Thanks to drum-beating by parts of the business community, current conventional wisdom in Michigan is whatever winds up replacing the now- repealed Single Business Tax will involve a $500 million business tax cut.

Maybe so.  But maybe not, at least according to some 250 Michigan leaders who met last Monday in East Lansing and Marquette.  The town hall meeting --  sponsored by the moderate think-and-do tank, The Center for Michigan and Michigan State University's Institute for Public Policy and Social Research -- considered what should replace the SBT.

Surprisingly, after working over state budget and tax details, participants in 14 breakout groups overwhelmingly concluded Michigan is not in need of a tax cut.  Instead, eight groups concluded the state should raise taxes overall and increase the state's budget, on the theory that improved state services - education, infrastructure and public safety - would attract and retain good jobs and economic development.

Five groups concluded that any SBT replacement should be "revenue neutral", neither raising more or less money than the $1.9 billion the business tax now yields.  All 14 groups called for a cut in state spending on prisons, by amounts ranging from $100 million to $500 million.

Participants met in breakout groups during the morning, after a presentation by Citizens Research Council Research Director Tom Clay, who warned that Michigan currently faces a billion-dollar-plus structural deficit that is bound to get much worse over the next decade unless something significant is done.  Advocates for various SBT replacement plans outlined their proposed reforms in an afternoon session.

Tax cut advocates have been arguing, more or less a priori, that cutting business taxes will inevitably produce more jobs and economic development.  Critics counter that there is no evidence tax cuts by themselves lead to increased business activity and, even if they do, the kinds of jobs they would produce would be low-wage, low-skill, on a par with Mississippi's.

One problem with the tax reform debate so far is it has focused on tax cuts without considering first what kind of state we want our tax system to encourage; in short, it put the tax cut cart ahead of the what kind of Michigan do we want horse.  Participants in last week's town hall meeting were asked to pick what priorities they wanted for a healthy and prosperous Michigan future; top ranked by far were a thriving economy and a good education system.

In attempting to balance the state's budget, 10 of 14 breakout groups at the conference called for increasing spending on higher education.  Two simply busted the budget, proposing new General Fund spending of $10.5 billion and $13 billion.  The rest balanced the budget by a variety of other tax and revenue increases, including up to $2.7 billion coming from extending the current sales tax on goods to services such as haircuts and golf greens fees.

Most at the conference were surprised at the degree of unanimity in opposing what had looked like a tax cut bandwagon.  One participant, however, questioned breakout session results in an email to me.  "The breakout session I was in appeared to have all but two public employees. ... I would expect this group of this makeup to want more services and raise taxes.  What about the business community?" she asked.

The question's fair enough.  The Center for Michigan invited everybody on its 1,350-member mailing list, sought invitees from co-sponsor MSU, made special outreach to the business community through Crain's Detroit Business, invited leaders of Michigan's top public and privately held companies, and held open registration to any member of the public throughout the entire fall. We're also considering additional ways to take the breakout exercise "on the road" to civic groups throughout the state to continue to build informed public opinion on state spending and tax policies.

I certainly don't claim the results from this one town hall are a definitive measure of overall public opinion in Michigan.  That's one good reason why we should consider taking town hall gatherings like this to communities throughout the state, perhaps in collaboration with service clubs like Rotary or the League of Women Voters.

Regardless, I came away enormously impressed with the civic mindedness of 250 Michigan citizens who spent an entire day struggling with some of the problems that will be faced by our elected leaders.  Events like this will provide more informed - and useful - public input into some of the tough choices our leaders in Lansing face as soon as the election champagne wears off.

Phil Power is a longtime observer of politics, economics and education issues in Michigan. He would be pleased to hear from readers at ppower@hcnnet.com. Phil Power is president of the Center for Michigan. However, these opinions and others expressed in Phil Power's columns are individual opinions and do not in any way represent official policy positions of the Center for Michigan.