By John Bebow - January 21, 2010
Governor Jennifer Granholm's last, and most challenging, state of the state and budget addresses are both coming in the next month.
And, like a surfer in sunny southern California, she has an opportunity to ride a swell of momentum for big changes in the way Michigan does the public's business. Two quick examples…
1. Growing Sentiment on Tax Changes: A large town-hall meeting of statewide citizens sponsored by the WK Kellogg Foundation showed growing public support for the same kinds of tax policies promoted by Business Leaders for Michigan, namely lower business taxes and more reliance on other taxes, like sales taxes, that more closely align with today's economy.
2. Elements of the "Senate Republican Reform Package" owned by neither the "Senate" nor "Republicans." You might disregard the notion of longshot constitutional amendments and the cost savings estimates that lack any kind of documentation or footnoting. Otherwise, some of the Senate GOP's ideas are neither partisan nor particularly original. Examples…
Public Employee Benefits Reform: The governor's bipartisan emergency financial advisors called attention to this issue three years ago. So did the bipartisan business, labor, and government experts on the recent Legislative Commission on Government Efficiency. Legislators from both parties and in both chambers are working on benchmarking public employee pay and benefits. The Granholm administration has negotiated premium share increases on state employees once, and has opportunity to do it again this year.
Local Police & Fire Reforms: There is a long list of groups seeking reform to outdated laws impeding local government collaboration and consolidation of police, fire, and other services. (Get a quick briefing of the issue here). Republicans and Democrats in the House have drafted legislation on this issue. Economists and local government experts serving on a panel at the governor's request raised the same issue five years ago. The Michigan Municipal League and mayors from the Grand Rapids region, and even Kwame Kilpatrick have all been in the choir on this one for years.
What was sadly missing from the Senate Republican reform package was any mention of Corrections reforms (to both sentencing and operations) proposed by nearly every major business trade group in the state, most major media outlets in the state, the Legislative Commission on Government Efficiency, the governor's emergency financial panel, and many others. Refusing to tackle these issues is an outdated political calculation that is, indeed, owned by the Senate Republican caucus.
Still, if the warlords in Lansing can take off the "R"- and "D"-colored glasses in the next few weeks, their vision will become vastly improved and they might be able to see that both sides win if they can finally pass fundamental reforms.
The next move is Granholm's.



3 Comments
Gary Olson of the Senate Fiscal Agency noted a little discussed fact about state taxes during the recent Revenue Estimating Conference. In 2000 state taxes took up 9.49 percent of the state's personal income. Now it's 6.9 percent — a 25 percent decrease in Michigan's tax burden this decade.
Question: Why doesn't anybody know this?
Question: If cutting taxes is the best way to spur economic growth, why do we have the highest unemployment in the nation?
Michigan is a non-competitive state for business taxes. After the tax changes of the Grand Bargain will Michigan remain non-competitive? Business tax cuts just will not do it! Some business taxes must be eliminated to be competitive with Ohio, NAFTA, and the global economy.
A result of this is that tax abatements and Renaissance Zones would no longer be needed to attract business. Picking winners and losers would no longer be needed. Every business would have an equal chance to be a winner. Government can get out of the activity of economic planning, which it does not do well. No longer use business taxes to balance the state budget. It is just possible that the Michigan Recession would end.
For the last 70 maybe 80 years politics were dominated by Detroit and Auto Labor. The UAW is shadow of its former self (look at what happened in Washington lately) one-party Detroit politics finally deystroyed itself via the Mayor.
The new Detroit City Council elected by wards instead of unconstitutional "at large" is the first step in new political day in Michigan.
The Democratic Party was dominated by these two factions and I look for big changes where "out-state" (moderate to conservative) Republicans and Democrats will start down a long road to recovery
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