This is it.
This is the battle for our future.
What happens in the next few months will define the quality of life in our state for years to come.
The framework will be set in the State of the State speech Tuesday, and Granholm had better bring her "A" game to the table. Given the tone of the opposition in response to the release of that bipartisan All-Star panel 19-page report, correctly entitled "Michigan's Defining Moment", a report that spells out in detail the crisis we are dealing with, she is going to need it.
The state will face about $3.5 billion worth of unfunded programs and services over the next 18 months, and now we have to fix it. Will the Republicans play ball?
Gov. Jennifer Granholm has given many speeches in four years, but perhaps none as important as the one she'll deliver Tuesday.
Granholm's fifth State of the State address must assure Michiganders that things aren't spinning out of control, and she must offer hope for recovery sooner than later.
While offering hope is, indeed, an important aspect and the ultimate goal, she also needs to take off her shoe and pound it on the podium and scare the hell out of these guys. Time for some of that "Inner Engler", time for some of that "Fight Back" governor that we saw last year, because this battle is going to make the campaign against DeVos seem like just the warm-up, if you can believe that.
Now we are talking about real money. Last year we defeated the man; now we have to defeat the ideology behind him.
Doubt she will do the shoe trick. Just not her style. But someone needs to impress upon these chuckleheads that more tax cuts are not going to solve this problem.
Critics have said this report is cover for raising taxes; they either haven't read it or they aren't paying attention, one of the two. It's just not that simple. In fact, the report specifically says we cannot tax our way out of this.
This is a structural challenge, not simply the result of an economic downturn. A persistently weak economy, tax cuts, spending pressures, and inattention to essential government reform have triggered the crisis. We will not economically grow our way out of it. We cannot solely cut or tax our way out of it. Fundamentally, Michigan must reform its spending and taxing and must reinvent the way state and local governments deliver services to be more efficient and productive.
Reform. The whole damn thing. Right now.
This failed to impress the Norquist Fan Club. Even in the face of serious, chronic revenue shortfalls, they are dismissing the facts and sticking to the mistaken belief that more cuts are the answer. Some Republican reviews of the report indicate they either don't comprehend the seriousness of this situation, or they do and they just don't care.
State Sen. Mark Jansen, R-Gaines Township, credited Granholm with a dynamic presentation.
But he said she may have exaggerated the state's problems, and he still was inclined to support an overall tax cut.
"I think we have to stoke the fires of Michigan's economy," he said.
Rep. Bill Huizenga (R-Zeeland) thinks it's just a way "to lay the groundwork, I believe, for a tax increase."
Bishop and DeRoche hide behind the "families" meme and also seem oblivious to the consequences of more cuts to revenue.
But the Rochester Republican, along with House Republican Leader Craig DeRoche of Novi, also put out a statement disagreeing with the indications from Granholm and the Emergency Financial Advisory Panel that tax increases need to be in the mix of possible solutions.
"I have been clear over the last month that tax increases on Michigan citizens is not the best long-term solution to our economic trouble," Bishop said in a release. "More important than our state government, it's Michigan families who face crisis."
Bishop fails to point out how "families" will be hurt if the revenue problems aren't resolved. Republicans will appeal to personal greed first, perpetuating the theme of the endless free lunch, something for nothing, conveniently blind to the reality that "families" are the ones who will pay the price in the end.
Cutting revenue sharing to cities will hurt families. Cutting schools will hurt families. Cutting health care will hurt families. Disinvesting in this state will hurt families.
We have had plenty of cuts already. If the Republican theory is correct, then why aren't we flourishing right now?
Since the passage of Proposal A in 1994, Michigan has enacted tax cuts which reduce current state revenue by $3.2 billion a year. In addition, local property taxes have been cut by $5.4 billion.
In FY 2005–06 (the last full year for which data are available), these tax cuts reduced income tax revenue by $1.6 billion, a cut of 20 percent. The income tax rate has been cut by 11 percent (from 4.4 to 3.9 percent), personal exemptions have been increased, special exemptions and credits have been added, and most private pension income has been exempted. If the personal income tax were at the 4.4 percent level of the 1990s rather than the current 3.9 percent level, the state would be receiving $850 million more—or about the level of the estimated shortfall in General Fund and School Aid Fund revenue this year.
And as far as business rates go-
Since 1990, the share of all taxes (including property and income) borne by Michigan businesses has declined from 43 percent to 37.9 percent.
According to the Council on State Taxation, in a study produced annually by Ernst and Young, Michigan ranks 36th lowest in state and local business taxes as a share of Gross State Product. If Michigan does not replace the SBT with other business taxes, the ranking would likely drop to the lowest in the country.
And yet, the Republicans introduced yet another tax cut proposal for business in the Senate this past week.
Amazing. They still don't get it.
Instead of talking about reform and restructuring, which is what needs to happen, Republicans and the media cling to those boogeyman buzzwords, "raising taxes"- words that are only designed to scare everyone. Words that serve to immediately close minds and eyes to the solutions, which will in turn will leave the door open for the real monster to take over Michigan- that being a diminished quality of life for everyone as we fall further behind the rest of the country when it comes to attracting the kind of people and business we will need to succeed in the 21st century economy.
The ultimate campaign begins this week, and our future is on the line.
Wish Governor Granholm a Happy Birthday on Monday, and then watch her Tuesday as the legacy starts to become defined. It should be a helluva show.
(Cross-posted at Daily Kos. Just for fun.)