had Successes.”“Whitmer said Granholm made education a priority and directed budget cuts without sacrificing the state’s quality of life. ‘She proposed a responsible restructuring of the state’s business tax, which the Legislature just walked away from,’ Whitmer said. ‘She’s had successes. The struggle has been with a Legislature that doesn’t want her to succeed.’” (Source: Chris Christoff, “Economy Weighs On Granholm,” Detroit Free Press, Oct. 1, 2006)
Whitmer on Granholm and her tobacco tax increase: “She’s very persuasive and is a very strong advocate for the things she believes in and this is a centerpiece of the budget. “The tobacco tax increase originally was part of the governor’s budget plan for the fiscal year that begins Oct. 1, but Granholm proposed moving up the effective date to July 1 to provide $97.1 million for the current fiscal year, which has a $250 million shortfall… ‘She’s very persuasive and is a very strong advocate for the things she believes in and this is a centerpiece of the budget,’ Whitmer said about Granholm.” (Source: Amy F. Bailey, “House set to reconsider increasing cigarette tax,” The Associated Press, May 26, 2004)
On October 1, 2007, State Senator Gretchen Whitmer voted for a $1.35 billion tax hike package, one of the largest in the history of Michigan, that raised the state income tax 11.5 percent and expanded the 6 percent sales tax to 23 new services. On Oct. 1, 2007, State Sen. Whitmer voted for H.B. 5198, a bill to impose a 6 percent tax on a wide variety of services, including various personal services and a number of services used primarily by businesses. (Passed 19-19) (Source: H.B. 5198, Michigan Legislature, Oct. 1, 2007)
The Detroit News, Oct. 2, 2007: “Michiganians went to bed Sunday night with the state nearing its first government shutdown and awoke to a $1.35 billion tax hike, among the largest in state history… An 11.5 percent income tax increase and expansion of the 6 percent sales tax to a strange brew of services will close most of the $1.75 billion hole in the state budget year that began Monday.” (Source: Charlie Cain and Mark Hornbeck, “Michigan Wakes Up To Higher Taxes,” The Detroit News, Oct. 2, 2007)
The Associated Press, Sept. 30, 2007: “The Democrat-led House on Sunday passed a bill that would raise the state’s income tax from the current 2.9 percent to 4.35 percent, sending the measure to the Republican-led Senate, where it faced a much tougher fight.” (Source: “House Passes Income Tax Hike,” The Associated Press, Oct. 1, 2007)
The income tax vote was the first increase to the income tax since 1983. “The last time lawmakers raised the income tax, to 6.35 percent in 1983, two Democratic senators from Macomb County, north of Detroit, were recalled for their yes votes…The rate was decreased over the years, and most recently ,was 3.9 percent before lawmakers raised it to 4.35 percent.” (Source: “Lawmakers defend choices,” Grand Rapids Press, Oct. 13, 2007)
The combination of a higher income tax and sales taxes on more services was projected to cost a family of four earning $50,000 a year about $207. “The combination of a higher income tax and sales taxes on more services will cost a family of four earning $50,000 a year about $207: $157 in income tax and about $50 in sales tax, treasury officials estimate.” (Source: David Eggert,” Opinions differ on how Michigan’s higher tax burden stacks up,” The Associated Press, Oct. 2, 2007)
The expansion of the sales tax was a proposal “stiffly opposed by the business community.”“No House Republicans voted for the bill placing the 6 percent sales tax on services a proposal stiffly opposed by the business community. All Democrats did, except for Reps. Marc Corriveau of Northville and Kate Ebli of Monroe, who voted no… The sales tax would not apply to tickets to sporting and entertainment events or accounting services. But businesses and consumers would pay the tax on ski tickets, administrative and investment services, consultants, warehousing and storage, interior design, commercial landscaping and janitorial services, among other services.” (Source: Tim Martin and David Eggert, “Taxes Rise, Michigan Government Shutdown Ends,” The Associated Press, Oct. 1, 2007)
The sales tax was expanded to ski tickets, administrative and investment services, consultants, warehousing and storage, interior design, commercial landscaping and Janitorial services, among other services:
The Associated Press, Oct. 1, 2007: “The Legislature agreed to raise Michigan’s income tax rate from 3.9 percent to 4.35 percent and expand the 6 percent sales tax to some services. Granholm signed both measures. Structural changes to state government including the management of teacher and other public employee benefits also are part of the package.” (Source: Tim Martin and David Eggert, “Taxes Rise, Michigan Government Shutdown Ends,” The Associated Press, Oct. 1, 2007)
The Associated Press, Oct. 1, 2007: “The sales tax would not apply to tickets to sporting and entertainment events or accounting services. But businesses and consumers would pay the tax on ski tickets, administrative and investment services, consultants, warehousing and storage, interior design, commercial landscaping and janitorial services, among other services.” (Source: Tim Martin and David Eggert, “Taxes Rise, Michigan Government Shutdown Ends,” The Associated Press, Oct. 1, 2007)
Lansing State Journal, Oct. 2, 2007: The sales tax increased taxes on carpet and upholstery cleaning services, business service center services, including copying and mail box rental, management consulting services, investigation, guard and armored car services, fee-based investment advice services, janitorial services, landscaping services, office administration services, astrology services, baby-shoe bronzing services, bail bonding services, balloon-o-gram services, coin-operated blood pressure testing machine services, bondsperson services, check room services, coin-operated personal service machine services, comfort station operation services, concierge services, consumer buying services, credit card notification services, dating services, discount buying services, social escort services, fortune-telling services, genealogical investigation services, house-sitting services, social introduction services, coin-operated rental locker services, numerology services, palm-reading services, party-planning services, pay telephone services, personal fitness trainer services, personal shopping services, coin-operated photographic machine services, phrenology services, porter services, psychic services, restroom operation services, shoeshine services, singing telegram services, wedding chapel services, but not churches, wedding planning services, travel and reservation services, except travel agencies and tour operators, scenic and sightseeing transportation services, skiing services, tour operator services, warehousing and storage services, packaging and labeling services, specialized design services, transit and ground passenger transport services, such as taxis and limousines, courier and messenger services, personal care services, excluding hair care but including makeup and nail care, hair removal, massage, nonmedical diet and weight, tanning and tattoo services, service contract services in which the seller, in exchange for the buyer’s single payment, agrees to provide repair, maintenance or replacement of one or more items of tangible personal property during a specific period of time, which services the buyer is not required to buy in connection with the purchase of tangible personal property; security system services, document preparation services, mini warehouse services and self-storage unit services. (Source: Jeremy W. Steele, “Want a horoscope or tan? Pay the tax,”Lansing State Journal, Oct. 2, 2007)
A small business owner said she would have to pass the cost of the tax increase along to all her clients. “Sherry Pyszczynski, a 40-year-old business owner from Hazel Park, had a different take on the budget solution, particularly the service tax… ‘I’m really shocked. It upsets me terribly,’ she said. ‘I own a janitorial service and now I have to pass that cost along to all my clients. I don’t know how the people in Lansing consider that a luxury.’” (Source: Charlie Cain and Mark Hornbeck, “Michigan Wakes Up To Higher Taxes,”The Detroit News, Oct. 2, 2007)
According to the Tax Foundation, the combination of the sales and income tax hike moved Michigan’s tax burden from 14th highest in the nation to 11th highest in the nation. “Another measure of tax burden is state and local taxes as a percentage of personal income, with the national average at about 11 percent. [State Treasurer Robert] Kleine [D-Mich.] said the new tax boosts mean Michigan edges up from slightly below 11 percent to slightly above 11 percent… But the Tax Foundation in Washington, D.C., which tracks such data, takes a different view of Michigan’s ranking. The combination of the sales and income tax hike now puts Michigan’s tax burden at 11th-highest in the nation, up from No. 14, the Institute says.” (Source: Charlie Cain and Mark Hornbeck, “Michigan Wakes Up To Higher Taxes,” The Detroit News, Oct. 2, 2007)
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