These Are Decisive, Not Divisive Times

February 19, 2007
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Last week in this space the Business Journal underscored the well-researched advice and admonition from the Center for Michigan, an Ann Arbor-based think tank that has held community meetings with business leaders, economic analysts and academics across the state. In its policy paper the center encouraged legislators: “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.”

Round One of the very predictable and time-wasting debate over the state budget was more of the same rather than the collaborative effort a majority of constituents proclaimed as “job one” with their votes last November.

We perhaps had a clue: During an editorial board meeting last week with Grand Rapids Business Journal, State Senate Majority Leader Mike Bishop, R-Rochester, was breathtakingly shallow and cavalier in regard to further state reductions in state revenue sharing and school aid funding. His remarks are woeful for Kent County, for the city of Grand Rapids and the other municipalities in the county — and for local developers and businesses.

Asked about reinstating revenue-sharing payments to the county and whether credits from the Single Business Tax that were awarded for investments from the private sector would be honored, the “leader” declared, “The economy is a shared problem that all of us are going to have to share together.”

Bishop didn’t say whether Kent County would be reinstated in 2011, leaving some room that it might. But his roundabout response doesn’t inspire much optimism.

“We never ask them what they’ve done to make themselves more efficient. Governments get lazy when they don’t do that,” Bishop opined. Bishop said it wasn’t clear revenue sharing would be reinstated to any local unit. He said the annual payment has turned into an entitlement program and that local units have become addicted to the revenue stream.

“We have to figure out how to fund it,” he said. But a funding mechanism is in place, one that was updated about nine years ago through the efforts of then-State Senator Glenn Steil, R-Grand Rapids. Payments are based on a formula that distributes sales tax receipts generated in an area to that area.

After Steil led the charge to update the formula, the state shared about $1.4 billion of those receipts with local units in 1999.

As for the Single Business Tax credits that have been pledged in return for investments that have been made, Bishop said the credits were tied to the tax that ends this year, and lawmakers will determine whether the credits will be renewed. He said the legislature may “grandfather” the awarded credits into the state’s tax policy and then create a new incentive that would be tied to a new business tax.

Adding to the malaise, Bishop also pronounced that he expects school aid funding for the current fiscal year to be cut in half. Period.

The Business Journal reiterates: It is time for the leadership of compromise, not the cowardice of inaction and stall tactics.    

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