GUEST COLUMN: The Stimulus Crutch

Gov. Jennifer Granholm reacted to gloomy tax revenue forecasts this week by saying more of the $6.7 billion in federal stimulus money headed to Michigan may have to be used to balance the state budget.

Short-sighted use of one-time federal funds to plug budget gaps simply delays and intensifies the need for long-term structural reform of Michigan’s public sector, Center for Michigan Steering Committee Member and Detroit Renaissance President Doug Rothwell writes in this guest column…

BY DOUG ROTHWELL

These are trying times in Michigan: unemployment rising to 11.6 percent; major employers– including the auto industry–reeling from a worldwide recession; retirement accounts dwindling; and, families across the state worrying about their future.

It is a time that requires new ideas, new assessments of what governments do today and what they should can do tomorrow, and a new vision for a new future for Michigan.

And yet, while many across Michigan recognize the need for change, too many of our elected officials talk about the importance of a reform agenda, but focus more of their energy on how to spend short-term federal stimulus money.

For example, Governor Granholm deserves credit for proposing serious reforms in the Corrections budget. Yet, her 2010 budget assumes that federal stimulus monies will be used to plug part of a projected $1.5 billion budget deficit. Legislators talk about the reasons why they can’t enact reforms, like looking soft on crime, the tough task of obtaining concessions from public sector employees, or the difficulties involved projecting budgets two years at a time, but talk little about how they can enact reforms.

The simple truth is that the federal stimulus package is one-time money. It cannot and it will not solve Michigan government’s long-term structural deficit. It was designed to stimulate the national economy, not to solve Michigan’s budget woes or create a new vision for our future. It is for right now, while Michigan’s challenges and needs are long-term.

The over-emphasis on short-term thinking in Lansing is driven by a number of factors. Certainly, term limits have focused our Lansing officials on today at the expense of tomorrow. But this is just an excuse. It is always more comfortable for people in elected office to figure out how to spend money, rather than reduce the demand for the long term expenditures. This requires bold, strong leadership.

There are numerous proposals on the table to reduce long-term spending by Michigan state government. These include reforms of corrections policy, public employee retirement policy; public employee benefit packages, restructuring governance, and reforming tax policy.

Michigan can simply not afford to ignore our chronic structural problems and focus only on how to spend immediate cash. To do so does not begin to solve our problems; it only exacerbates them and passes them along to future generations.