Michigan's "Customer" Service Fail Is a Cautionary Tale about Cutting Taxes and Disinvestment


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Flint WaterThe Michigan legislature just approved a  $28 million appropriation to provide immediate aid in response to the water crisis in Flint, Mich., where vulnerable children and families have been poisoned by toxic lead.

This avoidable crisis partly has roots in the misguided movement to cut taxes so much that state and local governments have difficulty raising enough resources to adequately fund critical public services.

The linkage between Flint and tax policy is not as clear cut as, say, Kansas where communities slashed school funding among other things shortly after lawmakers passed top-heavy tax cuts that decimated state revenues. But there is a connection. If you didn't know before the city's toxic water made national headlines, you may now know that Flint, a once prosperous community with a strong middle-class, was economically devastated throughout the 80s and 90s due to loss of auto industry and manufacturing jobs. Flint native Michael Moore exquisitely captured the city's plight in the 1989 documentary Roger and Me. Lack of jobs led to a substantial loss of population, an increase in poverty, and an eroding tax base. These structural problems festered for years. It’s hard to imagine how any lawmaker could view cutting spending as a viable solution.  

Yet, here we are.

Enter Gov. Rick Snyder, the former Gateway chief who prides himself on running Michigan like he ran a business, and who in 2011 took control of Flint via a city manager after deciding that the state could do a better job of whipping economically struggling communities into financial shape.

The problem is that running a business and governing are not parallel endeavors. So, no, Gov. Snyder, your constituents are not customers. But if for argument's sake we assume they are, then know that Michigan’s customer service spectacularly failed. In the business world, don’t heads usually roll for such poor leadership and decision-making? A CEO is beholden to the bottom line and shareholders, but elected officials, in theory, are bound by public service and the greater good. Under Snyder’s leadership, the Flint city manager made a business decision to switch the city to a filthy water system to save $5 million (and later those in charge balked at spending an outrageously small $100 a day that could have avoided elevated lead levels by stopping the corrosion of pipes due to contaminated water). These savings are trivial compared to the incalculable human cost of endangering the health and well-being of 100,000 state residents.

The Flint water debacle has raised valid questions about race, class, political ideology and their role in government decision making and outcomes. We’ll leave some of the broader social questions for the political and pundit class to debate. But this we can say for certain: tax policy played a role in this crisis. Investments in higher education, local communities, public health, and other human services in Flint and throughout Michigan have and will continue to be squeezed by an array of costly business tax credits and transfers of general funds for transportation infrastructure.

Rather than cutting taxes for businesses, reducing the income tax, and gutting credits for working families, the state should be reforming its tax system to ensure it has the funds needed to provide critical public goods both now and in the future. Failure to do so will lead to more catastrophes that will be costly, both for the state and to the health and well-being of its citizens. The devastating events in Flint so starkly remind us that "savings" gleaned at the risk of public health and safety comes at too high a price.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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