Collaboration Demanded, Lest State Be Damned

February 12, 2007
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In usual times it is as much the fight as the outcome that so captures the attention of Michigan residents who fully anticipate the money wars of 2007, the ultimate question being who will have any of the existing state revenues. Last week the governor outlined her agenda for 2007 spending and new tax plans, all greeted with the usual responses from legislators on either side of the political aisle and organizations representing various interests.

These, however, are unusual times calling for unusual partnerships and collaborations to continue Michigan’s momentum into the new economy.

“Cut government spending” is as much useless rhetoric as “we must raise taxes.”

Michigan is moving with ever so much agony from a manufacturing state to new economy sectors. Most of those new economic sectors are smaller businesses, most are service businesses. The state’s tax policies and practices are pinned to the old economy. It is apparent that service sector taxes must be considered in the change if state revenues are to be rebuilt.

It is quite obvious that consolidations — long discussed among public school superintendents and municipal leaders — must be part of the discussion of “savings.” The state is otherwise left with local units of government penny pinching for the continued under-funding of revenue return to local governments (state revenue sharing), and school boards will forever be locked in financial turmoil. Legislators must ask: Is it easier for Michigan residents to accept unending tax increases than consolidations of services?

It is imperative that legislators begin to apply the rules of outcomes-based budgeting to funding of state programs. The principle, most recently upheld by former State Rep. Jerry Kooiman, R-Grand Rapids, during last year’s budget debates, was most popularly exemplified by state colleges and university funding to those institutions that actually graduated the greatest number of students (another need in a labor-force strapped state).

The Center for Michigan, an Ann Arbor-based nonpolitical think tank, has spent more than a year holding pulling together a wide range of opinion and information from almost every public and private sector in the state. Its No. 1 admonition is that “our elected leaders in the state House and Senate have a choice. They can take half-measures and make short-term fixes to get through this year’s financial crunch. Or they can finally solve the state’s structural budget deficit. A true solution requires a collective rise above the normal partisan, zero-sum, transactional political environment in Lansing to achieve common ground and fundamental change for the public good. It is an enormously difficult — and crucial — task.”

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