Showing posts with label Emergency Financial Advisory Panel. Show all posts
Showing posts with label Emergency Financial Advisory Panel. Show all posts

Tuesday, February 5, 2008

Governor’s financial panel members look to ’09 budget

By Susan J. Demas
For the Enquirer

Gov. Jennifer Granholm on Tuesday trumpeted an ambitious education and economic development agenda during her State of the State address, but vowed not to raise taxes this year.

The Democrat will fill in some of the fine print when she unveils her fiscal 2009 budget next week. The House Fiscal Agency forecasts the state is on track to be $275 million in the black.

But missing from her 53-minute address were many recommendations made by her own Emergency Financial Advisory Panel on solving the state’s short- and long-term budget problems.

In January 2007, Granholm appointed the bipartisan, 12-member panel chaired by former governors William Milliken, a Republican, and Jim Blanchard, a Democrat. The group (nicknamed the 12 Apostles) penned a 19-page report on Feb. 2 as the state was facing a $3 billion shortfall for fiscal 2007 and 2008.

"I honestly don't know how many people read our report," Blanchard said.

That sentiment was echoed by several members of the panel -- former state Senate Majority Leader Dan DeGrow, former state Rep. Don Gilmer and former U.S. Rep. Joe Schwarz.

"The report is applicable today as it was when it was written," said Schwarz, I-Battle Creek. "I would make a strong suggestion for all men and women in the Legislature to reread it. Some of them never read it in the first place. This should be their top priority. The bell rings as soon as the governor's State of the State and it's not going to be any easier in fiscal 2009."

The report’s general theme of solving the state's structural deficit with “cuts, reforms and revenues,” popped up frequently in speeches by Granholm and other Democrats. Last year, she and lawmakers struck an 11th hour deal to increase business and income taxes by more than $1 billion and allow competitive bidding for school employee health insurance, which Republicans have tried to get through for years.

Schwarz called last year’s cuts and reforms “nip and tuck.”

“The fact remains, you can clearly point out structural problems. The structural deficit is still there," Schwarz said. "Taxes and spending and the structure of state government still have significant problems."

"My advice would have been to solve it all at once so you don't have to do it again," said DeGrow, R-Port Huron. "(Former Gov.) John Engler always said, 'If you have to take a hit, take it early, so you get it over with and don't have to take the hit again.'”

Several of the report’s recommendations, like the Internet tax, were left on the cutting room floor. The report notes the growing service sector is not taxed, but the Legislature made little headway, passing and quickly repealing last fall a tax on a hodgepodge of services.

But in spite of last year’s messy budget wars, Blanchard says he “remains optimistic about Michigan’s future.

“It’s too great of a state to be kept down,” he said.

Making the cuts

On Tuesday, Granholm made scant mention of cuts and reforms, besides promising to slash red tape for businesses by making Michigan a regulatory “one-stop shop.”

Though Senate Majority Leader Mike Bishop, R-Rochester, said the governor had “borrowed a page from the Republican playbook” with her promise not to raise taxes, his caucus wants action to reduce spending and make government leaner.

"It's time to focus on reforms and making investments to lead Michigan into the future," agreed Gilmer, R-Augusta. "We're still providing more government than we have the resources to pay for it."

The Emergency Financial Advisory Panel made several recommendations, including cuts to the $2 billion Corrections budget. Michigan incarcerates more than 50,000 at a cost of $31,000 per prisoner. The nonpartisan, Lansing-based Citizens Research Council reports Michigan could save $500 million if its incarceration levels matched other Midwest states.

Gilmer urges a bicameral, bipartisan committee meetings taking 30 to 40 hours worth of testimony on sentence reform, rehabilitation and recidivism.
The report also said skyrocketing state employee and retiree benefit costs need reform and schools and local governments must consolidate services.

DeGrow said the state could restructure revenue sharing with local governments. The time might be right to let local taxpayers decide what priorities they want to fund instead of getting a blanket amount of state revenues, he said."In an era where state government is so strapped, do we fund something that's optional?" DeGrow said.Consolidation needs to happen on both the local and state levels, Schwarz said.

"There are 19 state departments and I'm not sure they're all necessary," he said. "There can be a consolidation of functions — I'll leave it at that."

Strategic investments

In her State of the State, Granholm did address some of the panel’s findings.

She pushed spending on infrastructure to create 28,000 jobs. She also proposed several education initiatives, such as incentivizing colleges and universities to turn research into businesses. Her Michigan First Health Care Plan providing access to the uninsured popped up, although the state has been in a holding pattern, waiting on a federal waiver for several years.

Panel members want the state to prioritize infrastructure and education, strategically investing in areas research shows will attract businesses and skilled workers.

"You still hear voices that we should cut taxes by $1 billion," Gilmer said. "That would completely destroy any opportunities to invest in our infrastructure, things for people to take notice of Michigan."The gas tax — which hasn't been raised since 1995 — should be on the table to fund road projects, Schwarz said.

Higher education has taken the hardest hit by the budget crisis, he said. Funding has been slashed by 11 percent from 2002 to 2007, the Presidents' Council, State Universities of Michigan reports. Tuition has soared, with most of the state’s 15 public universities last year passing double-digit tuition hikes.

"We've already damaged that a lot," DeGrow said. "Say what you will about Gov. Engler, but he valued higher education. We never cut higher ed."

If Schwarz could pass on one piece of advice to leaders during this year’s budget negotiations, it would be: "Have the courage to do what's right, not what's expedient."This isn't going to be easy to try to run a state of 10 million people with a rapidly changing economy with a government structured for the 1960s. Be bold and courageous."

Friday, October 5, 2007

Readers deserve better government reporting

Ladies and gentleman, your leaders have failed you, and we in the media have failed you.

This Richard Clarke-esque epiphany crystallized somewhere in a 3 a.m. haze at the Capitol on Monday against the backdrop of infantile threats and finger-waving on the floor of Michigan's greatest deliberative body.

Afterward, everyone was left to bemoan what had gone wrong in our great state to make us shut it down for five hours, costing us upward of $1 million, when we were already almost $2 billion in the hole.

Culprits were, quite correctly, fingered as term limits, hyper-partisanship and gerrymandering.

Our neophyte legislators clearly had no concept of what it took to piece together a $42 billion budget without the aid of accounting tricks, even though they had 10 months to learn.

Thanks to term limits, which remain wildly popular, there are no old bulls left in the chambers to help steer the state from disaster. Former House Appropriations Poobah Don Gilmer paced helplessly on the sidelines Sunday night as he watched tadpole reps flail about.

Few, if any, lawmakers bothered to consult the erudite Emergency Financial Advisory Panel headed by former Govs. Bill Milliken and Jim Blanchard.

Pols would rather play the game of poisonous partisanship than make policy, pushed by the two parties and lobbies entrenched on both sides.

It's a dysfunctional system bolstered by redistricting, which is controlled by the party in power at the time of the census. Amazingly enough, the GOP last time managed to sketch state and federal districts that secured majorities, just as the Dems had before.

But enough about them. Flog the media, too.

We are your last line of defense against politics run amok. When the people are informed, it's a lot harder for leaders to run roughshod over us.

Sadly, too many media outlets view politics as a horse race and lack basic understanding of policy, so we figure you don't have to get it, either.

As an ignorant former editor of mine put it, "I view politics like baseball. The exciting time to cover it is during elections, like the playoffs. Otherwise, it's pretty much the off-season and no one's paying attention."

Wrong. I know poodles with a more nuanced take on public affairs.

You deserve to read about the history of the budget crisis, dating back to the '90s, when legislators — many who did know better — capitulated to what was easy and politically expedient. They slashed taxes to unsustainable levels to win elections. They raided $4.2 billion from reserves so they wouldn't have to make real reforms.

You deserve to read how budget cuts and higher taxes affect your life — how much you pay, how much you gain. That means connecting the dots from the state budget to all those local millages you've been asked to OK, program cuts at your local elementary school and the business that didn't open in your neighborhood because a tax structure wasn't in place.

You deserve to read about bills when they're introduced, not after they're law — from HPV vaccinations to pop-up tax reforms — so you know what your lawmakers are up to in Lansing and can be involved in the process.

In the last month, Michigan's press has been a model on all counts. But as soon as this crisis evaporates, so will our policy coverage.

Because just as the Legislature doesn't look like it did in 1983, neither does the Capitol press corps. It's been downsized by at least half, often the first victim in newspaper and affiliate cutbacks. Most media only run copy from wire services, which have taken big hits, as well.

What kind of message do we send to you, the people, when we don't do justice to the most important issues of the day?

In part, that's what's led to the explosion of political blogs, but most just litter the hyper-partisan wasteland. Anonymous posters at Right Michigan and Michigan Liberal routinely run propaganda the mainstream media normally wouldn't (and shouldn't) touch, such as the unbiased (ahem) state GOP poll showing Democrats are doomed with a tax hike or the Senate Dems whining about not being allowed to snap pics for political gain of the tax-hike tally.

We at the Enquirer, a small but scrappy paper, try to do our part, and I think we succeed more than any other in our weight class. But all journalists need to do more.

Because the stakes are too high in Michigan right now for us to fall down on the job.

Cowards and courage: I took aim in Tuesday's column at Sen. Glenn Anderson, D-Westland, for stalling on a vote for immediate effect of the new services tax. But Anderson did vote for it, though not for the actual bill, a move which could cost the freshman his seat.

That's what lawmakers are paid to do. But it's worth contrasting that with Rep. David Agema, R-Grandville, who decided embarking on a Russian hunting excursion was far more important than voting on Michigan's fiscal future.

Anyone who thinks the sheep slayer deserves another term should volunteer as his target practice.

Saturday, July 28, 2007

If they only had a plan

After two weeks vacation, our Lansing leaders are no closer to discovering the Wonderful Wizard of Oz, who will magically solve the $1.6 billion budget deficit.

They've been stumbling down the yellow brick road since January, in fact, and still can't figure out which way to go.One path looks a lot like Dust Bowl-era Kansas — depressingly black and white, with the next twister right around the bend. Family farms are going belly-up, schools are ramshackle and downtowns are fast becoming ghost towns.

But at least the dang government is minding its own business.

The other path blooms in Technicolor — and if the gentle, wildflower-dotted hills don't quite look like Silicone Valley, it's at least Pennsylvania. After last week's partial government shutdown, the Keystone State promptly passed a budget boosting spending on schools, daycare and senior services.

Imagine that.

Of course, Michigan can just run out the clock until its Sept. 30 deadline. What's the worst that can happen? Record 7.2 percent unemployment? The continued exodus of business and bodies from our state?Stall on, Lansing. Budgets are hard work. And our leaders clearly don't like being on the surrealist journey together.Everyone's jockeying for first billing in this melodrama.

Gov. Jennifer Granholm plays Dorothy, the heavily rouged Democrat who thinks there's no place like home in Wayne County, where the McNamara machine would just take care of pesky tax questions for her.Senate Minority Leader Mark Schauer is Toto, Dorothy's loyal sidekick, cute enough to fit into a picnic basket. Occasionally, the Bedford Township Dem pokes his head out to nip at Senate Majority Leader Mike Bishop.

Bishop, R-Rochester, stars as the Tin Woodsman in need of a heart, who thinks nothing of slashing college funding and medical care for poor kids.

Is he trying to appease the Wicked Witch of Notaxistan lobby, whose Flying Monkey, former state Rep. Leon Drolet, hounds legislators with his gigantic, fiberglass pig? Or are dreams of the governor's mansion dancing in the boyish Bishop's head?

The Cowardly Lion is novice House Speaker Andy Dillon, D-Redford Township, who clearly needs a shot of courage after going into hiding during the last round of negotiations.

Lastly, there's easily overlooked House Minority Leader Craig DeRoche, aka Scarecrow, who still wistfully calls himself Speaker and can't add up the deficit right. The Novi Republican is just now cobbling together a task force to help him out.

Like it or not, this preening cast of characters is stuck with one another.And we're stuck with them.But if they need help, there's not just one Wizard to consult — there are a dozen from the bipartisan Emergency Financial Advisory Panel, chaired by former governors William Milliken and Jim Blanchard.

They put forth sensible ideas the overwhelming majority of Michiganders support — investing in schools, the arts and health care; modernizing the tax code; and reforming state employee benefits.Precious little of that has been done — save for the new Michigan Business Tax — even as an F-5 economic cyclone barrels through the state.

Now I lived in Iowa long enough, surviving three separate tornadoes, to know that if you choose to shut your eyes in the middle of a twister, it'll still heave your mangled body onto the nearest barn or farming implement.

Our problems aren't going away. The storm grows stronger each day.

But our leaders seem content to keep using the budget as political theater, knowing they can always take cover in their tax shelters.

Right now, too many in Lansing see the world in black and white. It's up to us to tell them we'd rather live in Technicolor.

Saturday, June 2, 2007

Time for Granholm to get it done

It's been a rough week of mortgaging Michigan's future.

To console themselves, patrician politicians are partying with the powerful up on Mackinac Island for the Detroit Regional Chamber of Commerce's annual shindig.

One thing is clear. In the grand, face-saving façade known as the 2007 budget deal, Democratic Gov. Jennifer Granholm whiffed.

She knew it was crammed full of one-time fixes and accounting tricks — the very shenanigans she fingered her predecessor, John Engler, for using in the '90s that got us into this mess.

She knew borrowing against future investments would cost the Mitten State millions.She knew they were just shunting the problem to next year.

What's worse, she could have spared higher education and economic development by inking a deal with the GOP months ago — before the deficit blew up to $800 million.

She knew better. Period.

Yes, legislative Republicans knew all this, too. But they've already shown more loyalty to rabid, out-of-state anti-tax groups than to their constituents or sensible fiscal policy.

And unlike neophyte Senate Majority Leader Mike Bishop, Granholm has been to the bargaining table before. After her landslide re-election last fall, she vowed she would lead.

We're waiting.

The governor was off to a good start in January, appointing the blue-ribbon, bipartisan Emergency Financial Panel to make hard-nosed recommendations for the state's long-term problems. Well, she gave the report a cursory look, kind of like President Bush did to that of the Iraq Study Group.It's tough to say whose approach has failed more spectacularly.

Displaying a vexing blend of bluster and timidity, Granholm talks loudly while carrying a small stick. After her 2-cent tax on services proposal went down in flames, she seemed content to let House Speaker Andy Dillon come up with a better idea.

And rather than battle for health care, public safety and schools, the governor figured she could live to fight another day. Maybe she can save them by squeezing a modest tax increase out of Bishop for 2008.Maybe not.

A brilliant orator, Granholm will continue to paint the other side as evil-doers bent on shuttering schools and tossing the sick on the street, because of Republicans' medically untreatable compulsion to cut taxes.

That's an easy fight to win. Michiganders are increasingly horrified by budget cuts, with 70 percent willing to swallow tax hikes even in a dismal economy.

But the most important question is: What do you stand for, governor?

You say you support middle-class Michiganders. Will you restructure the state tax code so the clerk at Meijer doesn't pay the same income tax rate as Dick DeVos?

You say a college education is essential. Will you actually increase funding to state universities?

You say you support business innovation. Will you promise not to lay a hand on any more of the 21st Century Jobs Fund money?

You say health-care coverage is critical for citizens and saves us all money. Will you finally get a universal access plan passed?

Take some time on paradise island to answer these questions and craft a new plan.

Then do us a favor. Stop blaming the GOP and get it done.

Wednesday, March 28, 2007

High school attitude ruling the State House

Washington may be Hollywood for ugly people, but it's the bickering beautiful people who reign today in Lansing.

The Capitol is at the mercy of the callow cool crowd from high school — the jocks, cheerleaders and Future Business Leaders of America who made sure their mugs were splattered on every yearbook page.

But they never really did anything.

That's not going to fly in Michigan right now.

We hold the embarrassing distinction as the only state with a negative credit rating from Standard & Poor's, because smug legislators slew the $1.9 billion Single Business Tax last year without bothering to replace it.

Right now, we're running out of time to plug a $900 million hole in this year's budget. And then it's off to tackling the $3 billion shortfall projected for next year.

What Michigan needs right now is leadership.

We didn't get it Thursday.

No, instead we're treated to the tiresome antics of Senate Majority Leader Mike Bishop and Gov. Jennifer Granholm, our very own homecoming king and queen sparring for the spotlight on the tacky gymnasium stage.

On Feb. 8, the immaculately-coiffed Democratic guv smiled at the crowd, trumpeting her budget plan complete with a $500 million business tax cut and a 2-percent tax on services.
Sniggering Republicans said they'd think about it, while House Minority Leader Craig DeRoche slapped a "Kick Me" sign on beleaguered Budget Director Bob Emerson's back.

Granholm, fresh off a landslide victory for her final term, still seems oddly paralyzed by Sally Field syndrome. She'd rather have people like her than make tough decisions in a truly comprehensive plan to save the state.

On Valentine's Day, the aqua-eyed Bishop dumped Granholm YouTube ninja style, announcing the GOP-led Appropriations Committee had rejected her executive order out of hand.

Mike felt betrayed by Jen, who would never return his calls. And he wanted his Duran Duran tape back.

The next week, Bishop proclaimed he'd solved the budget crisis sans tax hike in his super-secret plan, evidently ditching that day of history class on Richard Nixon's fictitious one to get U.S. troops out of Vietnam.

Bishop's main goal isn't to solve this fiscal train wreck. He'd rather tag Granholm with this mess and coast to the governor's mansion in 2010 John Engler-style.

Waiting in the wings is House Speaker Andy Dillon, the slick-haired student body president who's friends with everyone. He flirts with Jen in calculus but still cracks open a beer with football buddy Mike after practice.

Leaving the role of Granholm's cheerleader to Senate Minority Leader Mark Schauer, Dillon came out last week with ideas no one can argue with, such as cutting legislator benefits.

Courted mercilessly by both sides, the Democrat clearly is relishing his role as the decider. He's willing to cut more services than Granholm but raise taxes more than Bishop — as long as the final compromise won't jeopardize his control of the House next year.

By the end of last week, the homecoming king had stopped talking to the student body president, and both were miffed the homecoming queen had jetted off to Germany.

Thursday, Granholm issued her executive order with $344 million in cuts. Bishop had already determined she didn't go far enough and led the Senate effort to slash schools by $34 per student. They're no closer to a deal.

And so the political posturing goes.

The frustrating part is that it doesn't have to be this way.

Ambitious, astute and all under 50, the Capitol cool crowd isn't wonting for talent. As a reporter, I've found all three eager to talk policy; where they falter is in solutions.

With only 14 years combined state budget experience, the trio needs to book some serious time with the old bulls who have been through this before. Say, the tragically underused members of Granholm's own bipartisan Emergency Financial Advisory Panel.

They might not look as pretty on TV, but they know Michigan has to reform employee benefits, invest in higher education and restructure outmoded taxes to build a better budget and a stronger state.

One thing is clear: The longer our leaders wait, the worse things get.

Entrepreneurs are refusing to set up shop in a state lacking a clear business tax structure. Poor children don't know if they'll still have health care. Students wonder if their schools can afford to stay open. Prison guards don't know if they'll have jobs.

Granholm, Bishop and Dillon have to decide if they like playing politics or if they love this state.

It's one or the other.

Ten million Michiganders await their answer.