Survey on Budget Surplus Reveals Small Business Priorities
Lansing (February 18, 2014) –The National Federation of Independent Business (NFIB) released the results of a survey that asked its small business members what lawmakers should do with a projected budget surplus. The survey described the nature of the surplus and then asked small business owners to prioritize among six choices for using the extra money. A seventh option allowed the respondents to name their own ideas for using the surplus. A copy of the survey can be downloaded at the end of this article.
The six options listed in the survey and the results were: increase road funding (34%), lower the income tax rate (26%), increase the “rainy day fund” (12%), give taxpayers a one-time income tax rebate (11%), increase education funding (7%), increase the income tax Homestead Exemption (4%).
“The majority of small business owners chose increasing road funding over lowering the income tax rate and the other options currently on the table in Lansing,” said NFIB State Director Charlie Owens. “After years of difficult times, small business owners have shown that they are conservative and realistic in dealing with this extra budget money.”
Lansing lawmakers and the Governor are debating over the disposition of a projected budget surplus. The size of state government's three-year surplus has been estimated at $971 million, however, Budget Director Nixon and others have cautioned that much of that number is “one-time” money that will not be recurring in subsequent years. In his budget presentation Nixon said that the one-time money is two thirds of the surplus or $646 million leaving only $325 million that is stable enough to include in the baseline annual state budget in the form of increased spending, deposits to the “rainy day fund”, returns to taxpayers via tax cuts, one-time rebates or some combination of these options.
“Dealing with revenues and expenses is a life and death skill for anyone running a small business,” said Owens. “They understand the dangers of making long term commitments with volatile revenue streams and they see the value of infrastructure investment with this money.”
Owens said he was surprised that road funding received more support than an income tax rollback. “Keep in mind that for most small businesses the personal income tax rate is the business tax that they pay as non-corporate entities,” said Owens. “They are telling lawmakers that they would rather see the extra money go to roads than receive a small cut in their business taxes.” Owens pointed out that his members do not support road funding proposals that would hike fuel taxes or registration fees. “This may be one of the reasons for the support for roads with the budget surplus,” said Owens. “Small business owners would rather spend that extra money on roads and take some of the pressure off efforts to hike gas and diesel taxes and registration fees.”
Owens also said he was not surprised by the low support for education funding. “Our members have indicated that they feel strongly that schools have not been good stewards of the funding they have received and have little to show in terms of results versus money spent,” said Owens.