Concerns surface about tax credit plan
Tweet
Granholm
A plan announced Thursday to restore the Michigan Promise Scholarship as a tax credit already is receiving criticism from Michigan lawmakers and MSU students.
In her annual budget proposal Gov. Jennifer Granholm suggested restoring the scholarship as a $4,000 income tax credit for college students who graduate and stay in the state working full or part-time for at least one year. The scholarship was slashed this past October to help lawmakers deal with Michigan’s $2.8 billion deficit.
Before it was eliminated, the scholarship provided about 96,000 college students in the state with up to $4,000 throughout their college careers.
State Sen. Alan Cropsey, R-DeWitt, said the state’s looming deficit does not allow for the restoration of the Michigan Promise Scholarship.
“Michigan is so far in the hole right now,” he said. “Everybody wants (the Michigan Promise Scholarship), but the question becomes how do you pay for it? Until (Granholm) shows us how the budget is going to be balanced and where the money comes from, this is irresponsible.”
Michigan faces a deficit between $1.2 billion and $1.7 billion in the next budget year, which begins Oct. 1.
The new plan would cost the state about $31 million next fiscal year, according to the Michigan Department of Treasury.
Cropsey said Republicans in the Republican-controlled Michigan Senate would not support the tax credit unless Granholm can identify a revenue source that wouldn’t cost taxpayers.
About 8,200 MSU students were slated to receive the scholarship this year. Some students said the proposed tax credit isn’t as appealing as the previous scholarship.
“It’s the same amount of money, but it isn’t the same amount of motivation,” education freshman Lizz Bartos said. “A scholarship helps you get through school, and some people may need the money just to get through.”
State Rep. Mark Meadows, D-East Lansing, said a benefit of the previous Michigan Promise Scholarship was that it helped students afford college throughout time.
“I’d rather find a way to actually fund the Michigan Promise as a scholarship and fund it with something that is dedicated in that direction,” he said.
Supply chain management senior Alan Mickiewicz said he understands Granholm’s intention of making the scholarship a tax credit.
“It is better to have the cash while in school,” he said. “But it will help as an incentive to keep graduates in Michigan.”
Some students said it might be a welcome change for upperclassmen but not younger college students.
“It sounds good to me because I’m close to graduating and having to pay back loans soon,” interdisciplinary studies in social science senior Erika Peterson said.
“For students just starting (college), it might be less motivation.”
Commentary
Add your $0.02, go to the comment form or follow the comment feed
KJ Green
(02/15/10 2:42pm)Report
When she first announced her proposal, I wondered from where the in-state jobs for graduates would magically appear and whether a student would be eligible for the proposed Michigan “Promise” tax credit if they stayed in Michigan but were unemployed?
Once again, the [lack of] wisdom of government is on display. 1) The state does not have the money to spend on this. Even when the economy recovers, MI will be repaying its obligations for some time to come. 2) Even if the state did have the money, the deferred nature of this program makes it literally useless to students who are currently in financial pain. 3) most students aren’t leaving the state because they want to live elsewhere — it’s because Michigan doesn’t have sufficient jobs to support the graduates its schools are producing.
Other than thinking about the superficial “feel good” about her proposal, did the Governor really evaluate its sanity?
Voltaire: “Common sense is not so common.”