Meet Michigan's new fiscal watchdog

Any long-term agenda for Michigan’s financial future has to include three big topics:

1. The chronic billion-dollar-plus structural deficit in the General Fund budget, something that exists regardless of the economy. This fact lies at the heart of every budget crisis we’ve faced for nearly a decade.

2. The need for sharing local government services. With 3,500 local governments in our state (including school districts), there are a ton of services to share, productivity to increase and dollars to save.

3. Spending on Michigan’s prison system, which at $2 billion per year now exceeds what we spend on our public colleges and universities. If we just put people in the slam at the average of our neighboring states, we’d save around $400 million each year.

These three crucial issues weren’t something the mainstream media traditionally paid much attention to. So — how did they get put on our radar screens? They have this much in common:

Each was initially brought to light through the work of one outfit: the Citizens Research Council of Michigan. It’s one of our state’s hidden gems, and an absolutely essential component of our now-shrunken public policy system.

Founded way back in 1916, CRC has established a long, long record of unbiased, nonpartisan, accurate research that has been at the heart of thoughtful, fact-based discussion of public issues. In fact, CRC’s reputation is so good that all you have to do to end an argument is say, “Well, it’s in the CRC report.”

In a week’s time, long-time CRC Director Earl Ryan will step down. His successor – only the sixth to hold the job! – will be Jeffrey Guilfoyle, currently the Director of the state Office of Revenue and Tax Analysis in the Michigan Department of Treasury.

Ryan has been at the helm of the CRC since 1994, when he arrived from the Indiana Fiscal Policy Institute. He was born in Michigan, though, and won degrees in political science from the University of Michigan and Wayne State University. During his long tenure – and with the help of now-retired Research Director Tom Clay, who probably knows more about Michigan finances than any living person – CRC has gained steadily in stature.

Earl Ryan is a very thoughtful guy. Here’s what he told me during a conversation last week:

“With the advent of legislative term limits, a new element has come about in state government: The enormous incentive to kick the can down the road and put off tough decisions until somebody new takes office. In a larger sense, Michigan has never been confronted by the kind of continual and very deep erosion of our economy that we’ve experienced over the past 10 years. But we keep deluding ourselves that things will soon get better and that we can put off for a while doing what we must do.”

Instead, “we simply have never come to grips with this problem.”

His successor seems well qualified. An economics major (Phi Beta Kappa, U of M) Guilfoyle earned his PhD in economics from MSU in 1998. Since then, he’s worked for Anderson Consulting and in all kinds of positions in the Michigan Department of Treasury.

Guilfoyle expresses the same urgency and frustration held by his predecessor: Waiting so long to deal with the state budget “limits terribly what we can do,” he said.

“We’re looking at some very ugly choices, since our revenues and our expenditures are at such a disconnect. We’ll have either to kill some very popular and important programs or raise taxes.”

Both the incoming and outgoing directors point to the disheartening lack of urgency in Lansing … and lack of understanding of just how serious our situation is elsewhere in the state. In part it’s the Chicken Little problem: Politicians repeatedly cry “The sky is falling!” But when the sky doesn’t fall – or state services don’t just disappear – people conclude it’s all a bunch of fakery.

That leads to Ryan’s First Law of Sewer Finance: Nothing ever happens until people’s toilets start backing up.

What Ryan says he is pleased about the board’s choice of a successor, he says he is very happy with Guilfoyle’s selection. And Guilfoyle says he’s very excited about taking over the Citizens Research Council. “The need for the kind of information we provide at CRC is terribly important now. Most people who provide research and information have a vested interest in the outcome. We try to be neutral and unbiased.”

They’ve succeeded admirably for nearly a century. In a political world where consistent high-quality and objectivity are sadly too often lacking, the Citizens Research Council is a magnificent asset to our state. I know I speak for many people in wishing Earl Ryan a happy retirement and Jeff Guilfoyle a fruitful time in office.

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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 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