Spring is in the air. The legislature is in recess. Taking advantage of school vacations, many families are traveling. The bulbs are just starting to flower. Easter arrives on Sunday. And here is a smattering of comment on a variety of matters, large and small.
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Stimulus Spending Watchdog Needed: California Gov. Arnold Schwarzenegger has appointed an inspector general to sniff out fraud and incompetence in the ways our largest state will be spending stimulus funds. California will get something like $50 billion in stimulus money from the feds. Accordingly, the “Ahrnaald” has asked Laura Chick, the retiring state controller, to take the position.
Governor Jennifer Granholm ought to follow suit. Michigan will be getting around $7 billion in stimulus funds from Washington, and the chances of ineptitude, if not outright skullduggery, are just as great here as on the Pacific Coast. After all, if our governor can create a council to advise on privacy issues and best practices to protect privacy, she certainly can appoint someone to look over the shoulders of folks who are handling and forking out all the dough coming from Uncle Sam.
Budget Crisis? Ho Hum. According to last week’s revenue estimating conference, Michigan’s tax revenues will come in around $1 billion less than originally forecast. That’s on top of a state general fund budget with another billion in built-in, or structural, deficit. So, how to balance the books? Republicans want an across-the-board 5 percent cut in state spending, which at least has the advantage of not requiring anybody to distinguish between more and less important things to cut.
Democrats admit spending needs to be cut, but are having trouble figuring out where. Various research groups – the Citizens Research Council, Detroit Chamber of Commerce, Detroit Renaissance and The Center for Michigan – have previously issued compilations of targeted cuts that total more than $1.5 billion. Topping the list is prisons. Michigan is one of five states that spends more on warehousing felons than on educating people in public colleges and universities. And the Department of Corrections budget, now $2 billion, has grown faster than any other area of state spending. A coalition of groups, including business, education, municipal government, not-for-profits and Realtors, has called for “hundreds of millions of dollars in reduced spending.” The governor has called for $120 million in cuts, which is a good step, but only a first one. Much more needs to be done.
But everybody’s left Lansing for a couple of weeks, presumably to think more deeply (ha!) about the impending crisis.
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We’re Not So Bad Off, After All: The Chicago Federal Reserve Bank has issued a report showing nearly all the Great Lakes states are in financial trouble, many of them worse off than Michigan. Illinois is facing a budget deficit ranging from $9 to $11 billion, with another $4.5 in unpaid bills, according to the state comptroller. Wisconsin is looking at a $5.9 billion deficit over a couple of years. Iowa looks better, but legislators there are hacking away at the $6.2 billion budget suggested by Democratic Gov. Chet Culver. And Indiana says it has a $1.5 billion surplus, but unemployment there is edging toward 10 percent. And Republican Gov. Mitch Daniels is proposing an 8 percent cut in the two-year, $28 billion budget.
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Two Bright Spots: Along with the spring flowers, we got two pieces of good news last week.
Robert Bobb, the Detroit Public Schools’ emergency financial manager, has bitten the bullet and actually proposed attacking the district’s estimated $300 million-plus deficit. He is suggesting thousands of layoffs; closing more than 50 schools. I knew him years ago when he was a very capable city manager at Kalamazoo. He’s a perfect example of the right man in the right place at the right time. And Michigan students are showing gains in math, according to recently released MEAP test results. Sadly, language and reading scores didn’t show much improvement. Much of the progress has to do with gradual phasing-in of the state’s tough new school curriculum that requires advanced algebra, among other things. Now if school district officials could actually find ways to get kids in class for the old required standard of 180 days …
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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.
