Michigan’s General Fund: another example of government unable to manage itself

June 19, 2015
Text Size:

In the June 15 issue of GRBJ, a quote from a news release attributed to Business Leaders for Michigan and its President and CEO Doug Rothwell was noteworthy.

BLM is a respected business group that has influenced the leadership of our state.

Rothwell opposed cutting MEDC funding as a partial solution to funding repairs for Michigan’s roads and bridges. He adds: “Michigan needs a permanent long-term solution to increase road repair funding without raiding the General Fund and hurting other critical priorities that are important to our economy. The revenue should come from the users of our roads and bridges and be sufficient to ensure good quality road and bridge conditions.”

The Business Journal believes it is important to point out General Fund monies exist to pay for road repairs, among other services. The Business Journal agrees Michigan needs a permanent long-term solution to fix and maintain Michigan’s crumbling roads and bridges.

However, the BLM comments call into question motives, purposes and goals of the group; they reflect a major problem inherent in our current state of affairs and system of governing. Here is a “special interest” group, a positive support group with good intentions, undermining the legislative process and preventing elected officials from focusing on a more fundamental issue: “What exactly is the purpose of state government and the General Fund?”

The fund once had a clear purpose tied to the Constitution and the historical role of government. Rothwell’s statement, well intentioned as it may be, is an example of why it is difficult for government to focus on fundamental issues: There are too many special interest groups vying for the limited resources of our state.

General Fund priority No. 1 is to maintain the ongoing infrastructure necessary for the state to conduct its affairs for the general health and welfare of its citizens. This includes roads, bridges, schools, criminal justice, etc., and whatever citizens believe is important for them to succeed and for the state to move forward.

But when special interests interfere, or intercede, in the process, narrowing the priorities and funding process to “game” the system, the focus of elected officials becomes fuzzy and divided. How can we achieve consensus when every special interest sees the General Fund as a large bank account from which to withdraw for its own purposes? It seems, following the BLM logic, education should also be paid for by users, as should the criminal justice system and other services.

Previous administrations have continuously raided the “dedicated” (by constitutional mandate) gas tax to fund other priorities. So, can we really establish a workable user fee system and get enough of our fellow citizens to believe it will work? What exactly, then, is the purpose of the General Fund?

A recent poll commissioned by The Mackinac Center for Public Policy and conducted by Mitchell Research & Communications Inc. said “66 percent of likely 2016 Michigan general election voters say they would rather see hundreds of millions of dollars spent on roads than given to businesses through the Michigan Economic Development Corporation.”

BLM and elected officials must be clear: The General Fund is the basis for the general conduct of the affairs of our state that benefit all its citizens, directly and indirectly. All citizens benefit from good roads and bridges. All citizens benefit from quality education. All citizens benefit from a fair and impartial criminal justice system. These are the priorities that require permanent placement in the General Fund. All parties should agree to that principle and to the permanent placements.

The General Fund should be more fundamental than simply to establish current or temporary priorities. It is established by the Legislature to sustain the affairs and infrastructure of this state. If we can’t agree on that simple premise, what hope is there of coming to grips with real issues of government spending and budgeting?

Unless we address this fundamental issue, the process will repeat: We’ll run out of money again, the next crisis will occur and we’ll hear cries for raising taxes to cover the shortfall. The Business Journal believes we can and must do better.

Recent Articles by John Zwarensteyn

Editor's Picks

Comments powered by Disqus