By Phil Power - February 11, 2009
Oakland County Executive L. Brooks Patterson gave his annual "State of the County" speech Feb. 3 — at exactly the same time Governor Jennifer Granholm gave her State of the State address. Other than some snarky comments about the simultaneous scheduling, Patterson's talk received far less notice than Granholm's.
That’s only fair; Oakland County has 1.2 million people; the whole state, around 10 million.
But for those who paid attention to both, the tone couldn't have been more different. The governor talked about how Michigan’s economy has gone from "bad to worse," hinted at the projected huge state budget deficit for the coming fiscal year and expressed optimism about energy and "alternative energy jobs."
She also said Lt. Gov. John Cherry will head a "comprehensive effort to dramatically change the size and shape of state government," a task that may not be done till after she leaves office.
To be sure, Patterson also talked about "the perfect storm" battering Michigan, but defiantly pledged that "Oakland County intends to do more than just ride out the storm" and plans to lead "this state out of these dark and desperate days into the sunlight of new growth, opportunity and prosperity."
He pointed out that Oakland's books are balanced for 2009 and 2010, the result of being the only county in Michigan that operates on a two-year rolling budget. By contrast, the state and most municipalities budget on a year-to-year basis, which leaves them with "certainly no room to implement long range strategy."
But the contrasts with the state go much farther. Oakland County has a AAA bond rating on Wall Street, which keeps borrowing costs low. It’s the first county in the nation to fully fund retiree health care. Oakland took the lead in converting employees to a defined contribution pension system, instead of the old, very expensive defined benefit program. And county employees pay raises have been trimmed in the face of the ongoing crisis.
By contrast, consider neighboring Macomb County (struggling with a $20 million budget deficit) and Wayne County (forced to cut spending by 20 percent.)
Patterson attributes all this financial sanity and success to his economic team, led by Deputy County Executive Bob Daddow, plainly a whiz-bang finance and budget expert.
"Anybody can manage in good times," said Patterson. "It's the tough times that will test us."
On top of all that, Patterson talked about his political ambitions. A while ago, he let fly a trial balloon about running for governor. After all, he has been elected and re-elected five times in Oakland County, one of the most impressive electoral records around. In his speech, Patterson couldn't resist a dig at the State of Michigan, with a Democratic governor and Speaker of the House. "The levels of unemployment, the anti-business tax policy, the chronic deficits – none of that would be tolerated in Oakland County and it should not be tolerated at the state level either."
In a posting in Dome Magazine, Deputy Executive Daddow took a much sharper line. He pointed out that the state said in October 2008 that the budget was balanced, but only 60 days later discovered a 2009 revenue shortfall of $917 million. "I have asked numerous chief executives in the private sector just what would happen if their financial folks reported all is well in October and came up with unfavorable numbers such as these just 60 days later – without hesitation they indicated that they would be terminated."
Patterson may – or may not – decide to run for governor. If he decides to run, he may – or may not – be nominated. Or elected.
This is not a column endorsing or condemning L. Brooks Patterson. But it should be noted that on his watch, Oakland County has established an enviable record of prudent financial management and long range planning. For a state in as much persistent financial trouble as we are, that's something to think about.
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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 centrist think-and-do tank which publishes the Michigan Scorecard. 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.
6 Comments
Come on Phil, you are not really comparing apples to apples with budgets here. If you do the research you would understand that Oakland County is the fourth wealthiest county in the United States. So of course it was not hard for Patterson to keep his rich Oakland County budget balanced.
That’s like comparing a childless person who earns an annual income well above triple digit figures with being able to spend and stay within their means while then comparing them to a another person, with lots of children, who is earning minimum wage while being able to spend and stay within their means. That is totally not a fair analogy!
And while staying within budget at any income level is smart and good, not everyone can do so if the incoming monies cannot possibly take care of all their needs. That is what all those other counties you wrote about are trying to do, as well as the unfortunate reality our own Governor Granholm has to contend with here in Michigan.
Let's get real!
From: http://www.oakgov.com/exec/about/patterson.html
"Mr. Patterson presides over a $769 million dollar annual budget for FY2008 and a county workforce of nearly 4,000 full and part time benefit eligible employees."
In FY2008, the State of Michigan budget was set at $43 million.
Hummm, does anyone still wonder why the State of Michigan had a big budget crisis last year?
Before people blog, they should get their facts right.
The State of Michigan's budget in 2008 was $43 Billion (with a "B", not million).
You are wrong about translating Oakland County's "wealth" into meaning that the County can spend that "wealth". The "wealth" that you refer to is per capita income – the County does not have an income tax, so that does not translate directly into tax revenue. The largest part of Oakland County's discretionary General Fund budget come from property tax, and in fact, guess what – property values are falling. So, yes, Oakland County has been cutting its budget – check your facts and you'll see that the County started its budget cutting back in 2002 and has been doing so each and every year since then. The difference is that the County does multi-year budgeting, plans ahead, and started cutting earlier than everyone else. You just don't notice it because since the county started earlier, it hasn't disrupted citizen services as has happened in other communities, simply because those other communities ignored reality and waited until it was too late.
You are right that I should have double checked my facts because I got the info, incorrectly, from a bad source (a webpage on http://www.mitaxtruth.com). You can bet I will do that from now on, so I apologize for that huge error.
As for being wrong on my assessment that Oakland County's wealthy citizens help to bring in more tax revenues, again I stand by that claim. Even though the property values are falling there just like every other county, the richest people also have most expensive houses! So then that means that county enjoys a higher taxation income as well. Does not really take a rocket scientist to understand that equation now does it?
If you believe what that this writer had to say back on 8/22/08, you will hear that even wealthy Oakland County is not going to continue to be “sitting pretty” with all their budgeting magic:
“Oakland County had more than 14,000 home foreclosure and foreclosure filings (homes on which banks have begun, but not completed, the foreclosure process). Deputy Oakland County Executive Bob Daddow said in January that declines in home values are expected to cost Oakland County government $5.7 million in 2008, $6.8 million in 2009 and $13.3 million in 2010 – a gap that will need to be made up either by shrinking services or higher taxes.”
From: http://michiganmessenger.com/2772/michigans-battleground-zero
Donna, you are wrong and you will see. Have you looked at the county millage rates in the area? Oakland County has the third lowest operating millage rate of all counties in the state, so it already compensated for the higher home values.
And, while the housing values were high (emphasize on "were"), overall taxable values decreased in Oakland County last year in 2008 and will decrease again in 2009.
The problem with Brooks is he tells it like it is. Thus, he has no chance of being elected governor in this State since the residents prefer to re-elect the same bozos who have created this mess, twiddled their thumbs for the last 5 years and are unwilling to make the tough and unpopular decisions needed to fix it.
The best thing that could happen to Michigan would be Brooks as governor – unfortunately I've lost hope that will ever happen.
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