By Phil Power - October 15, 2009
Let's assume the legislature and the governor finally agree on a “balanced” budget some time this month.
Odds are that will happen. Now let's assume further that they understand that merely passing a budget is not the same as putting together a solid, long-term plan to put Michigan's financial house in order and lay the foundation for our future prosperity.
And let's even assume they know how important that is– and that they are actually interested in developing that kind of plan.
If they do so, the window of opportunity is now wide open in a way it's seldom been before. Our three main political leaders – Governor Jennifer Granholm, House Speaker Andy Dillon and Senate Majority Leader Mike Bishop – are all term-limited out of office at the end of next year. So they don't have to worry about political backlash threatening their present jobs if they show real leadership.
But once we're into 2010, we’re in an election year and the political system will lose any appetite for serious change. It is essential that our leaders realize just how important this moment is when it comes to a chance for real reform in Michigan.
And so, here's a Roadmap to Prosperity which has arisen from the 7,500 people who have participated in 450 community conversations in the Michigan's Defining Moment campaign.
Milestone Number 1: Develop a shared vision for Michigan. Setting out a common ground vision for our future is essential. First of all, if you don’t know where you are going, you certainly aren't going to know how to get there. And if we don't have a shared vision, how can we possibly distinguish between what is important and what is merely trivial? In practical terms, without such a vision we have no way to establish rational taxing and spending priorities. Understanding that makes it clear that at the core of our two recent budget crises is a lack of common vision about where the state should be going and how best to get there. The budget battles two years ago and again this year were signal opportunities to reform a broken system. But instead of responding to this clear objective, the legislature and governor settled for piecemeal haggling to meet the "letter of the law," i.e., the constitutional requirement for a balanced budget.
The citizens are ahead of them. The thousands of people who have participated in the community conversations sponsored by the Center for Michigan are in remarkable agreement about their common ground vision for our state.
Those discussions indicated most people want a state with:
A talented, globally competitive work force.
A vibrant, diversified, growing economy.
A great quality of life.
Efficient, effective and accountable state government.
Milestone Number 2: Get our financial house in order. Every year for the past decade, Michigan has faced a billion-dollar plus chronic gap between revenues and expenses in the General Fund. This year, of course, it is much worse, thanks to the recession.
A "structural deficit" merely means that the money coming in is virtually certain to come up short, compared with our existing patterns of spending. If this annual deficit is left uncured, it will continue to balloon beyond our power to tame it.
So how do we fix that? Apart from a big increase in taxes — something that is highly unlikely — there is only one way to bring expenditures into line with revenues. That is to enact a series of far-reaching structural reforms in the organization and cost of our state and local governments and school systems. If we do that properly, we could realize billions in annual savings. For example:
If our prison system jailed people at the same rate of our neighboring states, we'd save $400 million each year.
Pooling health care benefits for all government workers, as Speaker Dillon has proposed, could save up to $900 million a year, if Dillon's estimates are accurate.
Consolidating functions and sharing services among units of local government and schools would save eventually result in significant yearly savings.
Without cost-cutting structural reforms like these, we are doomed to repeated, and worsening, budget crises for years to come.
Milestone Number 3: Lay a firm foundation for a growing, diversified, entrepreneurial economy. We need wholesale reform in our tax structure. The 22 percent surcharge slapped onto the Michigan Business Tax in 2007 is widely regarded as a disaster. Rethinking our tax structure should concentrate on simplicity, fairness, competitiveness with other states, and durability (we can't keep changing taxes every couple of years). And our tax structure should be aligned with our evolving economy. That suggests we repeal the surcharge, cut the rate of the sales tax and broaden the base to include services.
Michigan also needs a clear "plan to compete" that defines and exploits our durable, distinctive competitive assets.
Participants in community conversations identified these as including our great universities, our schools, the skills and talents of our work force and the quality of life available in Michigan, whether from our wonderful natural resources or our vibrant communities.
But we also need to mount a sustained investment program aimed at strengthening and exploiting our assets. Every experienced business manager knows while it’s possible to save a company by cutting costs, no company can thrive on cost cuts alone.
And at the same time, we need to recognize that if we do not enact structural reforms in costs of government, we will never find the funds for the sustained investment program we need.
Milestone Number 4: Reform the structure of dysfunctional Michigan politics. Michigan's ultra-strict term limits are widely regarded as the root cause for legislative fumbling and lack of leadership. They should be either repealed or changed and extended.
Voters also need to realize how our system of legislative district reapportionment works against electing leaders who can work together. The large majority of districts are gerrymandered to protect one party or the other. This means that the only election that counts in most places is the primary. But primary elections bring out the most extreme voters on either side, right-wingers in Republican contests and ultra-liberals in Democratic ones. In effect, our system is designed to assure election of the most ideologically extreme candidates from either side, and yet we expect them to collaborate once elected.
This Roadmap to Prosperity is clear. It's simple. And make no mistake about it: It will be very tough to accomplish, given our 10 million citizens and amazing number of special interests, each of which cares only about protecting its own. But it's a plan, which is more than our leaders seem to have in mind, as they haggle over budget-balancing deals that satisfy no one.
Where there is no vision, after all, the people perish.
***
Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a bipartisan centrist think-and-do tank which is sponsoring Michigan’s Defining Moment, a public engagement outreach campaign for citizens. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.
7 Comments
Creating a skilled and talented workforce requires that children come to school ready to read and ready to learn. Long-term investments in early literacy, child health and prevention, and the basics of food, clothing and shelter are the foundation of our economic recovery and your vision of a growing, diversified, entrepreneurial economy.
The time is now to change Michigan for the better. I cannot believe in these difficult times that politicians wouldn't put aside their political party agendas to do the right thing for Michigan. We have so many opportunities to capitalize on compared to many other states, such as our natural resources, tourism and education to name a few. Govenor Granholm, House Speaker Andy Dillon and Senate Majority Leader Mike Bishop please sit down and do what's right for our state.
It would have been intersting if Mr. Power would have discussed accountability in Milestone 4 as wa indicated in the lead to the article. Properly designed it could have a significant impact on all of the other Milestones.
It is disappointing that Mr. Power can so easily trash the term limits without any expalanation or descriptioin of how change would help. However, this approach is consistant with the politics of state government that contributed to us getting into the situation that triggered this article. The politicians/media speak what they like, repeat what is said by many other politicians and by the media but never take the time to understand why something was put in place or how/why it isn't working, or establish what the expectations are for an alternative.
I believe that accountability in legislation (laws and regualtions), of goevernment and the services its provides, and of the elected officals could be a foundation block in achieveing and sustaining the future Mr. Power talks about.
"But it's a plan, which is more than our leaders seem to have in mind, as they haggle over budget-balancing deals that satisfy no one."
Phil,
I wish folks would use the word 'representatives' instead of leaders. I don't elect 'leaders'. They are in fact representatives and need to be reminded of that every day, to have action in Lansing reflect the will of our residents. We should never feed the ego of those in elected office by referring to them as anything more than front line public servants. The Big Heads in Lansing are part of Michigan's problem.
For example: We have seatbelt laws that the vast majority of residents do not approve of. We have K-12 funding reductions that the vast majority do not approve of. We have prison spending that the vast majority do not approve of. And on and on.
Certainly, we all have misused in the past the statement 'we look to Lansing for leadership'. I do not. I look for them to do what they are told, including the first few of the recommendations of your article on Prison Spending, etc, which I think are fairly common ground for citizens.
Best Regards,
John
Phil I agree with your article pertaining to now is the time to act regarding the structural change needed. However, Granholm has been term limited for sometime now and has shown absolutely no appetite for doing the right thing. Also, I agree we should be prison incarceration rates in line with neighboring states, but you failed to mention state employee and MEA compensation and benefits. Do you not believe these should also be protected ? I know Granholm does.
Thanks
Bob
Phil…good column on what it takes for MI prosperity. It is great you keep helping our great state!! I think you identified some good reforms…the key is to develop enablers to allow their execution. Your premise is that elected leaders have no courage to lead when elected and that they will only make the tough calls and reforms when they know they are departing the office. THAT IS OUR CORE PROBLEM. You/we need to destroy that premise…else you/we are setting up for status quo and continued failure of Michigan. The solution is to somehow get the D's and R's to run people who are NOT like this….who will LEAD major reforms from Day #1 and not look back and NOT look at opinion polls. So I think to have much impact your new organization should focus on helping FIND such real leaders and then push to help them get elected. And THEN work on the reforms with them and the public and all other associations who will RESIST REFORM WITH ALL THEIR MIGHT!! The ideas for reform are for the most part well known and have been discussed for many years. The key is finding REAL leaders who are willing to run for the powerful offices and then actually reform our state. We need to get the people first. Else…this organization and many more will simply keep preaching to the choir with no real change implemented. And thus would be end up a waste of time and $$. Maybe your new organization can help recruit or at least identify those people. And then help get them elected. And then HELP them execute reform. Do you see that as part of your new group's role and potential impact? Sincerely, Alan Coloske, Milford, MI
Email: ARColoske@gmail.com
Dear Phil Power:
Your column appears in the DeWitt Bath Review where I read your recent editorial about Michigan's need for a financial plan. One element of your proposal is "Achieving general efficiencies and management savings in the Michigan prison system." I agree that this state spends far too much on prisons. I don't know what "efficiencies" you are contemplating and I don't know whether management is overpaid or over-represented in the overall scheme there. But I do know that many prisoners are serving long sentences for drug offenses. I also know that Michigan eliminated "good time" credits that would have made it possible for some prisoners to earn release before serving their minimum sentences. I believe that fewer prisoners who are parole-eligible are getting paroled now because of some repeat offenders who were out on parole when they re-offended.
My point is that the number of prisoners being housed in our prisons might be reduced and that should be the focus of our concern about prison expenses, in addition to finding efficiencies in the way they are managed.
I don't know whether you have publicly expressed an opinion on legalization of marijuana. I understand that decriminalization of marijuana is a federal matter. However, I believe that judges should have greater discretion in sentencing, that there should be good time credits, and that the public (and parole board) should accept that there will be repeat offenders and the answer to that is not to keep everyone in prison until they max out.
My inspiration for writing to you comes from a column in today's Lansing State Journal written by Kathleen Parker. I, as a 62-year-old woman who does not use drugs or alcohol, believe that it is wrong to put young people in prison for using marijuana. Apparently, this idea has traction, even among conservative women. Please read Ms. Parker's column:
http://www.themorningsun.com/articles/2009/10/21/opinion/srv0000006661136.prt
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