Proposal 5 would require a 2/3 majority vote of the State House and the State Senate, or a statewide vote of the people at a November election, for the State of Michigan to impose new or additional taxes, expand the base of taxation or increase the rate of taxation. The measure would effectively lock in the state’s tax code in its current form, since no tax measure in Michigan history has ever garnered 2/3 support of the Legislature.
Proposal 5 is particularly troubling for maternal and child health because it could easily damage public health and health care funding in Michigan. The most direct example is the state’s Health Insurance Claims tax, the 1% tax on all claims used as matching funds for Medicaid — its value to the state is around $1.2 billion. The current claims tax expires on January 1, 2014. If Proposal 5 is approved, any action on the Medicaid Claims tax would require a super-majority vote – putting the $1.2 billion of Medicaid funds in serious jeopardy.
A broad-based coalition called Defend Michigan Democracy, representing almost every type of statewide advocacy organization and headed by Governor Rick Snyder, leads opposition efforts to the proposal. The major talking points opposed to the proposal:
– Proposal 5 changes the state constitution and creates minority rule in the Legislature by giving the powers to control tax policy to a small minority of just 13 senators.