Program: Health and safety fund grants

 

Appropriation:

All From Special Revenue Funds:

$23,500,000

 

Total:

$23,500,000[5]

Program Description:

This appropriation funds the health and safety fund grants.  The health and safety fund is administered under Public Act 264 of 1987, and is funded by a 4 percent of total tobacco tax revenues.  The fund is used partly as a mechanism for giving money to hospitals that participate in the Medicaid program, but $16 million is given to Wayne County to pay its outstanding debt obligations.  The state, under this program, is effectively taxing all cigarette smokers, with secondary effects on retail businesses such as party stores, in order to fund Wayne County’s debt.

Recommended Action:

This program should be downsized.  While a portion of this fund is used for hospitals that participate in the Medicaid program, reducing taxes and encouraging individuals to contribute to organizations that assist the indigent would better serve society.  Since these charitable organizations compete with one another for donations, it is in their interest to ensure that they get the most services for their donated money.  There is little justification for taxing people in 82 counties to pay Wayne County’s debt.  Savings: $16,000,000.

Program: Convention facility development distribution

 

Appropriation:

All From Special Revenue Funds:

$48,000,000

 

Total:

$48,000,000[6]

Program Description:

This appropriation funds convention facility development distribution.  In 1986 the state of Michigan established the convention facility development fund to assist in financing the expansion of Cobo Hall. Part of the revenue to fund the bonds was to come from a hotel tax levied in Wayne, Oakland, and Macomb counties. This was not sufficient at the time to pay principal and interest and coverage for the bonds. This revenue was supplemented with a statewide liquor tax.  The facility fund was sold to legislators on the grounds that the expansion of Cobo Hall would lead to an increase in the number of hotels in Detroit and eventually the hotel tax revenues would be sufficient to pay for the bonds.

Recommended Action:

The state should repeal this tax.  With the introduction of casinos in Detroit, there are now sufficient revenues from the hotel tax to pay for bonds. This allows for the repeal of the 4 percent liquor tax, which is now being collected and then returned to the counties, saving taxpayers approximately $29 million annually.  Repealing the tax would not save the state money per se, but would reduce the gross appropriation for Treasury by nearly $30 million. Appropriation Reduction: $29,000,000.

Program: Commercial mobile radio service payments

 

Appropriation:

All From Special Revenue Funds:

$24,000,000

 

Total:

$24,000,000[7]

Program Description:

This appropriation funds commercial mobile radio service payments for E-911 services.  In 1999 the Legislature passed a series of Acts that create a wireless E-911 service.  The service allows government authorities to track emergency calls from cellular phones.  If people in need of assistance call the mobile radio service, but do not know where they are, the service can locate them based on their signal.

Recommended Action:

Eliminate as a state function.  The desires of citizens from different counties for 911 services will surely be different.  There is little reason for cell phone users in Taylor to pay taxes to fund a wireless E-911 service in Traverse City or vice versa.  Emergency services are a local function.  Savings: $24,000,000.