By Phil Power - July 12, 2006
As if Michigan didn't have enough problems.
Now we've got a bunch of out-of-state extremists trying to mess with the workings of our state and the structure of our economy.
They apparently have managed to collect enough signatures to get a proposal on the ballot that might damage forever our ability to compete, if the voters are fooled into believing their nonsense.
And it could not have come at a worse time. It is no secret that our economy is reeling. Much, though certainly not all, the damage is self-inflicted. That has included rank partisanship in Lansing so intense that militants on either side are quite prepared to see our state damaged just as long as the other side gets hurt.
Currently, we also are dealing with wholesale confusion about our business tax structure. That has led to literally billions of dollars of development projects being put on hold, because investors aren't certain what direction we are going and what the tax consequences may be. And now we have to deal with a new threat. This week, the Michigan Stop Overspending Committee submitted far more than the 371,757 voter signatures required to put any constitutional amendment on the ballot.
Theirs would restrict any state spending increases to the rate of inflation, while allowing for population growth.
Petitions were circulated by a paid signature-collection company and (maybe) some volunteers. At the standard rate of two bucks a signature, getting SOS ("Stop Over Spending," ... get it?) on the ballot has probably cost somebody north of a million bucks.
In this case, we know who the "somebodies" are. Three conservative groups, all located outside Michigan: Americans for Limited Government, from Glenview, Illinois, the Washington-based Americans for Tax Reform; and the National Taxpayers Union Foundation, headquartered in Arlington, Va.
Politically savvy readers may remember that Michigan's flawed campaign finance reporting laws will keep the exact details secret until the signatures are verified by the Secretary of State's office.
So what we have here is a stealth campaign to tell us how to manage our own affairs, financed by three rich out-of-state outfits. None of them could care less what happens to us poor yokels out here in the sticks, as long as we go along with their extreme ideology.
The details of the SOS plan are downright alarming, especially for a state struggling to get its own house in order. State spending for each year would be limited to the amount spent in the previous year, multiplied by inflation and with adjustments for any increase in population. (In Michigan these days, many of the neediest places are doing anything but growing.) Going over the spending cap would require the governor and legislature to declare a "budget emergency" and get approval from the voters.
State revenue covered by the spending limit would include taxes supporting K-12 schools set in place by Proposal A. Consider just three of the consequences if the SOS plan is adopted:
* Unless state spending for universities, police, local government and health care were cut sharply, spending for local schools would be capped at the inflation rate ... unless local voters approve every single expenditure above the limit.
* If spending continues to increase for prisons and Medicare (a sure bet), the SOS plan would require corresponding cuts in spending for local schools.
* If repealing the SBT results in spending cuts (considered likely by Lansing insiders), they'll be baked into the overall cap formula, causing even more damage.
If state spending were out of control, the proponents of this plan might have an argument, though they still would be proposing to use a meat ax where a scalpel is called for.
But state spending isn't out of control. Quite the opposite. Since 2001, state expenditures have been cut by nearly $4 billion, while tax receipts are now $5.8 billion below the upper limit imposed by the Headlee Amendment.
Moreover, new data from the Census Bureau's Survey of State and Local Government employment for 2005, provided by ace demographer Kurt Metzger, indicates that Michigan now ranks 46th in terms of state and local full-time employees per 10,000 population.
That means all but four states have proportionally more government workers than we do. Michigan has 7,400 fewer state employees today than in 2001. When it comes to state government alone, Metzger says Michigan comes in 40th out of the 50 states.
We're being sold a bill of goods, and there's a well-financed national agenda at work here, folks. The same outfit that ran the Michigan petition drive also did this year's proposal in Oklahoma. And the SOS proposal that will be on this fall's ballot is the direct descendant of something called the Taxpayers Bill of Rights (TABOR) that Colorado adopted in 1992.
All you need to know about that is that after experiencing financial chaos and sharply deteriorated public services, Colorado voters - led by a Republican governor - last fall suspended TABOR for five years. Except that the Michigan proposal would be even worse. Colorado's only applied to state government.
Ours would hit local government as well.
Roger Martin, who's helping organizing the Defend Michigan Coalition, which seems to include just about every organization you ever heard of, says: "Our opponents call the SOS proposal 'Stop Overspending." We call it 'Shaft Our State'."
He's right, of course. It's too bad that explanation can't be on the ballot. But what really matters is that our poor battered state, now struggling to cope with a changing economy, not saddle itself with a crippling new burden right when we can least afford it.
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.



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