Sunday, November 8, 2009
Monday, September 14, 2009
Budgeting and the Governor
The budget for our next fiscal year, which begins on October 1st, still has not been completed. There is talk of a state government shut down because the House, Senate and the Governor cannot agree on necessary cuts to balance the budget.
The Speaker of the House and the Senate Majority Leader have continued to meet. The Governor has not participated in the past week. The other two leaders have evidently been meeting regularly.
The Govenror announced that this week she will be in Japan trying to get jobs to relocate from Japan to Michigan.
Yet the budet is not done. No agreement on new revenue sources, taxes, fees, etc.. No agreement yet on budget cuts to balance the new budget.
Good idea for the Governor to go to Japan this week when the fiscal year expires in two weeks? When we have no budget agreement? Should she not stay at the table with the Speaker and the Majority Leader and continue the negotiations and prevent a shut down?
Or is it a better policy to go to Japan and attract new jobs for unemployed Michiganders? Or maybe delay the Japan trip until October after the budget is resolved?
The Speaker of the House and the Senate Majority Leader have continued to meet. The Governor has not participated in the past week. The other two leaders have evidently been meeting regularly.
The Govenror announced that this week she will be in Japan trying to get jobs to relocate from Japan to Michigan.
Yet the budet is not done. No agreement on new revenue sources, taxes, fees, etc.. No agreement yet on budget cuts to balance the new budget.
Good idea for the Governor to go to Japan this week when the fiscal year expires in two weeks? When we have no budget agreement? Should she not stay at the table with the Speaker and the Majority Leader and continue the negotiations and prevent a shut down?
Or is it a better policy to go to Japan and attract new jobs for unemployed Michiganders? Or maybe delay the Japan trip until October after the budget is resolved?
Wednesday, September 9, 2009
Federalism Issues Again
Federalism has been an issue since our nation's founding. It has been reinvented many times over the past 200 years. We are now hearing an increasingly louder debate about the federal government requirements on states in order to qualify for federal "stimulus funds". Some see the requirements creating an inbalance in "federalism" in the relationship between the federal and state governments. This story is an example of what is happening out in the states:
The Nation
States Ignoring Stimulus Welfare Fund
A $5 billion emergency fund for needy families can be used to immediately create jobs for the unemployed, pay rent for families facing eviction, even repair someone’s car so they can get to work. But many states aren’t taking advantage of the windfall because state officials say they can’t afford the requirement that they put up 20 percent of the costs. And of the states that have applied for funds, there have been accusations of abuse of funds.
"Hundreds line up outside a Chase Bank in Jackson Heights, Queens, N.Y., to take advantage of the free funds aimed at helping underprivileged children. Every child between 3 and 17 was eligible for $200. (John Taggart/New York Daily News)
Word of the money spread quickly.
New York state had put hundreds of dollars in federal stimulus money into food stamp accounts, and if it wasn’t withdrawn by 4 p.m., 9 p.m., midnight—depending on the version of the rumor—it would disappear. So on a sultry August day, lines stretched at ATMs all over the state, a literal run on the bank.
The surprise cash—which was real, even though the deadlines weren’t—came from a little-known stimulus fund that economists say would directly help people hurt by the recession and be extremely effective at stimulating the economy.
The $5 billion emergency fund for needy families [2] can be used to immediately create jobs for the unemployed, pay rent for families facing eviction, even repair someone’s car so they can get to work.
But many states aren’t taking advantage of the windfall because state officials say they can’t afford the requirement that they put up 20 percent of the costs. Six months into the stimulus, only 27 states have applied for the money.
In New York, Gov. David Paterson came up with a creative solution [3] that has been praised by economists and advocates for the poor. Unable to make the 20 percent match on its own, the state teamed up with philanthropist George Soros [4], whose Open Society Institute [5] contributed $35 million so the state could access $140 million in stimulus money.
The money went straight to low-income families, who received $200 per child for back-to-school supplies and clothes. About 800,000 children were eligible.
But the chaos and allegations of abuse that followed illustrates how, in the heated debate over the stimulus, even the most lauded program can turn into the most lampooned overnight.
Critics say the state bungled it when it put no restrictions on how the money could be used. It also deposited it into the debit accounts of food stamp and welfare recipients without telling them it was there or what it was for until days later.
Rumors percolated that the money had to be taken out and spent right away. And store clerks began complaining that people were using the money for beer, lottery tickets, iPods and flat-screen TVs.
“They said, ‘Well, we have to get our money out of the ATM to buy school supplies,’” said Diane Goly, who owns a Sunoco gas station in Syracuse. “But as we were watching, people were taking the money to buy beer and cigarettes.”
Noah Lebowitz, spokesman for Monroe County in Rochester, said social-services investigators found that some people in its drug treatment programs received large amounts of cash.
“They have a very difficult time not spending it on drugs,” he said. “We were seeing people with drug abuse problems getting $1,000 in their bank account.”
Monroe County Executive Maggie Brooks [6] asked U.S. Attorney General Eric Holder to investigate the possible abuse of taxpayer dollars. Republican politicians railed against the lack of accountability and called it a rollback of welfare reform [7] efforts of the mid-1990s. But the program’s defenders said isolated cases have been overblown to stoke anger and play into the stereotype of welfare Cadillacs.
The Temporary Assistance for Needy Families [8] program was created in 1997 to overhaul welfare and push recipients to find work rather than “living off the system.” As a result, welfare rolls dropped from 12 million in 1996 [9] to less than 4 million in 2008 [10], even though there had been little change in the national poverty and jobless rates before the current recession.
When the economic stimulus bill was passed in February, it created a new $5 billion emergency fund under TANF to help states whose welfare caseloads have grown during the recession. But it also encouraged the expansion of rarely-used efforts that any state can take advantage of—such as one-time cash payments to low-income families and temporary government-paid jobs programs similar to the Works Progress Administration of the Great Depression.
In Perry County, Tenn., where roughly one of every four workers had been unemployed since January, the state used $5 million to create jobs for those laid off from an auto parts plant [11]—clearing brush for the state highway department, painting murals, even baking turnovers at a pie factory. The county’s jobless rate dropped from a high of 27 percent in January to 19 percent in July.
Los Angeles County used $160 million to put together a jobs program intent on employing 10,000 people. The stimulus is picking up 100 percent of the workers’ salaries, because the state argued that additional costs to administer the program and supervise workers counts as the 20 percent.
Ken Wolfe, a spokesman for the U.S. Health and Human Services Department [12], said the agency expects more states to apply for the money. But Jack Tweedie, who’s been studying the TANF program for the National Conference of State Legislatures [13], said most states will take only enough to ensure that they won’t have to turn away new families who qualify for welfare. As much as $1 billion could be left on the table when the program ends in September 2010, he said.
“Virtually all the states are in really tough fiscal positions—they’ve been cutting, not expanding,” said Tweedie, director of the children and families program for the National Conference. “It’s hard to get policymakers to focus on new things when primarily what they have to do is cut things.”
Louisiana doesn’t plan to use any of the funds, despite the fact that one in five residents lives in poverty—the second highest in the nation. Sammy Guillory, deputy assistant secretary of Louisiana’s Office of Family Support [14], said even with the stimulus picking up 80 percent, the state can’t afford it.
“We’re in an almost crisis level budget situation in Louisiana,” he said. “We’re facing budget cuts and staff reductions every day. So even to start a program is not an option right now.”
Tweedie and other public policy experts have been traveling around the country educating states on the program’s flexibility. The 20 percent portion doesn’t have to come from state budgets, he said. It can be paid by cities, counties, private donors or nonprofits like homeless shelters or food banks.
“If they want to do back-to-school payments, go talk to Wal-Mart or Target and have them put up the 20 percent,” Tweedie said.
Economist Lawrence Mishel said giving money to low-income people is one of the most effective ways to stimulate the economy, because they’re more likely to spend it than average consumers.
“Whether you call it back-to-school money or just go-out-and-spend-it money, I don’t think it really matters much,” said Mishel, president of the Economic Policy Institute [15]. “Why would somebody get upset about money going to people on TANF? As opposed to rich people buying flat-screen TVs” with tax cuts?
Like New York, Texas is using stimulus money to help poor families buy back-to-school supplies [16], albeit on a much smaller scale, just $6 million for the entire program. Welfare recipients got just $105 per child and they could use the money only at specific stores, not at ATMs.
Texas also announced its program weeks in advance, avoiding the confusion New Yorkers experienced when the money came their way.
Niurka Ventura, a mother of five in the Washington Heights section of Manhattan, said she heard about the money from a friend, who told her she had to withdraw the money by midnight. She noticed a crowd waiting at the ATM next to her apartment and sent her daughter to stand in line, which she said took three hours.
Ventura said she spent the money on phone and electricity bills, took her kids to the zoo and treated them to pizza. She said she didn’t get the letter telling her that the money was for school supplies until a week later.
Kristin Proud, the state’s deputy director for operations, said there was no other way to get the money out in time for back-to-school sales.
The state couldn’t limit it to a certain number of stores, because rural residents might be an hour’s drive from a major chain. It would have taken years to create a card system that could limit purchases to a list of items, as food-stamp cards are designed to do, she said.
“It would be very difficult to determine what kind of clothing, for example, is a back-to-school item,” Proud said. “Like is a woman’s size 12—is that OK for a purchase for back-to-school for children? Some would argue no. I would argue that I have friends who have large children who are 15 and wear clothing bigger than I do.”
Proud said the federal government signed off on New York’s plans. When asked about allegations that the money was being misspent, Wolfe, the Health and Human Services spokesman, referred ProPublica to remarks that an agency official made when the New York program was announced, praising the idea. Wolfe did not respond to the criticisms of how the program was implemented.
Don White, a spokesman for the Health and Human Services inspector general, said his office is aware of the New York allegations but wouldn’t confirm or deny whether investigators were looking into them.
Mimi Corcoran, who works with George Soros’ foundation, said Soros was happy with the outcome. He was inspired to donate the money by his own experience after World War II, she said, when Quakers gave him school money with no strings attached.
“We respect and honor that even if individuals are poor, they will spend the money appropriately for their children,” she said
Outside the Washington Heights food stamps office two weeks ago, Tokina Julius, a single mother, said she didn’t know how she would have afforded new clothes for her 7-year old daughter Jacqueline without the money. She said she bought four pairs of jeans and three shirts at Old Navy, as well as jumpers, stockings and a pair of Hush Puppies sneakers. She said she has $50 left, which she said she’s saving for notebooks.
“I was happy it came,” Julius said. “It really helped me out in a big way.”"
By the Nation Magazine.
The Nation
States Ignoring Stimulus Welfare Fund
A $5 billion emergency fund for needy families can be used to immediately create jobs for the unemployed, pay rent for families facing eviction, even repair someone’s car so they can get to work. But many states aren’t taking advantage of the windfall because state officials say they can’t afford the requirement that they put up 20 percent of the costs. And of the states that have applied for funds, there have been accusations of abuse of funds.
"Hundreds line up outside a Chase Bank in Jackson Heights, Queens, N.Y., to take advantage of the free funds aimed at helping underprivileged children. Every child between 3 and 17 was eligible for $200. (John Taggart/New York Daily News)
Word of the money spread quickly.
New York state had put hundreds of dollars in federal stimulus money into food stamp accounts, and if it wasn’t withdrawn by 4 p.m., 9 p.m., midnight—depending on the version of the rumor—it would disappear. So on a sultry August day, lines stretched at ATMs all over the state, a literal run on the bank.
The surprise cash—which was real, even though the deadlines weren’t—came from a little-known stimulus fund that economists say would directly help people hurt by the recession and be extremely effective at stimulating the economy.
The $5 billion emergency fund for needy families [2] can be used to immediately create jobs for the unemployed, pay rent for families facing eviction, even repair someone’s car so they can get to work.
But many states aren’t taking advantage of the windfall because state officials say they can’t afford the requirement that they put up 20 percent of the costs. Six months into the stimulus, only 27 states have applied for the money.
In New York, Gov. David Paterson came up with a creative solution [3] that has been praised by economists and advocates for the poor. Unable to make the 20 percent match on its own, the state teamed up with philanthropist George Soros [4], whose Open Society Institute [5] contributed $35 million so the state could access $140 million in stimulus money.
The money went straight to low-income families, who received $200 per child for back-to-school supplies and clothes. About 800,000 children were eligible.
But the chaos and allegations of abuse that followed illustrates how, in the heated debate over the stimulus, even the most lauded program can turn into the most lampooned overnight.
Critics say the state bungled it when it put no restrictions on how the money could be used. It also deposited it into the debit accounts of food stamp and welfare recipients without telling them it was there or what it was for until days later.
Rumors percolated that the money had to be taken out and spent right away. And store clerks began complaining that people were using the money for beer, lottery tickets, iPods and flat-screen TVs.
“They said, ‘Well, we have to get our money out of the ATM to buy school supplies,’” said Diane Goly, who owns a Sunoco gas station in Syracuse. “But as we were watching, people were taking the money to buy beer and cigarettes.”
Noah Lebowitz, spokesman for Monroe County in Rochester, said social-services investigators found that some people in its drug treatment programs received large amounts of cash.
“They have a very difficult time not spending it on drugs,” he said. “We were seeing people with drug abuse problems getting $1,000 in their bank account.”
Monroe County Executive Maggie Brooks [6] asked U.S. Attorney General Eric Holder to investigate the possible abuse of taxpayer dollars. Republican politicians railed against the lack of accountability and called it a rollback of welfare reform [7] efforts of the mid-1990s. But the program’s defenders said isolated cases have been overblown to stoke anger and play into the stereotype of welfare Cadillacs.
The Temporary Assistance for Needy Families [8] program was created in 1997 to overhaul welfare and push recipients to find work rather than “living off the system.” As a result, welfare rolls dropped from 12 million in 1996 [9] to less than 4 million in 2008 [10], even though there had been little change in the national poverty and jobless rates before the current recession.
When the economic stimulus bill was passed in February, it created a new $5 billion emergency fund under TANF to help states whose welfare caseloads have grown during the recession. But it also encouraged the expansion of rarely-used efforts that any state can take advantage of—such as one-time cash payments to low-income families and temporary government-paid jobs programs similar to the Works Progress Administration of the Great Depression.
In Perry County, Tenn., where roughly one of every four workers had been unemployed since January, the state used $5 million to create jobs for those laid off from an auto parts plant [11]—clearing brush for the state highway department, painting murals, even baking turnovers at a pie factory. The county’s jobless rate dropped from a high of 27 percent in January to 19 percent in July.
Los Angeles County used $160 million to put together a jobs program intent on employing 10,000 people. The stimulus is picking up 100 percent of the workers’ salaries, because the state argued that additional costs to administer the program and supervise workers counts as the 20 percent.
Ken Wolfe, a spokesman for the U.S. Health and Human Services Department [12], said the agency expects more states to apply for the money. But Jack Tweedie, who’s been studying the TANF program for the National Conference of State Legislatures [13], said most states will take only enough to ensure that they won’t have to turn away new families who qualify for welfare. As much as $1 billion could be left on the table when the program ends in September 2010, he said.
“Virtually all the states are in really tough fiscal positions—they’ve been cutting, not expanding,” said Tweedie, director of the children and families program for the National Conference. “It’s hard to get policymakers to focus on new things when primarily what they have to do is cut things.”
Louisiana doesn’t plan to use any of the funds, despite the fact that one in five residents lives in poverty—the second highest in the nation. Sammy Guillory, deputy assistant secretary of Louisiana’s Office of Family Support [14], said even with the stimulus picking up 80 percent, the state can’t afford it.
“We’re in an almost crisis level budget situation in Louisiana,” he said. “We’re facing budget cuts and staff reductions every day. So even to start a program is not an option right now.”
Tweedie and other public policy experts have been traveling around the country educating states on the program’s flexibility. The 20 percent portion doesn’t have to come from state budgets, he said. It can be paid by cities, counties, private donors or nonprofits like homeless shelters or food banks.
“If they want to do back-to-school payments, go talk to Wal-Mart or Target and have them put up the 20 percent,” Tweedie said.
Economist Lawrence Mishel said giving money to low-income people is one of the most effective ways to stimulate the economy, because they’re more likely to spend it than average consumers.
“Whether you call it back-to-school money or just go-out-and-spend-it money, I don’t think it really matters much,” said Mishel, president of the Economic Policy Institute [15]. “Why would somebody get upset about money going to people on TANF? As opposed to rich people buying flat-screen TVs” with tax cuts?
Like New York, Texas is using stimulus money to help poor families buy back-to-school supplies [16], albeit on a much smaller scale, just $6 million for the entire program. Welfare recipients got just $105 per child and they could use the money only at specific stores, not at ATMs.
Texas also announced its program weeks in advance, avoiding the confusion New Yorkers experienced when the money came their way.
Niurka Ventura, a mother of five in the Washington Heights section of Manhattan, said she heard about the money from a friend, who told her she had to withdraw the money by midnight. She noticed a crowd waiting at the ATM next to her apartment and sent her daughter to stand in line, which she said took three hours.
Ventura said she spent the money on phone and electricity bills, took her kids to the zoo and treated them to pizza. She said she didn’t get the letter telling her that the money was for school supplies until a week later.
Kristin Proud, the state’s deputy director for operations, said there was no other way to get the money out in time for back-to-school sales.
The state couldn’t limit it to a certain number of stores, because rural residents might be an hour’s drive from a major chain. It would have taken years to create a card system that could limit purchases to a list of items, as food-stamp cards are designed to do, she said.
“It would be very difficult to determine what kind of clothing, for example, is a back-to-school item,” Proud said. “Like is a woman’s size 12—is that OK for a purchase for back-to-school for children? Some would argue no. I would argue that I have friends who have large children who are 15 and wear clothing bigger than I do.”
Proud said the federal government signed off on New York’s plans. When asked about allegations that the money was being misspent, Wolfe, the Health and Human Services spokesman, referred ProPublica to remarks that an agency official made when the New York program was announced, praising the idea. Wolfe did not respond to the criticisms of how the program was implemented.
Don White, a spokesman for the Health and Human Services inspector general, said his office is aware of the New York allegations but wouldn’t confirm or deny whether investigators were looking into them.
Mimi Corcoran, who works with George Soros’ foundation, said Soros was happy with the outcome. He was inspired to donate the money by his own experience after World War II, she said, when Quakers gave him school money with no strings attached.
“We respect and honor that even if individuals are poor, they will spend the money appropriately for their children,” she said
Outside the Washington Heights food stamps office two weeks ago, Tokina Julius, a single mother, said she didn’t know how she would have afforded new clothes for her 7-year old daughter Jacqueline without the money. She said she bought four pairs of jeans and three shirts at Old Navy, as well as jumpers, stockings and a pair of Hush Puppies sneakers. She said she has $50 left, which she said she’s saving for notebooks.
“I was happy it came,” Julius said. “It really helped me out in a big way.”"
By the Nation Magazine.
Sunday, August 30, 2009
State Ethics Reform
For decades Michigan has had a campaign finance reform law and lobbying regulation law on the books. It has not been updated since then in any significant way. Michigan was a leader in regulation and monitoring of public officials campaign funds and lobbyist behavior. For the last twenty years most other large states have passed us by. We have not done any significant reform and our laws do not reflect the changes in our society or in techonology.
It is time for sweeping changes and reform.
Attorney General Cox has made such a proposal. He is running for Governor so one has to question his motiviation, BUT at least he has thrown something into the reform bucket. He is putting something forward. It is time for legislative leaders to come forward with their proposals. Citizens groups also. Only 8 of 38 Senators will be returning, due to term limits, after the 2010 elections. One third of the House will be new. The Governor, Lt. Governor, Attorney General and the Secretary of State are all term limited and they will be replaced by new officials. It is time for these exiting officials to take a look at this issue and put some reform in place for the new government that will arrive on January 1, 2011.
The following is a news story by the Detroit News on Sunday, August 30, 2009:
Thursday, August 27, 2009
Cox proposes ethics reform bills for Mich. public officials
Mike Wilkinson / The Detroit News
Detroit -- Public officials across Michigan from the Detroit City Council to the governor's office would be required to disclose lobbyist-paid gifts and details about their assets, incomes and debt under an ethics reform package proposed by Attorney General Mike Cox.
If the package of bills is passed, Cox said Thursday, the state would join 47 others that have more detailed rules on what public officials must tell constituents about their financial lives. Such disclosure, he said, would allow citizens to know more about potential conflicts between a politician's life and their voting record.
Under Cox's plan, many elected officials and some appointed ones would be required, under fear of criminal prosecution, to reveal on what boards they serve, who took them out to golf and dinner, and which bank holds their mortgage. It would also force the disclosure of similar gifts given to spouses and dependents, and would give the Secretary of State subpoena power to gather information.
"If I'm serving on a corporate board, the voters ought to know about it," Cox said.
According to a recent report by the Center for Public Integrity, Michigan, Vermont and Idaho are the only states that have no laws requiring personal financial disclosures for legislators. The organization gave each of them, along with 17 other states, an "F" grade. But 14 others states, according to the organization, have improved their disclosure laws since a similar survey was done in 2006.
"Michigan has the opportunity to join the bandwagon, where the thrust has been internationally for more transparency and openness in government," said Peggy Kerns, director of the National Conference of State Legislatures' Center for Ethics in Government.
Kerns, however, said the disclosure must have two components: easily accessible data and a public that wants the information.
"The public has to care about this stuff too," said Kerns, who is based in Denver.
The package proposed by Cox is expected to be introduced in the Legislature within the next week, he said. It is sponsored by state Rep. Paul Opsommer, R-DeWitt.
Most states have ethics legislation, and Michigan has some: Lobbyists, for instance, are required to disclose when they give gifts totaling $725 to public officials. But the Opsommer bills would put that onus on public officials, and would require disclosure when the total exceeds $250.
Cox announced the package during a press conference at his Detroit office, where he was joined by Warren Mayor Jim Fouts and Gary Brown, a candidate for Detroit City Council who was at the center of the text-message scandal revealed after he won a whistle-blower suit against the city and former Detroit Mayor Kwame Kilpatrick.
The law would cover the state's top elected officials, as well as department directors, the state boards of education, legislators and state Supreme Court justices. It also would cover local elected officials who earn more than $65,000.
Among the provisions:
• Report gifts from lobbyists (sporting events, meals, trips) that exceed $250.
• Reimbursements from lobbyists that exceed $250.
• Outside income that exceeds $1,000, including second jobs, rental income and investment income.
• Assets, including homes, recreational vehicles, stocks and bonds that exceed $2,500.
• Liabilities, such as home loans, that exceed $10,000.
Fouts said he has taken flak in Warren for a "no gifts" policy, one of several ethics stands he's taken in the Macomb County city. The public needs to know that there are no hidden interests behind the politicians they elect, he said.
"It really enhances the public good and, more importantly, the public trust," Fouts said. "People should be elected to serve the public and not their personal interests."
Cox, who has announced his bid for governor in 2010, said he will make his own voluntary disclosure next week. He admitted to getting some candy and nuts at Christmastime but said he has eschewed other gifts. But he said he knows that lobbyists and others are always interested in gaining the ear of politicians.
"If you want to golf all summer, you can golf all summer," Cox said of lobbyist-provided gifts. "The temptations are always there."
Brown, who is among the 18 finalists for City Council, said, if elected, he will propose similarly tough disclosure legislation for Detroit. He would expand it, however, to include department heads. Brown, who was fired in 2003 by Kilpatrick after he began investigating the behavior of the mayor's staff, ultimately won an $8.4 million settlement from the city.
He said he'd like to see the creation of a Web site that would allow anyone to see how every dollar is spent by the city.
"I would like to see a bright light shined on city government," he said.
mwilkinson@detnews.com (313) 222-2563
It is time for sweeping changes and reform.
Attorney General Cox has made such a proposal. He is running for Governor so one has to question his motiviation, BUT at least he has thrown something into the reform bucket. He is putting something forward. It is time for legislative leaders to come forward with their proposals. Citizens groups also. Only 8 of 38 Senators will be returning, due to term limits, after the 2010 elections. One third of the House will be new. The Governor, Lt. Governor, Attorney General and the Secretary of State are all term limited and they will be replaced by new officials. It is time for these exiting officials to take a look at this issue and put some reform in place for the new government that will arrive on January 1, 2011.
The following is a news story by the Detroit News on Sunday, August 30, 2009:
Thursday, August 27, 2009
Cox proposes ethics reform bills for Mich. public officials
Mike Wilkinson / The Detroit News
Detroit -- Public officials across Michigan from the Detroit City Council to the governor's office would be required to disclose lobbyist-paid gifts and details about their assets, incomes and debt under an ethics reform package proposed by Attorney General Mike Cox.
If the package of bills is passed, Cox said Thursday, the state would join 47 others that have more detailed rules on what public officials must tell constituents about their financial lives. Such disclosure, he said, would allow citizens to know more about potential conflicts between a politician's life and their voting record.
Under Cox's plan, many elected officials and some appointed ones would be required, under fear of criminal prosecution, to reveal on what boards they serve, who took them out to golf and dinner, and which bank holds their mortgage. It would also force the disclosure of similar gifts given to spouses and dependents, and would give the Secretary of State subpoena power to gather information.
"If I'm serving on a corporate board, the voters ought to know about it," Cox said.
According to a recent report by the Center for Public Integrity, Michigan, Vermont and Idaho are the only states that have no laws requiring personal financial disclosures for legislators. The organization gave each of them, along with 17 other states, an "F" grade. But 14 others states, according to the organization, have improved their disclosure laws since a similar survey was done in 2006.
"Michigan has the opportunity to join the bandwagon, where the thrust has been internationally for more transparency and openness in government," said Peggy Kerns, director of the National Conference of State Legislatures' Center for Ethics in Government.
Kerns, however, said the disclosure must have two components: easily accessible data and a public that wants the information.
"The public has to care about this stuff too," said Kerns, who is based in Denver.
The package proposed by Cox is expected to be introduced in the Legislature within the next week, he said. It is sponsored by state Rep. Paul Opsommer, R-DeWitt.
Most states have ethics legislation, and Michigan has some: Lobbyists, for instance, are required to disclose when they give gifts totaling $725 to public officials. But the Opsommer bills would put that onus on public officials, and would require disclosure when the total exceeds $250.
Cox announced the package during a press conference at his Detroit office, where he was joined by Warren Mayor Jim Fouts and Gary Brown, a candidate for Detroit City Council who was at the center of the text-message scandal revealed after he won a whistle-blower suit against the city and former Detroit Mayor Kwame Kilpatrick.
The law would cover the state's top elected officials, as well as department directors, the state boards of education, legislators and state Supreme Court justices. It also would cover local elected officials who earn more than $65,000.
Among the provisions:
• Report gifts from lobbyists (sporting events, meals, trips) that exceed $250.
• Reimbursements from lobbyists that exceed $250.
• Outside income that exceeds $1,000, including second jobs, rental income and investment income.
• Assets, including homes, recreational vehicles, stocks and bonds that exceed $2,500.
• Liabilities, such as home loans, that exceed $10,000.
Fouts said he has taken flak in Warren for a "no gifts" policy, one of several ethics stands he's taken in the Macomb County city. The public needs to know that there are no hidden interests behind the politicians they elect, he said.
"It really enhances the public good and, more importantly, the public trust," Fouts said. "People should be elected to serve the public and not their personal interests."
Cox, who has announced his bid for governor in 2010, said he will make his own voluntary disclosure next week. He admitted to getting some candy and nuts at Christmastime but said he has eschewed other gifts. But he said he knows that lobbyists and others are always interested in gaining the ear of politicians.
"If you want to golf all summer, you can golf all summer," Cox said of lobbyist-provided gifts. "The temptations are always there."
Brown, who is among the 18 finalists for City Council, said, if elected, he will propose similarly tough disclosure legislation for Detroit. He would expand it, however, to include department heads. Brown, who was fired in 2003 by Kilpatrick after he began investigating the behavior of the mayor's staff, ultimately won an $8.4 million settlement from the city.
He said he'd like to see the creation of a Web site that would allow anyone to see how every dollar is spent by the city.
"I would like to see a bright light shined on city government," he said.
mwilkinson@detnews.com (313) 222-2563
Budget Crisis Looms AGAIN
Once again Michigan citizens are faced with a looming budget crisis and potential government shutdown. The frustration with the Governor's inability to get the legislative leaders to agree on a plan is growing. The frustration with the legislative leaders inability to reach agreement or even to propose sweeping alternative solutions to our $2.5 bilion dollar deficit is very, very disappointing to many.
***************************************************************************
Detroit Free Press reports:
Maybe there has to be blood on the floor before anything can change.
That certainly seems where Michigan is headed, as the clock ticks down toward the beginning of a new budget year Oct. 1. Two years ago, recalcitrant lawmakers allowed the state to shut down before they came to terms with their budget differences. A disaster at least as big looms again.
With just 30 days left before a new budget must be in place, only the Republican-led state Senate has passed a balanced budget that accepts the fact that broad, deep cuts must be made throughout state government.
Gov. Jennifer Granholm's plan, which combined cuts with some small tax increases when she presented it in February, is outdated, because state revenues have dropped more than had been estimated at that point. In fact, revenues have continued to drop since the last official estimate, which was made in May.
The Democratic-majority House has passed all the appropriate budget bills largely by scarfing up every cent of stimulus money to maintain state programs -- and the House won't even say how much it will cost to keep the departments of Human Services and State Police running.
So going forward, the Senate plan -- which relies on dreadful cuts but is the most intellectually honest option on the table -- represents the only public blueprint for a fiscally responsible budget.
That's not good news for cities, college students, preschoolers, doctors and nursing homes with Medicaid patients, or anyone whose economic difficulties have left them reliant on the state's welfare system. But it reflects reality, given the state's terrible financial situation, the need to avoid blowing all the remaining federal stimulus money to balance one year's budget, and the likelihood that the state's revenue picture will get worse next year.
If Granholm and the House want to do something other than what the Senate is proposing -- which is highly likely, considering how harsh the Senate plan is -- now's the time to come forward with real plans that protect both the state's citizens and its longer-term financial outlook.
Keep education promise
School funding provides the clearest example of how the Senate budgeted with an eye to the future.
Without use of stimulus money, the $7,316 per-pupil foundation grant for schools would have to be cut about $510 (or 7%), according to calculations from the Citizens Research Council of Michigan. Granholm recommended a $59 cut per pupil in February; the Senate passed a cut of $110 per pupil, combined with $238-million worth of cuts in other school-related budget categories.
Using all of the remaining stimulus money allocated for education might allow the grant to be kept nearly steady next year, but that means school districts could face the full $510 cut -- or more, if tax revenues continue to decline -- all at once a year from now.
It makes far more sense to ease into cutbacks, while saving a little to cushion the blow in the following year. Similar calculations should hold for most other state operations.
Unfortunately, Michigan has no major programs that it can simply drop. Universities, prisons, health care and services for the poor make up almost the entirety of the general fund budget. The School Aid Fund, which is even bigger, supports K-12 education.
Two of the newest major program expansions, both of which are Granholm initiatives that the Senate budget kills, are Michigan Promise grants to help high school graduates cover the first two years of higher education and expanded preschool.
Agree or disagree with Granholm's priorities -- and she has the right instincts on education -- it is dishonorable to abandon the commitment made to college students. Lawmakers should look elsewhere for cuts, in order to sustain the Promise "promise." Changes in the program, if deemed essential to Michigan's long-term solvency, should be done with enough lead time so that the state isn't breaking its word to students.
But to survive and thrive in the 21st Century, the state needs to maintain this kind of investment in human capital -- the rising generations on whose continuing education the state depends for economic progress. Abandoning preschoolers will just as surely jeopardize the drive to make this a smarter, better-off state.
Nickels and dimes won't do
There's no doubt most other government services will have to take cuts, whether it's paring welfare benefits, hacking at revenue sharing with cities and townships, continuing to downsize the state's overbuilt prisons and pruning rates paid to anyone who treats Medicaid patients, as Granholm did in May with an executive order that sliced payments to doctors and nursing homes by 4%.
Some cuts, however, do fall into the penny-ante category and will do more harm than good. Returning wetlands regulation to the federal government and scattering the state archives, as part of the breakup of the Department of History, Arts and Libraries, for example, each get the state less than 0.1% closer to closing the budget gap. Yet diminishing the state's history and ignoring Michigan's singularly keen need to protect wetlands will cause indisputable harm and inconvenience for years to come.
Granholm, in particular, seems to prefer such minor actions -- including tax increases in many nearly invisible areas -- to sweeping change. Some are reasonable, such as her proposal to increase liquor license fees and to end some tax exemptions. But Michigan's overall problems are beyond most nickel-and-dime remedies.
Somehow, the governor and the legislative leaders must patch together a budget for the coming year. Yes, there will be blood. And maybe that's what it will take for everyone to realize that what the state most needs is a long-term restructuring -- in taxes, in health care, in incarceration policy, and more -- if the state is to have a long-term future.
Written by Detroit Free Press on Sunday, August 30, 2009
***************************************************************************
Detroit Free Press reports:
Maybe there has to be blood on the floor before anything can change.
That certainly seems where Michigan is headed, as the clock ticks down toward the beginning of a new budget year Oct. 1. Two years ago, recalcitrant lawmakers allowed the state to shut down before they came to terms with their budget differences. A disaster at least as big looms again.
With just 30 days left before a new budget must be in place, only the Republican-led state Senate has passed a balanced budget that accepts the fact that broad, deep cuts must be made throughout state government.
Gov. Jennifer Granholm's plan, which combined cuts with some small tax increases when she presented it in February, is outdated, because state revenues have dropped more than had been estimated at that point. In fact, revenues have continued to drop since the last official estimate, which was made in May.
The Democratic-majority House has passed all the appropriate budget bills largely by scarfing up every cent of stimulus money to maintain state programs -- and the House won't even say how much it will cost to keep the departments of Human Services and State Police running.
So going forward, the Senate plan -- which relies on dreadful cuts but is the most intellectually honest option on the table -- represents the only public blueprint for a fiscally responsible budget.
That's not good news for cities, college students, preschoolers, doctors and nursing homes with Medicaid patients, or anyone whose economic difficulties have left them reliant on the state's welfare system. But it reflects reality, given the state's terrible financial situation, the need to avoid blowing all the remaining federal stimulus money to balance one year's budget, and the likelihood that the state's revenue picture will get worse next year.
If Granholm and the House want to do something other than what the Senate is proposing -- which is highly likely, considering how harsh the Senate plan is -- now's the time to come forward with real plans that protect both the state's citizens and its longer-term financial outlook.
Keep education promise
School funding provides the clearest example of how the Senate budgeted with an eye to the future.
Without use of stimulus money, the $7,316 per-pupil foundation grant for schools would have to be cut about $510 (or 7%), according to calculations from the Citizens Research Council of Michigan. Granholm recommended a $59 cut per pupil in February; the Senate passed a cut of $110 per pupil, combined with $238-million worth of cuts in other school-related budget categories.
Using all of the remaining stimulus money allocated for education might allow the grant to be kept nearly steady next year, but that means school districts could face the full $510 cut -- or more, if tax revenues continue to decline -- all at once a year from now.
It makes far more sense to ease into cutbacks, while saving a little to cushion the blow in the following year. Similar calculations should hold for most other state operations.
Unfortunately, Michigan has no major programs that it can simply drop. Universities, prisons, health care and services for the poor make up almost the entirety of the general fund budget. The School Aid Fund, which is even bigger, supports K-12 education.
Two of the newest major program expansions, both of which are Granholm initiatives that the Senate budget kills, are Michigan Promise grants to help high school graduates cover the first two years of higher education and expanded preschool.
Agree or disagree with Granholm's priorities -- and she has the right instincts on education -- it is dishonorable to abandon the commitment made to college students. Lawmakers should look elsewhere for cuts, in order to sustain the Promise "promise." Changes in the program, if deemed essential to Michigan's long-term solvency, should be done with enough lead time so that the state isn't breaking its word to students.
But to survive and thrive in the 21st Century, the state needs to maintain this kind of investment in human capital -- the rising generations on whose continuing education the state depends for economic progress. Abandoning preschoolers will just as surely jeopardize the drive to make this a smarter, better-off state.
Nickels and dimes won't do
There's no doubt most other government services will have to take cuts, whether it's paring welfare benefits, hacking at revenue sharing with cities and townships, continuing to downsize the state's overbuilt prisons and pruning rates paid to anyone who treats Medicaid patients, as Granholm did in May with an executive order that sliced payments to doctors and nursing homes by 4%.
Some cuts, however, do fall into the penny-ante category and will do more harm than good. Returning wetlands regulation to the federal government and scattering the state archives, as part of the breakup of the Department of History, Arts and Libraries, for example, each get the state less than 0.1% closer to closing the budget gap. Yet diminishing the state's history and ignoring Michigan's singularly keen need to protect wetlands will cause indisputable harm and inconvenience for years to come.
Granholm, in particular, seems to prefer such minor actions -- including tax increases in many nearly invisible areas -- to sweeping change. Some are reasonable, such as her proposal to increase liquor license fees and to end some tax exemptions. But Michigan's overall problems are beyond most nickel-and-dime remedies.
Somehow, the governor and the legislative leaders must patch together a budget for the coming year. Yes, there will be blood. And maybe that's what it will take for everyone to realize that what the state most needs is a long-term restructuring -- in taxes, in health care, in incarceration policy, and more -- if the state is to have a long-term future.
Written by Detroit Free Press on Sunday, August 30, 2009
Monday, August 24, 2009
State Constitutional Conventions
Calls Grow for Constitutional Convention
New York Times
Few New Yorkers would disagree that the state's politics are broken. Even fewer are the number of proposed fixes that have actually become law. Now in the weeks since a partisan power struggle in the state Senate brought New York’s government to new heights of chaos, a growing chorus is calling for a more radical approach: a constitutional convention to rewrite the state’s very political DNA.
*******************************************
Michigan Voters Will Vote in 2010 On Constitutional Convention
Michigan's Constitution calls for a vote by the people every 16 years as to whether we should have a con con. 2010 is the year for the most recent vote. Voters have always turned this down at the ballot box, but with all the problems facing Michigan will the Michigan voter again turn down this opportunity to "rewrite the state's very political DNA"?
New York Times
Few New Yorkers would disagree that the state's politics are broken. Even fewer are the number of proposed fixes that have actually become law. Now in the weeks since a partisan power struggle in the state Senate brought New York’s government to new heights of chaos, a growing chorus is calling for a more radical approach: a constitutional convention to rewrite the state’s very political DNA.
*******************************************
Michigan Voters Will Vote in 2010 On Constitutional Convention
Michigan's Constitution calls for a vote by the people every 16 years as to whether we should have a con con. 2010 is the year for the most recent vote. Voters have always turned this down at the ballot box, but with all the problems facing Michigan will the Michigan voter again turn down this opportunity to "rewrite the state's very political DNA"?
Universities and Tuition
CA: Judge to hear arguments seeking to overturn tuition increases
A California judge has denied a temporary restraining order that would block a tuition increase at colleges and universities in the California State University System (CSU). A lawsuit filed in state court alleges that the university entered into a contract with students by telling them in May that they could enroll at an approved tuition level and then broke the contract by increasing tuition by 20 percent in July. CSU maintains that it gave students adequate notice in May that tuition rates were subject to change. The judge has agreed to hear arguments on the case later this month.
The San Francisco Chronicle (Date posted: August 18, 2009)
A California judge has denied a temporary restraining order that would block a tuition increase at colleges and universities in the California State University System (CSU). A lawsuit filed in state court alleges that the university entered into a contract with students by telling them in May that they could enroll at an approved tuition level and then broke the contract by increasing tuition by 20 percent in July. CSU maintains that it gave students adequate notice in May that tuition rates were subject to change. The judge has agreed to hear arguments on the case later this month.
The San Francisco Chronicle (Date posted: August 18, 2009)
Friday, August 21, 2009
10 Commandments for Politicians
From Mark McKinnon at Public Strategies Inc.:
Ten Commandments for politicians:
1. Don’t lie
2. Don’t cheat
3. Don’t have affairs with aides
4. Don’t hire relatives of aides’ with whom you are having an affair
5. Don’t claim immunity because your activity is not technically prosecutable
6. Don’t use government aircraft for dangerous liaisons
7. Don’t hike the Appalachian Trail
8. Don’t go looking for that “sparking thing”
9. Don't make foreign bed chambers a rationale for chamber of commerce trips
10. Do resign when found guilty of any of the above
Not bad. What about a second 10 commandments? Any ideas? Go for the top 20 Commandments.
Ten Commandments for politicians:
1. Don’t lie
2. Don’t cheat
3. Don’t have affairs with aides
4. Don’t hire relatives of aides’ with whom you are having an affair
5. Don’t claim immunity because your activity is not technically prosecutable
6. Don’t use government aircraft for dangerous liaisons
7. Don’t hike the Appalachian Trail
8. Don’t go looking for that “sparking thing”
9. Don't make foreign bed chambers a rationale for chamber of commerce trips
10. Do resign when found guilty of any of the above
Not bad. What about a second 10 commandments? Any ideas? Go for the top 20 Commandments.
Thursday, August 20, 2009
One Year From Now
Hold your breath. This time, this month, this week, this hour next August we will know who is the Republican and Democratic nominee for Governor! Not to mention for the Michigan Senate and House general election candidates will be finalized. The primary is over and we are in the general election. One year from now we are heavy into partisan sniping, attacks, mistruths and multi media advertising. Oh goody. Can't wait.
Gun Control and The States
The columnist Dionne wrote this today in the Washington Post:
"Try a thought experiment: What would conservatives have said if a group of loud, scruffy leftists had brought guns to the public events of Ronald Reagan or George W. Bush?
How would our friends on the right have reacted to someone at a Reagan or a Bush speech carrying a sign that read: "It is time to water the tree of liberty"? That would be a reference to Thomas Jefferson's declaration that the tree "must be refreshed from time to time with the blood of patriots and tyrants."
"Try a thought experiment: What would conservatives have said if a group of loud, scruffy leftists had brought guns to the public events of Ronald Reagan or George W. Bush?
How would our friends on the right have reacted to someone at a Reagan or a Bush speech carrying a sign that read: "It is time to water the tree of liberty"? That would be a reference to Thomas Jefferson's declaration that the tree "must be refreshed from time to time with the blood of patriots and tyrants."
Wednesday, August 19, 2009
Budget Delay for FY 2010
The new fiscal for Michigan begins in approximately 50 days and we still have no budget agreement between legislative leaders and the governor.
We have no agreement on what revenue sources we will use to provide addtional state revenue to avoid the devastating state budgets cuts needed to balance the budget. We have no agreement on what budget cuts should be made if we will not have new revenue or if we did get a revenue agreement.
K-12 schools start in about two weeks. Most universities begin classes in less than a week. Students who count on state funds via the Michigan Promise grants to help them pay their tuition and book bills each year do not know if they will get the funding--even though thousands of students built a budget for themselves that includes this crucial funding. There is no state budget and in fact the Michigan Senate cut all of the funding for this program.
Maybe we ought to have a constitutional amendment that says the legislature must stay in session, seven days a week, for the 60 days before the beginning of each fiscal year if they have not completed a balanced budget for that upcoming fiscal year. They cannot go home to their homes around Michigan but rather meet continuously in Lansing.
We have no agreement on what revenue sources we will use to provide addtional state revenue to avoid the devastating state budgets cuts needed to balance the budget. We have no agreement on what budget cuts should be made if we will not have new revenue or if we did get a revenue agreement.
K-12 schools start in about two weeks. Most universities begin classes in less than a week. Students who count on state funds via the Michigan Promise grants to help them pay their tuition and book bills each year do not know if they will get the funding--even though thousands of students built a budget for themselves that includes this crucial funding. There is no state budget and in fact the Michigan Senate cut all of the funding for this program.
Maybe we ought to have a constitutional amendment that says the legislature must stay in session, seven days a week, for the 60 days before the beginning of each fiscal year if they have not completed a balanced budget for that upcoming fiscal year. They cannot go home to their homes around Michigan but rather meet continuously in Lansing.
Saturday, August 15, 2009
One Day Legislature
Well the Michigan legislaure is coming into session for one day this week. No major issues to debate and vote on the floor because no major bills have been reported out of the committies.
They were not in session for most of July. Even the US Congress stayed in session during the month of July, only returning home in August for a brief amount of time to visit with their voters in their districts. With the tone of the "town hall meetings" they may have wished that they did stay in DC.
However, it seems with the state in such disarray and with no resolution of the current fiscal year deficit and the looming fiscal crisis starting Ocotber 1--FY 10/11, you would think that the Michigan legisalture would stay in session just to let the citizens of Michigan know that they are a full time legislature and they are continuing to try to resolve our fiscal problems. Hmmmmm.
They were not in session for most of July. Even the US Congress stayed in session during the month of July, only returning home in August for a brief amount of time to visit with their voters in their districts. With the tone of the "town hall meetings" they may have wished that they did stay in DC.
However, it seems with the state in such disarray and with no resolution of the current fiscal year deficit and the looming fiscal crisis starting Ocotber 1--FY 10/11, you would think that the Michigan legisalture would stay in session just to let the citizens of Michigan know that they are a full time legislature and they are continuing to try to resolve our fiscal problems. Hmmmmm.
Friday, August 14, 2009
State Tax Burden Comparisons
The following article appeared in Dome Magazine (July 2009). It is a very interesting comparison and argument on why the tax load or burden in each state is may not relevant to a lot of debates about economic development, job placement or tax increases/cuts. We all need to understand this before we make major reforms in Michigan's tax structure so that we can compete in this century and also so we can begin to get at intelligent choices in balancing our state budget--not to mention stopping the red ink from flowing. Read on:
by Lou GlazerJuly 10, 2009
In all of the five different tax rankings of the states that have been released recently, Michigan places in the middle. But each brings calls for Michigan to cut taxes so that it can be one of the lowest tax states in the country — the assumption being that the states with the lowest business taxes have the best economies.
There’s one problem with that assumption. It isn’t true!
The top-ranked states are not, by and large, the most prosperous states. This is true whether the focus is on overall state and local taxes, business taxes or even a broader measure of faithfulness to conservative economic policies. What these ranking clearly demonstrate is that low taxes are not a reliable path to high prosperity.
Two of the rankings — released by the Senate Fiscal Agency — using data from the statistical agencies of the federal government measure overall state and local total tax burden. On a per capita basis of the 10 lowest tax states, none is above the national average in per capita income. On a percent of personal income basis, only three of the 10 lowest tax states are above the national average in per capita income.
Overall tax burden is so irrelevant to prosperity that eight of the lowest per capita income tax states are also in the bottom 20 in per capita income. And of the lowest overall tax states based on percent of personal income, four are in the bottom 20 in per capita income.
Two of the rankings measure combined state and local business taxes. The East Lansing-based Anderson Economic Group LLC (AEG) ranks states on business taxes as a share of profits. Only three of their 10 lowest business tax states were above the national average in per capita income. Five are in the bottom 20.
The Senate Fiscal Agency also released a ranking of state and local business tax burden as a percentage of private gross state product using data from Ernst & Young. Unlike the AEG report, this report measures Michigan with the new MBT, including the surcharge. Michigan ranks 22nd. So even with the much reviled MBT with a surcharge, Michigan is not a high business tax state!
Because of a tie there are 11 states in their ranking of the lowest 10 business tax states. Six of them are above the national average in per capita income. But once again, business tax burden is so unreliable as a path to high prosperity that four of their low-tax 10 are also in the bottom 20 in per capita income.
Finally, the Senate Finance Committee recently heard testimony from the American Legislative Exchange Council (ALEC) on their Rich States, Poor States report. It ranks states on their fidelity to ALEC’s conservative economic policy agenda — a combination of low taxes, less government spending and regulation, and weak unions. It then claims that the states that most faithfully follow their policy agenda have the best economies.
Once again, not true. Of their top 10 states, only four are above the national average in per capita income. Four are in the bottom 20 in per capita income.
So if low taxes are unreliable in determining which states are rich and which are poor, what does predict prosperity? The most reliable indicator is college education attainment. In our work at Michigan Future, Inc. we have found that, by far, the best predictor of a state’s prosperity is the proportion of adults with a four-year degree or more.
The power of college attainment as a predictor of prosperity can be seen when you look at the top 10 states in proportion of adults with a four-year degree. Nine are above the national average in per capita income — all are in the top 12 and none is in the bottom 20.
Clearly, the states with the highest college attainment are more prosperous than those with the lowest overall or business taxes. The ranking that matters most to our future prosperity is that Michigan is 34th in the proportion of adults with a four-year degree.
A prosperous Michigan depends most on preparing, retaining and attracting talent. That’s what policy makers and candidates should be debating. Because if we don’t get better educated, we will be a poor state.
Lou Glazer is president of Michigan Future Inc., an Ann Arbor think tank that focuses on how the state can succeed in a knowledge-based economy.
by Lou GlazerJuly 10, 2009
In all of the five different tax rankings of the states that have been released recently, Michigan places in the middle. But each brings calls for Michigan to cut taxes so that it can be one of the lowest tax states in the country — the assumption being that the states with the lowest business taxes have the best economies.
There’s one problem with that assumption. It isn’t true!
The top-ranked states are not, by and large, the most prosperous states. This is true whether the focus is on overall state and local taxes, business taxes or even a broader measure of faithfulness to conservative economic policies. What these ranking clearly demonstrate is that low taxes are not a reliable path to high prosperity.
Two of the rankings — released by the Senate Fiscal Agency — using data from the statistical agencies of the federal government measure overall state and local total tax burden. On a per capita basis of the 10 lowest tax states, none is above the national average in per capita income. On a percent of personal income basis, only three of the 10 lowest tax states are above the national average in per capita income.
Overall tax burden is so irrelevant to prosperity that eight of the lowest per capita income tax states are also in the bottom 20 in per capita income. And of the lowest overall tax states based on percent of personal income, four are in the bottom 20 in per capita income.
Two of the rankings measure combined state and local business taxes. The East Lansing-based Anderson Economic Group LLC (AEG) ranks states on business taxes as a share of profits. Only three of their 10 lowest business tax states were above the national average in per capita income. Five are in the bottom 20.
The Senate Fiscal Agency also released a ranking of state and local business tax burden as a percentage of private gross state product using data from Ernst & Young. Unlike the AEG report, this report measures Michigan with the new MBT, including the surcharge. Michigan ranks 22nd. So even with the much reviled MBT with a surcharge, Michigan is not a high business tax state!
Because of a tie there are 11 states in their ranking of the lowest 10 business tax states. Six of them are above the national average in per capita income. But once again, business tax burden is so unreliable as a path to high prosperity that four of their low-tax 10 are also in the bottom 20 in per capita income.
Finally, the Senate Finance Committee recently heard testimony from the American Legislative Exchange Council (ALEC) on their Rich States, Poor States report. It ranks states on their fidelity to ALEC’s conservative economic policy agenda — a combination of low taxes, less government spending and regulation, and weak unions. It then claims that the states that most faithfully follow their policy agenda have the best economies.
Once again, not true. Of their top 10 states, only four are above the national average in per capita income. Four are in the bottom 20 in per capita income.
So if low taxes are unreliable in determining which states are rich and which are poor, what does predict prosperity? The most reliable indicator is college education attainment. In our work at Michigan Future, Inc. we have found that, by far, the best predictor of a state’s prosperity is the proportion of adults with a four-year degree or more.
The power of college attainment as a predictor of prosperity can be seen when you look at the top 10 states in proportion of adults with a four-year degree. Nine are above the national average in per capita income — all are in the top 12 and none is in the bottom 20.
Clearly, the states with the highest college attainment are more prosperous than those with the lowest overall or business taxes. The ranking that matters most to our future prosperity is that Michigan is 34th in the proportion of adults with a four-year degree.
A prosperous Michigan depends most on preparing, retaining and attracting talent. That’s what policy makers and candidates should be debating. Because if we don’t get better educated, we will be a poor state.
Lou Glazer is president of Michigan Future Inc., an Ann Arbor think tank that focuses on how the state can succeed in a knowledge-based economy.
Tuesday, August 11, 2009
More Bad Economic News for Michigan
The bad news continues for Michigan. The following story is more evidence that Michigan must pay attention to reforming its tax laws. There have been repeated calls for many, many different types of reforms but the Governor and the Legislture have yet to get serious about proposals. It is expected that they will get busy this Fall and look at tax revenue, tax structure and further budget cuts.
Mich. tax revenue in July $50M less than expected
Mark Hornbeck / Detroit News Lansing Bureau
Lansing -- A top state economist says the tax collections report for July due out Tuesday will show the state is another $50 million short, adding up to a $170 million deficit for the year.
The economy is crawling at an even slower pace than state fiscal experts estimated in May, meaning federal stimulus money likely will be used to patch the hole in the budget year that ends Sept. 30.
"You never know what's going to happen the next three months. Revenues could rebound," said Jay Wortley, senior economist for the Senate Fiscal Agency, the financial arm of the state Senate. "But right now, the economy is weaker than we thought it would be and it's affecting almost everything, particularly income and sales taxes."
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While details aren't available from the Treasury until Tuesday, indications are that consumer spending and business activity are slower than projected, Wortley said, and income tax revenue is down due to high unemployment.
Should Gov. Jennifer Granholm and state lawmakers make ends meet by tapping federal recovery cash, there will be less available for the next budget that begins Oct. 1.
The shortfall in the general fund, the state's main checking account, for next year will be $1.8 billion, the Senate Fiscal Agency estimates. Tax receipts for the school aid fund will be nearly $1 billion low, so the state is looking at an overall shortfall of $2.7 billion to $2.8 billion, Wortley said.
Granholm and legislative leaders are meeting weekly behind closed doors to try to resolve next year's budget with a combination of program cuts, tax or fee increases and stimulus money.
Wortley says the downward trend "is adding up to big numbers" that are hurting the state budget.
Senate Fiscal Agency director Gary Olson said earlier that the economy isn't entirely to blame for the continued drop in tax revenues.
Money collected for the general fund and the school aid fund are falling much faster than the state economy is shrinking, in part because residents and successful businesses are shelling out a smaller proportion of their personal income to the state, Olson said.
"The revenue as a percent of personal income has just been plummeting," said Olson, who has headed the nonpartisan agency for 18 years. "These are very, very significant declines."
The percentage of their personal income that state residents and profitable businesses pay in state taxes has dropped over a full percentage point since hitting a high of 8.4 percent in the mid- and late 1990s. So far this fiscal year, the rate is 7.3 percent.
Residents aren't necessarily paying fewer tax dollars. But as their incomes have risen, they're giving the state a smaller proportion of their money -- 2 full percentage points less than they did a decade ago, Olson said.
Much of the reason for the drop is that Michigan has been cutting taxes and adding exemptions, essentially forcing state government to shrink. That's a welcome move to some, but a concern to others who worry the state is cutting too deeply into services such as education, policing and the safety net for the poor.
The state tax system also has failed to change as taxpayers' behavior has changed. Consumers are spending less of their personal income on sales taxes, for instance, because they're buying fewer goods, which are taxed, and more services, which are not.
"Our tax system, for a variety of reasons, is not keeping up with the economy," Olson said. "Part of it is tax cuts, but part of it is that we are not taxing things that are growing in the economy."
The Associated Press contributed to this report.
Mich. tax revenue in July $50M less than expected
Mark Hornbeck / Detroit News Lansing Bureau
Lansing -- A top state economist says the tax collections report for July due out Tuesday will show the state is another $50 million short, adding up to a $170 million deficit for the year.
The economy is crawling at an even slower pace than state fiscal experts estimated in May, meaning federal stimulus money likely will be used to patch the hole in the budget year that ends Sept. 30.
"You never know what's going to happen the next three months. Revenues could rebound," said Jay Wortley, senior economist for the Senate Fiscal Agency, the financial arm of the state Senate. "But right now, the economy is weaker than we thought it would be and it's affecting almost everything, particularly income and sales taxes."
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While details aren't available from the Treasury until Tuesday, indications are that consumer spending and business activity are slower than projected, Wortley said, and income tax revenue is down due to high unemployment.
Should Gov. Jennifer Granholm and state lawmakers make ends meet by tapping federal recovery cash, there will be less available for the next budget that begins Oct. 1.
The shortfall in the general fund, the state's main checking account, for next year will be $1.8 billion, the Senate Fiscal Agency estimates. Tax receipts for the school aid fund will be nearly $1 billion low, so the state is looking at an overall shortfall of $2.7 billion to $2.8 billion, Wortley said.
Granholm and legislative leaders are meeting weekly behind closed doors to try to resolve next year's budget with a combination of program cuts, tax or fee increases and stimulus money.
Wortley says the downward trend "is adding up to big numbers" that are hurting the state budget.
Senate Fiscal Agency director Gary Olson said earlier that the economy isn't entirely to blame for the continued drop in tax revenues.
Money collected for the general fund and the school aid fund are falling much faster than the state economy is shrinking, in part because residents and successful businesses are shelling out a smaller proportion of their personal income to the state, Olson said.
"The revenue as a percent of personal income has just been plummeting," said Olson, who has headed the nonpartisan agency for 18 years. "These are very, very significant declines."
The percentage of their personal income that state residents and profitable businesses pay in state taxes has dropped over a full percentage point since hitting a high of 8.4 percent in the mid- and late 1990s. So far this fiscal year, the rate is 7.3 percent.
Residents aren't necessarily paying fewer tax dollars. But as their incomes have risen, they're giving the state a smaller proportion of their money -- 2 full percentage points less than they did a decade ago, Olson said.
Much of the reason for the drop is that Michigan has been cutting taxes and adding exemptions, essentially forcing state government to shrink. That's a welcome move to some, but a concern to others who worry the state is cutting too deeply into services such as education, policing and the safety net for the poor.
The state tax system also has failed to change as taxpayers' behavior has changed. Consumers are spending less of their personal income on sales taxes, for instance, because they're buying fewer goods, which are taxed, and more services, which are not.
"Our tax system, for a variety of reasons, is not keeping up with the economy," Olson said. "Part of it is tax cuts, but part of it is that we are not taxing things that are growing in the economy."
The Associated Press contributed to this report.
Ethics Board For Legislature and other Professions
The following story describes a situation where an investigation of the behaviour of two State Senators done by their staff found both Senators "innocent". This is a staff that works for the Senate and their eventual jobs may depend on these Senators. Maybe the state should look at all of the various ethics boards or commissions and make sure that the membership is not made up of the people who are regulated by the ethics board or are paid by the individual professional being investigated. This should also include the prohibition of members of the same profession serving on the ethics board for the profession that they govern. Doctors, lawyers, judges, nurses, etc., all have a majority of their profession on their ethics boards or commissions.
Here is the news report on the Senators:
LANSING — A state Senate investigation into a heated exchange between two members in a Capitol elevator June 17 found “insufficient evidence” of behavior that would require disciplinary action, Senate Majority Leader Mike Bishop, R-Rochester, announced today.
triggerAd(1,PaginationPage,2);
Bishop, in a letter sent to Sen. Irma Clark-Coleman, D-Detroit, said he would not take any formal action against Sen. Roger Kahn, R-Saginaw, who Clark-Coleman had accused of acting in a threatening manner toward her during an argument over state spending.
An investigation of the incident by Senate staff concluded the two had a loud and angry, and brief, confrontation. But there was little evidence beyond Clark-Coleman’s assertion that Kahn had given his colleague reason to be fearful, the report said.
Clark-Coleman told investigators Kahn was so angry he “looked like a blowfish” and that she feared he would strike her during the exchange. But other witnesses — there were two other senators and an aide in the elevator — said that, while both Kahn and Clark-Coleman were extremely agitated, the encounter did not appear to verge on violence.
The two senators clashed after a committee hearing in which the Republican majority voted to cut funding for Wayne County’s community mental health programs. Clark-Coleman said the vote was heartless and discriminatory.
End of Story......
Here is the news report on the Senators:
LANSING — A state Senate investigation into a heated exchange between two members in a Capitol elevator June 17 found “insufficient evidence” of behavior that would require disciplinary action, Senate Majority Leader Mike Bishop, R-Rochester, announced today.
triggerAd(1,PaginationPage,2);
Bishop, in a letter sent to Sen. Irma Clark-Coleman, D-Detroit, said he would not take any formal action against Sen. Roger Kahn, R-Saginaw, who Clark-Coleman had accused of acting in a threatening manner toward her during an argument over state spending.
An investigation of the incident by Senate staff concluded the two had a loud and angry, and brief, confrontation. But there was little evidence beyond Clark-Coleman’s assertion that Kahn had given his colleague reason to be fearful, the report said.
Clark-Coleman told investigators Kahn was so angry he “looked like a blowfish” and that she feared he would strike her during the exchange. But other witnesses — there were two other senators and an aide in the elevator — said that, while both Kahn and Clark-Coleman were extremely agitated, the encounter did not appear to verge on violence.
The two senators clashed after a committee hearing in which the Republican majority voted to cut funding for Wayne County’s community mental health programs. Clark-Coleman said the vote was heartless and discriminatory.
End of Story......
Monday, August 10, 2009
Mental Health Cuts
Governor Granholm has proposed cutting $40 million from non Medicaid community mental health programs.
The Senate passed a 2009-10 budget that cut $61.8 million from that budget--$21 million more than the Governor proposed.
The state is trying to cut $1.8 billion from the 09-10 budget that must be finalized before October 1st when the new sate fiscal year begins. Some believe the deficit will grow to over $2 billion before the budget gets finalized.
This year the state will spend $332 million to fund the 46 community mental health srvice providers that deliver treatment. in 2008 more than 230,00 Michigan citizens were helped through these programs.
Many are concerned that as unemployment soars (over 15%) more mental health needs will be confronted by local communities and people may leave people with unmet mental health needs.
The Senate passed a 2009-10 budget that cut $61.8 million from that budget--$21 million more than the Governor proposed.
The state is trying to cut $1.8 billion from the 09-10 budget that must be finalized before October 1st when the new sate fiscal year begins. Some believe the deficit will grow to over $2 billion before the budget gets finalized.
This year the state will spend $332 million to fund the 46 community mental health srvice providers that deliver treatment. in 2008 more than 230,00 Michigan citizens were helped through these programs.
Many are concerned that as unemployment soars (over 15%) more mental health needs will be confronted by local communities and people may leave people with unmet mental health needs.
Sunday, August 9, 2009
Michigan's Tax Structure Needs Reform and Sate will have 24% less revenue in 2010 FY.
(AP)
Senate Fiscal Agency director Gary Olson says money collected both for the general fund and the school aid fund are falling much faster than the state economy is shrinking, in part because residents and successful businesses are shelling out a smaller proportion of their personal income to the state.
"The revenue as a percent of personal income has just been plummeting," says Olson, who has headed the nonpartisan agency for 18 years. "These are very, very significant declines."
The percentage of their personal income that state residents and profitable businesses pay in state taxes has dropped over a full percentage point since hitting a high of 8.4 percent in the mid- and late 1990s. So far this fiscal year, the rate is 7.3 percent.
Residents aren't necessarily paying fewer tax dollars. But as their incomes have risen, they're giving the state a smaller proportion of their money -- 2 full percentage points less than they did a decade ago, Olson says.
Much of the reason for the drop is that Michigan has been cutting taxes and adding exemptions, essentially forcing state government to shrink. That's a welcome move to some, but a concern to others who worry the state is cutting too deeply into services such as education, policing and the safety net for the poor.
The state tax system also has failed to change as taxpayers' behavior has changed. Consumers are spending less of their personal income on sales taxes, for instance, because they're buying fewer goods, which are taxed, and more services, which are not.
"Our tax system, for a variety of reasons, is not keeping up with the economy," Olson says. "Part of it is tax cuts, but part of it is that we are not taxing things that are growing in the economy."
A number of public policy groups have been studying Michigan's tax structure, and a consensus is forming that some type of change is needed.
Among the possibilities being discussed so far: Dropping the overall sales tax rate and extending it to services; changing to a graduated income tax that would collect a higher percentage from the better-off; and changing the gasoline tax to generate more money for roads and bridges.
The revenue drop-off has contributed to the state's growing budget hole. Gov. Jennifer Granholm and state lawmakers have cut more than $400 million from the current budget and must find a way to make up a $2.7 billion shortfall in the budget year that starts Oct. 1, with a $1.8 billion deficit in the general fund and a $900 million shortfall in school aid fund.
Much of the deficit likely will be filled with federal recovery dollars. But those dollars disappear in 2011, when the state is expected to be facing an even bigger deficit.It's already in serious trouble because tax revenues have fallen dramatically in the past two years.
In the 2007-08 fiscal year, the state netted $9.4 billion for the general fund, its main checkbook. But it's expected to get 24 percent less in the budget year that starts Oct. 1. Net revenue for K-12 schools is expected to drop about 8 percent, to around $12.1 billion in the next fiscal year.
That means $3.2 billion less is being collected than two years ago for state programs ranging from prisons to child protection to K-12 schools and help for seniors, universities and local governments.
A 1978 constitutional amendment caps state spending at 9.49 percent of personal income, but tax revenue has dropped so low, the state could spend $7.5 billion more without hitting the limit, Olson says.
"These are very, very significant declines in revenues," he says. "There's been a pretty dramatic downsizing of state government."
He warns that, even when the economy improves, state revenues won't keep up with the growing prosperity.
State Sen. Gilda Jacobs, the ranking Democrat on the Senate Finance Committee, is starting to hold public hearings around the state to explain to voters that Michigan must change its tax structure if it's going to be able to support its schools, universities and state services in the years ahead.
"It's hard to go and tell people we really don't have a high tax burden when ... people are reeling from the effects of this bad economy," the Huntington Woods lawmaker said. "But if we're really going to be honest about how we're going to fix things, we need ... to give the people the correct facts so that when we do make changes, they'll understand."
House Republican Leader Kevin Elsenheimer of Kewadin agrees the state needs to revise its tax structure, but not as a way to solve the upcoming year's budget troubles.
"As we found out two years ago, it can be very messy, even disastrous, to try to solve budget problems through changes in tax policy," he said, referring to 2007 tax increases passed in a rush in the middle of the night to avoid a government shutdown. "Let's get the budget done and then start focusing on these major reforms."
Mike Boulus of the Presidents Council, which represents Michigan's 15 state universities, says the state needs to look beyond the quick fixes of its recent budget deals, and even beyond the proposals for the upcoming budget to close tax loopholes and cut spending.
"That might get us through this year, but it won't get us through next," Boulus said. "At what point do you deal with the broader issue of restructuring our whole system? Our tax system needs to be addressed."
On Wednesday, 27 of the state's human service advocacy groups ranging from the Michigan Catholic Conference to the Food Bank Council of Michigan and Michigan's Children warned Granholm and lawmakers that any more cuts to the state's safety net would leave many Michigan families without the resources to get by.
Jacobs said she's telling constituents about the options that could help Michigan change its tax structure to meet its future needs, and hopes taxpayers and her fellow lawmakers realize that trying to move forward with the current tax structure isn't going to work.
"We need to have a tax structure that is responsive to a growing economy. We don't have that right now," she says.
***********
Many of these tax structure issues will have to be put on the ballot for a vote of the people. There is a big push for a graduated income tax instead of our flat tax in Michigan. Others seem to be willing to go to a lower sales tax rate and a new tax rate for a new service tax, but in exchange want Michigan's corporate tax, the Michigan Business Tax, eliminated. So lots of big, big revenue/tax issues for the legislature to debate. They do not return to session until after Labor Day and have not left themselves much time to resolve these huge issues--not to mention time to convince Michigan voters to support these tax reforms when they are on the ballot in 2010. Todays legislature's method of having all issues debated and resolve only via Legislative Leadership and leaving the vast majority of legislators out of the debate is not suited to getting a consensus that will then go back home to the neighborhoods and sell the reforms to the voters.
Senate Fiscal Agency director Gary Olson says money collected both for the general fund and the school aid fund are falling much faster than the state economy is shrinking, in part because residents and successful businesses are shelling out a smaller proportion of their personal income to the state.
"The revenue as a percent of personal income has just been plummeting," says Olson, who has headed the nonpartisan agency for 18 years. "These are very, very significant declines."
The percentage of their personal income that state residents and profitable businesses pay in state taxes has dropped over a full percentage point since hitting a high of 8.4 percent in the mid- and late 1990s. So far this fiscal year, the rate is 7.3 percent.
Residents aren't necessarily paying fewer tax dollars. But as their incomes have risen, they're giving the state a smaller proportion of their money -- 2 full percentage points less than they did a decade ago, Olson says.
Much of the reason for the drop is that Michigan has been cutting taxes and adding exemptions, essentially forcing state government to shrink. That's a welcome move to some, but a concern to others who worry the state is cutting too deeply into services such as education, policing and the safety net for the poor.
The state tax system also has failed to change as taxpayers' behavior has changed. Consumers are spending less of their personal income on sales taxes, for instance, because they're buying fewer goods, which are taxed, and more services, which are not.
"Our tax system, for a variety of reasons, is not keeping up with the economy," Olson says. "Part of it is tax cuts, but part of it is that we are not taxing things that are growing in the economy."
A number of public policy groups have been studying Michigan's tax structure, and a consensus is forming that some type of change is needed.
Among the possibilities being discussed so far: Dropping the overall sales tax rate and extending it to services; changing to a graduated income tax that would collect a higher percentage from the better-off; and changing the gasoline tax to generate more money for roads and bridges.
The revenue drop-off has contributed to the state's growing budget hole. Gov. Jennifer Granholm and state lawmakers have cut more than $400 million from the current budget and must find a way to make up a $2.7 billion shortfall in the budget year that starts Oct. 1, with a $1.8 billion deficit in the general fund and a $900 million shortfall in school aid fund.
Much of the deficit likely will be filled with federal recovery dollars. But those dollars disappear in 2011, when the state is expected to be facing an even bigger deficit.It's already in serious trouble because tax revenues have fallen dramatically in the past two years.
In the 2007-08 fiscal year, the state netted $9.4 billion for the general fund, its main checkbook. But it's expected to get 24 percent less in the budget year that starts Oct. 1. Net revenue for K-12 schools is expected to drop about 8 percent, to around $12.1 billion in the next fiscal year.
That means $3.2 billion less is being collected than two years ago for state programs ranging from prisons to child protection to K-12 schools and help for seniors, universities and local governments.
A 1978 constitutional amendment caps state spending at 9.49 percent of personal income, but tax revenue has dropped so low, the state could spend $7.5 billion more without hitting the limit, Olson says.
"These are very, very significant declines in revenues," he says. "There's been a pretty dramatic downsizing of state government."
He warns that, even when the economy improves, state revenues won't keep up with the growing prosperity.
State Sen. Gilda Jacobs, the ranking Democrat on the Senate Finance Committee, is starting to hold public hearings around the state to explain to voters that Michigan must change its tax structure if it's going to be able to support its schools, universities and state services in the years ahead.
"It's hard to go and tell people we really don't have a high tax burden when ... people are reeling from the effects of this bad economy," the Huntington Woods lawmaker said. "But if we're really going to be honest about how we're going to fix things, we need ... to give the people the correct facts so that when we do make changes, they'll understand."
House Republican Leader Kevin Elsenheimer of Kewadin agrees the state needs to revise its tax structure, but not as a way to solve the upcoming year's budget troubles.
"As we found out two years ago, it can be very messy, even disastrous, to try to solve budget problems through changes in tax policy," he said, referring to 2007 tax increases passed in a rush in the middle of the night to avoid a government shutdown. "Let's get the budget done and then start focusing on these major reforms."
Mike Boulus of the Presidents Council, which represents Michigan's 15 state universities, says the state needs to look beyond the quick fixes of its recent budget deals, and even beyond the proposals for the upcoming budget to close tax loopholes and cut spending.
"That might get us through this year, but it won't get us through next," Boulus said. "At what point do you deal with the broader issue of restructuring our whole system? Our tax system needs to be addressed."
On Wednesday, 27 of the state's human service advocacy groups ranging from the Michigan Catholic Conference to the Food Bank Council of Michigan and Michigan's Children warned Granholm and lawmakers that any more cuts to the state's safety net would leave many Michigan families without the resources to get by.
Jacobs said she's telling constituents about the options that could help Michigan change its tax structure to meet its future needs, and hopes taxpayers and her fellow lawmakers realize that trying to move forward with the current tax structure isn't going to work.
"We need to have a tax structure that is responsive to a growing economy. We don't have that right now," she says.
***********
Many of these tax structure issues will have to be put on the ballot for a vote of the people. There is a big push for a graduated income tax instead of our flat tax in Michigan. Others seem to be willing to go to a lower sales tax rate and a new tax rate for a new service tax, but in exchange want Michigan's corporate tax, the Michigan Business Tax, eliminated. So lots of big, big revenue/tax issues for the legislature to debate. They do not return to session until after Labor Day and have not left themselves much time to resolve these huge issues--not to mention time to convince Michigan voters to support these tax reforms when they are on the ballot in 2010. Todays legislature's method of having all issues debated and resolve only via Legislative Leadership and leaving the vast majority of legislators out of the debate is not suited to getting a consensus that will then go back home to the neighborhoods and sell the reforms to the voters.
Saturday, August 8, 2009
Ballot Initiatives: bypassing the legislature
The Michigan Democratic Party is proposing a series of ballot initiatives and is looking to put some or all of them on the ballot in 2010. The highlight of this proposal is a $10 minimum wage (currently $7.40)--which would make the Michigan minimum wage the highest in the nation. This would be a 35 percent increase. The ballot proposals would bypass the legislature and go directly to the people in 2010.
Which ballot proposals to pursue for the ballot would be picked via an online survey and/or a statewide poll.
The Michigan Chamber of Commerce, called the proposals "anti-jobs, anti-growth" and said they may be used by economic development directors in other Midwestern states to discourage businesses from locating or expanding in Michigan.
The Democratic Party ballot proposals include:
• Require all employers to provide health coverage or pay a fine.
• Increase unemployment benefits by $100 a week, extend benefits by six months and make all workers eligible for unemployment. The maximum unemployment benefit is now $387 a week.
• Cut utility rates by 20 percent.
• Impose a one-year moratorium on home foreclosures.
Many believe that the Democratic Party will only circulate petitions to put one or two proposals on the ballot--after polling. Circulating of the petitions for signatures would start in early 2010.
Many Republicans feel that the Democratic Party is just trying to get the base Democratic vote excited and interested enough to increase their party vote in the 2010 elections.
This proposal also reflects the increasing disappointment in the legislature's ability to get "the job done" or to make difficult or controversial decisions--especially in an upcoming election year when the entire House, Senate, the Governor position, the Attorney General and Secretary of State positions are all up for election in 2010 (with no incumbents on the ballot, except in the House, and eight in the Senate). Due to term limits only 8 of 38 State Senators would be returning after the November 2010 election, so 30 senate seats are open and control of the Senate could change with this many vacancies.
Michigan could see a ballot that looks like the California ballot--long, complicated and multiple ballot proposals. Other groups are also considering ballot questions and are planning to circulate petitions: tax reform (service tax, repeal of Michigan Business tax, graduated income tax, etc), same sex marriage, right to counsel funding, etc., etc..
Looks like 2010 might be a good year for pollsters, campaign managers and staff, public relations companies and lobbyists. So what is new?
Which ballot proposals to pursue for the ballot would be picked via an online survey and/or a statewide poll.
The Michigan Chamber of Commerce, called the proposals "anti-jobs, anti-growth" and said they may be used by economic development directors in other Midwestern states to discourage businesses from locating or expanding in Michigan.
The Democratic Party ballot proposals include:
• Require all employers to provide health coverage or pay a fine.
• Increase unemployment benefits by $100 a week, extend benefits by six months and make all workers eligible for unemployment. The maximum unemployment benefit is now $387 a week.
• Cut utility rates by 20 percent.
• Impose a one-year moratorium on home foreclosures.
Many believe that the Democratic Party will only circulate petitions to put one or two proposals on the ballot--after polling. Circulating of the petitions for signatures would start in early 2010.
Many Republicans feel that the Democratic Party is just trying to get the base Democratic vote excited and interested enough to increase their party vote in the 2010 elections.
This proposal also reflects the increasing disappointment in the legislature's ability to get "the job done" or to make difficult or controversial decisions--especially in an upcoming election year when the entire House, Senate, the Governor position, the Attorney General and Secretary of State positions are all up for election in 2010 (with no incumbents on the ballot, except in the House, and eight in the Senate). Due to term limits only 8 of 38 State Senators would be returning after the November 2010 election, so 30 senate seats are open and control of the Senate could change with this many vacancies.
Michigan could see a ballot that looks like the California ballot--long, complicated and multiple ballot proposals. Other groups are also considering ballot questions and are planning to circulate petitions: tax reform (service tax, repeal of Michigan Business tax, graduated income tax, etc), same sex marriage, right to counsel funding, etc., etc..
Looks like 2010 might be a good year for pollsters, campaign managers and staff, public relations companies and lobbyists. So what is new?
New Taxes
Michigan Chamber of Commerce, the largest business advocacy group in Michigan, has proposed raising the Michigan gasoline tax and vehicle registration fees. The increase would raise of $1.5 billion a year for road construction/repairs and for mass transit improvements. The last time it was raised was in 1997.
Republicans in the legislature have said no new taxes. New taxes appear to be off the table as the legislature and the Governor negotiate the FY 2010 state budget (begins October 1, 2009). The Chamber and former Senate Republican Majority Leader Ken Sikkema have said that Republicans could still remain the party of fiscal restraint and tax increase resistance if they support this gas tax increase.
The gas tax and the vehicle registration revenue sure would put people back to work on road projects, bridges and mass transit repairs/expansions. Would also result in workers coming off of unemployment compensation and off public assistance.
Republicans in the legislature have said no new taxes. New taxes appear to be off the table as the legislature and the Governor negotiate the FY 2010 state budget (begins October 1, 2009). The Chamber and former Senate Republican Majority Leader Ken Sikkema have said that Republicans could still remain the party of fiscal restraint and tax increase resistance if they support this gas tax increase.
The gas tax and the vehicle registration revenue sure would put people back to work on road projects, bridges and mass transit repairs/expansions. Would also result in workers coming off of unemployment compensation and off public assistance.
Shutting Down Government
Interesting column written by Tim Skubic in Dome Magazine that says that there is a strong possibility that the legislative leaders might not get the FY 10 budget resolved by the beginning of the fiscal year--October 1, 2009 and thereby shutting down state government.
Skubic believes that the Speaker would allow this to happen to get the Governor to agree to his controversial legislation that reforms and merges all state health plans. The theory goes that after government shuts down on October 1st he goes to Granholm and offers to get her the votes in the House for the budget resolution IF she agrees to his reform plan (she is opposed now). State employee and K-12 school employee unions are fighting his plan very, very strongly but Granholm may have no choice but to go against the unions in order to get her budget completed.
Skubic believes that then Senate Majority Leader Bishop goes to the Governor and uses the same strategy to get her to agree to his tax reform plans.
Interesting theory--especially since Speaker Dillon is running for Governor in 2010 and Majority Leader Bishop is running for Attorney General in 2010.
Not sure how fighting with the unions helps Dillion get a victory in the 2010 August primary. Winning a Democratic primary election without union money and votes is very, very difficult. However, the government shutdown strategy might work for Bishop in a Republican primary.
Skubic might be on to something. Hmmmmmmm.
Skubic believes that the Speaker would allow this to happen to get the Governor to agree to his controversial legislation that reforms and merges all state health plans. The theory goes that after government shuts down on October 1st he goes to Granholm and offers to get her the votes in the House for the budget resolution IF she agrees to his reform plan (she is opposed now). State employee and K-12 school employee unions are fighting his plan very, very strongly but Granholm may have no choice but to go against the unions in order to get her budget completed.
Skubic believes that then Senate Majority Leader Bishop goes to the Governor and uses the same strategy to get her to agree to his tax reform plans.
Interesting theory--especially since Speaker Dillon is running for Governor in 2010 and Majority Leader Bishop is running for Attorney General in 2010.
Not sure how fighting with the unions helps Dillion get a victory in the 2010 August primary. Winning a Democratic primary election without union money and votes is very, very difficult. However, the government shutdown strategy might work for Bishop in a Republican primary.
Skubic might be on to something. Hmmmmmmm.
Monday, June 29, 2009
Tax Ballot Initiatives: The Legislature and The Governor
Michigan's legislature is considering to do tax reform by ballot initiative. They will attempt to do this before they adjourn in July. They will need a super majority to get this issue on the ballot. They want to attempt to complete this by the end of July because they want to reserve time if they fail to circulate petitions to Michigan voters to place on the ballot what the legislature could not get done with legislative votes. They will need 500,000 plus signatures to get it on the ballot--more signatures than required but they will need a safety net of signatures to buffer against disqualified signatures. They will need to get the signatures done by the end of August or so.
Tax issues to be considered for ballot presentation might include going from a flat tax to a graduated income tax. Eliminating the Michigan Business Tax Surcharge and the entire MBT. Replacing this with a service tax and changing the sales tax rate.
Will this be too much for Michigan citizens to consider and they will just vote no on matters that are too complicated or matters that they do not understand? Does the legislature and the Governor have the leadership and committment to spend the Fall explaining to the people why these tax reforms are good for Michigan citizens and how it will lead us to a more financially secure future? How is the legislature going to get bi-partisan votes to put this on the ballot
Other key questions are whether citizens or legislative ballot initiatives are good public policy? Do we want citizens voting on matters as complicated as tax reform or is this the job of the legislature and the Governor--should they buckly down, work together to fix the tax system and prepare for a new future economy? Isn't this what they are paid to do?
Tax issues to be considered for ballot presentation might include going from a flat tax to a graduated income tax. Eliminating the Michigan Business Tax Surcharge and the entire MBT. Replacing this with a service tax and changing the sales tax rate.
Will this be too much for Michigan citizens to consider and they will just vote no on matters that are too complicated or matters that they do not understand? Does the legislature and the Governor have the leadership and committment to spend the Fall explaining to the people why these tax reforms are good for Michigan citizens and how it will lead us to a more financially secure future? How is the legislature going to get bi-partisan votes to put this on the ballot
Other key questions are whether citizens or legislative ballot initiatives are good public policy? Do we want citizens voting on matters as complicated as tax reform or is this the job of the legislature and the Governor--should they buckly down, work together to fix the tax system and prepare for a new future economy? Isn't this what they are paid to do?
Tuesday, April 21, 2009
GUN CONTROL
GUN CONTROL AND STATES:
Governing.com reports the following:
"Court: Citizens Can Challenge State, Local Gun Laws
San Francisco Chronicle
A federal appeals court in San Francisco ruled that private citizens can challenge state and local gun laws—the first such ruling in the nation—while upholding a ban on firearms at gun shows at the Alameda County, Calif., fairgrounds. The ruling followed last year's landmark U.S. Supreme Court decision that the Second Amendment protects an individual's right to possess guns for self-defense.--end of news story."
Well this should cause alot of action in state courts and reintensify the control control and anti gun control folks at the local and state level. Obama folks do not seem incline to take on the issue of gun control at this time and that is proably a wise political decision. Not sure that this is an issue that will be a good use of local political capital--at this time of budget problems and revenue crisis.
Governing.com reports the following:
"Court: Citizens Can Challenge State, Local Gun Laws
San Francisco Chronicle
A federal appeals court in San Francisco ruled that private citizens can challenge state and local gun laws—the first such ruling in the nation—while upholding a ban on firearms at gun shows at the Alameda County, Calif., fairgrounds. The ruling followed last year's landmark U.S. Supreme Court decision that the Second Amendment protects an individual's right to possess guns for self-defense.--end of news story."
Well this should cause alot of action in state courts and reintensify the control control and anti gun control folks at the local and state level. Obama folks do not seem incline to take on the issue of gun control at this time and that is proably a wise political decision. Not sure that this is an issue that will be a good use of local political capital--at this time of budget problems and revenue crisis.
Sunday, April 19, 2009
STATE BUDGET CRISIS LOOMS--AGAIN.
With state revenues in a continued downward spiral, the legislature will no doubt return from spring break next week only to immerse itself in the task of finding a way to slice up to $800 million from the current year’s budget.
Everyone will play a role to shore up the budget, since analysts predict revenues could come up short by as much as a billion dollars by the end of the fiscal year if current trends continue.
Governor Jennifer Granholm last week reportedly began considering an executive order cut of some $80 million to begin the budget correction process and, working with leaders in the legislature, on further adjustments to the FY 2008-09 budget, as well as discussing how to allow stimulus money to best serve the state.
The state already adopted one executive order in December cutting more than $100 million from the 2008-09 budget. Revenues, however, continue to plunge as the state’s unemployment rate climbs — reaching 12.6 percent in March. Since the January Revenue Estimating Conference, revenues have fallen by more than $100 million each month from the forecast total.
Some officials suggested that if revenues continue to fall at that rate until September, the end of the fiscal year, then the state would have to adjust the budget by more than $1 billion.
Officials are anxiously awaiting April’s revenue numbers to see if the current month brings an end to the hemorrhaging.
Even if April provides some revenue solace, it does not negate the need to make budget fixes and quickly. The scope of those fixes with half the fiscal year lost to history, however, remains daunting.
Early last week, Ms. Granholm warned the state would still have to make large budget cuts even if it used every penny of stimulus money to help keep the budget balanced.
She refused at that time, however, to put a number to the size of the overall problem. But by the end of the week, the number was revealed: $780 million, going possibly as high as $800 million.
At this stage, to make that level of adjustments would take both stimulus funds and spending cuts, though how much would be cut was uncertain. The $80 million that Ms. Granholm suggested lawmakers use as a beginning point includes $30 million in proposed reductions the House had passed in a negative supplemental shortly before the spring break.
Also unknown, at this point, is from where the cuts would come.
The largest part of the negative supplemental was actually a $16.7-million swap of federal stimulus funds for child support incentive payments covered by general funds.
Other money came from programs that typically lapse extra funds over the years, as well as savings from not implementing a subsidized foster care guardianship program.
House Speaker Andy Dillon (D-Redford Twp.) said the cuts presented by the governor seemed as if they would get approval from all parties, but that officials are working on adding more cuts to the executive order.
“We’re all respectably working in our cubby holes to find extra money,” he said. Another meeting on that topic is scheduled for Tuesday.
Mr. Dillon said the way the stimulus is tied to certain programs prevents officials from cutting state dollars and would force reductions to discretionary spending by 50 percent. That’s impossible, which is why more federal stimulus dollars than originally anticipated will have to be used to keep the budget afloat.
For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.
(The following article was posted at Dome Magazine and written by Gongwer News Service.)
by Gongwer News ServiceApril 17, 2009With state revenues in a continued downward spiral, the legislature will no doubt return from spring break next week only to immerse itself in the task of finding a way to slice up to $800 million from the current year’s budget.
Everyone will play a role to shore up the budget, since analysts predict revenues could come up short by as much as a billion dollars by the end of the fiscal year if current trends continue.
Governor Jennifer Granholm last week reportedly began considering an executive order cut of some $80 million to begin the budget correction process and, working with leaders in the legislature, on further adjustments to the FY 2008-09 budget, as well as discussing how to allow stimulus money to best serve the state.
The state already adopted one executive order in December cutting more than $100 million from the 2008-09 budget. Revenues, however, continue to plunge as the state’s unemployment rate climbs — reaching 12.6 percent in March. Since the January Revenue Estimating Conference, revenues have fallen by more than $100 million each month from the forecast total.
Some officials suggested that if revenues continue to fall at that rate until September, the end of the fiscal year, then the state would have to adjust the budget by more than $1 billion.
Officials are anxiously awaiting April’s revenue numbers to see if the current month brings an end to the hemorrhaging.
Even if April provides some revenue solace, it does not negate the need to make budget fixes and quickly. The scope of those fixes with half the fiscal year lost to history, however, remains daunting.
Early last week, Ms. Granholm warned the state would still have to make large budget cuts even if it used every penny of stimulus money to help keep the budget balanced.
She refused at that time, however, to put a number to the size of the overall problem. But by the end of the week, the number was revealed: $780 million, going possibly as high as $800 million.
At this stage, to make that level of adjustments would take both stimulus funds and spending cuts, though how much would be cut was uncertain. The $80 million that Ms. Granholm suggested lawmakers use as a beginning point includes $30 million in proposed reductions the House had passed in a negative supplemental shortly before the spring break.
Also unknown, at this point, is from where the cuts would come.
The largest part of the negative supplemental was actually a $16.7-million swap of federal stimulus funds for child support incentive payments covered by general funds.
Other money came from programs that typically lapse extra funds over the years, as well as savings from not implementing a subsidized foster care guardianship program.
House Speaker Andy Dillon (D-Redford Twp.) said the cuts presented by the governor seemed as if they would get approval from all parties, but that officials are working on adding more cuts to the executive order.
“We’re all respectably working in our cubby holes to find extra money,” he said. Another meeting on that topic is scheduled for Tuesday.
Mr. Dillon said the way the stimulus is tied to certain programs prevents officials from cutting state dollars and would force reductions to discretionary spending by 50 percent. That’s impossible, which is why more federal stimulus dollars than originally anticipated will have to be used to keep the budget afloat.
For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.
Dome Magazine, an online magazine about Michigan govenment, politics and policy has posted an article on whether Michigan should have a constitutional convention in 2010. Voters will be asked to decide at the November 2010 election if they would like to convene a constitutional convention. The article is posted below (this article is written by Breanna Camarrillo for Dome Magazine):
Historically, the once-every-16-years possibility of voters authorizing a rewrite of the Michigan Constitution has drawn little more than yawns in Lansing.
That’s why this year, on the eve of the next required vote, and in a climate of great economic hardship and calls for political change, Bob LaBrant wants to make sure many of the state’s key interest groups aren’t caught napping.
The Michigan Chamber of Commerce senior vice president is among those trying to head off any surprises by getting out front with the message that Michigan’s doesn’t need an expensive overhaul of its governing document. The Chamber and Michigan Education Association, which don’t agree on a lot of policy issues, even teamed up earlier this month to begin mobilizing association and other capital opinion leaders by briefing them on the mechanics and ramifications of the required 2010 ballot question.
Since 1850, the state Constitution has retained a provision that automatically asks voters every 16 years if they’d like to convene a delegation to rewrite the Constitution. Voters have adopted a new state constitution four times, most recently in 1963 following a “Yes” vote in 1961 on convening a constitutional convention, or “Con Con.” Voters said “No” to the Con Con question in 1978 and 1994.
Big question
Perhaps the biggest political question surrounding next year’s vote is whether backers of last year’s ill-fated Reform Michigan Government Now! ballot proposal, which set out to allow no-reason absentee voting and cut the size of the legislature, among dozens of other far-reaching constitutional changes, are still out there planning to organize a charge toward a convention.
“[Reform Michigan Government Now! supporters] led a stealthy campaign,” said LaBrant, “so we’re not letting our guard down just yet.”
The Supreme Court last year ruled that the proposal was too broad to go on the ballot as a single initiative and that, in fact, the changes within it belonged at a Con Con.
Although the Reform group, backed by state Democrats and organized labor, may not have made it to the polls, supporters of the proposal were successful in rallying dissatisfied voters in an economically unstable climate, something they could try again through the mandatory 2010 ballot question.
Mark Brewer, chair of the Michigan Democratic Party, said that without official word from his party, Democrats are not backing the idea yet. But personally, he says, he thinks it would be a great opportunity for voters to air their frustrations with the current system.
While opponents have said the Reform group brought people together by harnessing negative energy from an ill economy, Brewer argued that people flocked to the initiative because it finally stirred public debate for those who want to change “business as usual.”
“It’s a shame voters never got to vote on the issues in the proposal, ” he said, “but even now the proposal could affect the outcome of a Con-Con vote.”
That’s not to say Brewer is giving up on the original initiative, since, he said, he still thinks it would be easier, less costly and involve as much public scrutiny to put the proposal on the ballot as having a constitutional convention.
Need for change
LaBrant said that while there are a few needed changes in the Constitution, they don’t amount to “fatal flaws” that would require a total rewrite of the document. Further, he said, opening up the document entirely would leave the state vulnerable to out-of-state interests and political action money, as well as to fringe groups (such as those that would legalize assisted suicide or drugs) that would likely try to insert their point of view into the Constitution.
Not the least of the Chamber’s worries is the likelihood that a convention would drive the state farther into debt, with an estimated cost to public coffers as high as $51 million if the convention were to last seven to 10 months.
There’s a good chance that, especially in these tough times, Michiganders aren’t willing to spend their hard-earned tax dollars on a Con Con, according to Chamber polls. Those show that while 60 percent of residents may have thought a convention was a good idea in early polls, only 25 percent of people polled said they would vote for a Con Con after they were told the high costs.
As for how much the Chamber will invest in its anti Con Con campaign, LaBrant said it could compare to the “modest’ spending the group put forth against Dennis Stabenow (U.S. Senator Debbie Stabenow’s-former husband), who led the fight for a Con Con in 1978. Or, if no pro-convention group comes forth in 2010, next year could look more like the campaign in 1994 when the Chamber led an anti-convention push without any organized opposition and very few expenditures.
If voters approve a Con Con, some of the issues in the Reform proposal that could end up fodder for a rewrite include permanently lowering wages for elected officials, trimming the size of the courts and redrawing legislative districts.
Other possible ideas that could take center stage: abortion rights, the death penalty, the sales tax cap and graduated income tax prohibition, Headlee tax limits and other Headlee issues, public school district consolidation, elimination of township government, restoring affirmative action programs, same-sex bans, physician-assisted suicide, legalization of drugs, allowing public aid to non-public schools, and school funding equity issues.
Another change many mention is modification or elimination of legislative term limits.
Tom Watkins, a business and education consultant in the U.S. and China and the former state superintendent of schools, said the Con Con question could pass even without an organized effort for a convention. If enough people get word that they can use their vote to make a change, he said, a vote for a Con Con may become likely, because people are fed up with Michigan’s “broken system” and the lack of urgency from its leaders to make changes.
He said while the legislature could use its two-thirds vote to make changes to the Constitution and submit them to voters, he doesn’t trust lawmakers, since he “can’t name one sensible reform passed by the legislature and the governor in the last decade.”
“The lawmakers and the special interests should fear that people are mad as hell and they aren’t going to take it anymore,” Watkins said. “They will take the only option available to them, and that is the constitutional convention.”
But LaBrant said a convention is reserved for extraordinary times like in 1961-62, the last time the state approved a rewrite of the document. He said that while there are some things that need changing in the Constitution, it is “fundamentally sound.”
In rapid response to an opinion piece in March in which Watkins said the Constitution, “like a 1963 car,” needs a tune-up, LaBrant said a constitutional convention would amount to more than replacing a few spark plugs on an otherwise cherry Mustang — it would be a total rebuild.
(For argument and accuracy’s sake, it should be noted that Watkins’ op-ed actually reads that the Constitution needs both a tune-up and “an overhaul.”)
“Revising the Constitution is more than a tune-up, it’s an overhaul,” LaBrant said. “[With a Con Con, the state would be] replacing the engine and the transmission.” “A tune-up involves changing a spark plug,” he said, explaining that normal amendments are Michigan’s constitutional “spark plugs.”
The state can and should give the Constitution a tune-up, looking at issues individually and then doing so with ballot initiatives or through the legislature and a two-thirds vote, LaBrant said.
Former Attorney General Frank Kelley, who studied the Constitution as part of the group Citizens for Michigan, agreed.
While the group issued a report in 2006 recommending a Con Con because it said the document had more than 60 flaws in it, Kelley has softened on the idea since then.
Kelley said that voters and the legislature could use ballot initiatives to clean up the issues in the current document instead of using taxpayer money to fund a Con Con in “dire times.”
Watkins said he agrees with opponents of a convention that there would be risks to opening up the document completely.
“But the governor and the legislature have a way to avoid the risk by bringing about sensible reform before [November 2010)],” Watkins said. “Change can only be ignored for so long, and we’re getting to a point where it can no longer be ignored.”
Asked why there is an organized effort against the convention, from the MEA and the Chamber, but not an effort for the convention, Watkins said: “there’s no constituency for change.”
“Everybody’s for change. It’s the most talked about thing right now. There’s not a shortage of ideas out there, but no one wants to act on it,” Watkins said. “There’s a lack of political will.”
Too much change
But Doug Roberts, a former longtime state official who now directs the Institute for Public Policy and Social Research at Michigan State University, said change might be exactly what kills the idea of a convention.
He said he thinks many people are paying attention to national policies and a new president who ran on a platform of change, and asking for a rewrite of the Constitution now would probably overwhelm them.
“Most people are trying to digest an immense amount of change that’s taken place in the last six months at the federal level and they may not have an appetite for more,” Roberts said.
But although he doesn’t think most people can stomach rewriting the Constitution right now, Roberts said they shouldn’t avoid debating the issue for fear of causing discourse.
“The most interesting part of all of this is simply that there is a [ballot] question and that it gets people thinking,” he said, adding that he hopes educators use the Con Con question to encourage students read the Constitution and decide whether they would vote for a rewrite.
Because many people likely haven’t read the document, the Citizens Research Council plans to publish online a series of papers analyzing the pros and cons of the current Constitution, how a revision might affect state and local government efficiency and other issues related to the Con Con question, said Eric Lupher, director of local affairs for the Council.
One consideration in its papers probably won’t be cost, since Lupher said, “if the document needs to be fixed, it should be fixed, no matter the cost.”
The convention question will appear on the November 2, 2010 ballot as Proposal 1. If approved, a delegation of 148 people, chosen from the current Senate and House districts, must be elected within six months, with the convention to begin by the following October.
Just how those elections would function is an added concern, since, according to the Chamber and IPPSR, lobbying laws don’t seem to address the activities in delegate races. That means the legislature should change lobby and election laws to ensure that spending caps and reporting requirements apply to delegates, they said.
It’s also troubling that delegate races would come on the heels of several big state races, including those for the secretary of state, governor and attorney general, which would likely drain Michigan PAC money and leave state delegate candidates vulnerable to out of-state-money, which could then result in non-Michigan agendas ending up in Michigan’s Constitution, LaBrant said.
IPPSR’s Roberts agreed that could be an issue and said that delegate races should be one of the “few exceptions in political races that are publicly funded to ensure the delegates represent the peoples’ interests.”
He also expressed some concern with getting quality people to leave secure jobs for up to a year to serve as delegates, saying that most don’t have positions that would allow them to take leave to ponder the Constitution for a few months and then return to the same job.
LaBrant said that if a Con Con were to move forward, he expects that quite a few term-limited, former legislators would turn out to run in delegate races.
As for whether the delegate post could catapult any political careers, as it did with many now well-known leaders from the 1960s delegation, including former Governor George Romney, most insiders doubt the short-term position would lead to much more than temporary notoriety.
Breanna Camarillo is a Capitol reporter for Gongwer News Service.
Well, should we or shouldn't we?
Historically, the once-every-16-years possibility of voters authorizing a rewrite of the Michigan Constitution has drawn little more than yawns in Lansing.
That’s why this year, on the eve of the next required vote, and in a climate of great economic hardship and calls for political change, Bob LaBrant wants to make sure many of the state’s key interest groups aren’t caught napping.
The Michigan Chamber of Commerce senior vice president is among those trying to head off any surprises by getting out front with the message that Michigan’s doesn’t need an expensive overhaul of its governing document. The Chamber and Michigan Education Association, which don’t agree on a lot of policy issues, even teamed up earlier this month to begin mobilizing association and other capital opinion leaders by briefing them on the mechanics and ramifications of the required 2010 ballot question.
Since 1850, the state Constitution has retained a provision that automatically asks voters every 16 years if they’d like to convene a delegation to rewrite the Constitution. Voters have adopted a new state constitution four times, most recently in 1963 following a “Yes” vote in 1961 on convening a constitutional convention, or “Con Con.” Voters said “No” to the Con Con question in 1978 and 1994.
Big question
Perhaps the biggest political question surrounding next year’s vote is whether backers of last year’s ill-fated Reform Michigan Government Now! ballot proposal, which set out to allow no-reason absentee voting and cut the size of the legislature, among dozens of other far-reaching constitutional changes, are still out there planning to organize a charge toward a convention.
“[Reform Michigan Government Now! supporters] led a stealthy campaign,” said LaBrant, “so we’re not letting our guard down just yet.”
The Supreme Court last year ruled that the proposal was too broad to go on the ballot as a single initiative and that, in fact, the changes within it belonged at a Con Con.
Although the Reform group, backed by state Democrats and organized labor, may not have made it to the polls, supporters of the proposal were successful in rallying dissatisfied voters in an economically unstable climate, something they could try again through the mandatory 2010 ballot question.
Mark Brewer, chair of the Michigan Democratic Party, said that without official word from his party, Democrats are not backing the idea yet. But personally, he says, he thinks it would be a great opportunity for voters to air their frustrations with the current system.
While opponents have said the Reform group brought people together by harnessing negative energy from an ill economy, Brewer argued that people flocked to the initiative because it finally stirred public debate for those who want to change “business as usual.”
“It’s a shame voters never got to vote on the issues in the proposal, ” he said, “but even now the proposal could affect the outcome of a Con-Con vote.”
That’s not to say Brewer is giving up on the original initiative, since, he said, he still thinks it would be easier, less costly and involve as much public scrutiny to put the proposal on the ballot as having a constitutional convention.
Need for change
LaBrant said that while there are a few needed changes in the Constitution, they don’t amount to “fatal flaws” that would require a total rewrite of the document. Further, he said, opening up the document entirely would leave the state vulnerable to out-of-state interests and political action money, as well as to fringe groups (such as those that would legalize assisted suicide or drugs) that would likely try to insert their point of view into the Constitution.
Not the least of the Chamber’s worries is the likelihood that a convention would drive the state farther into debt, with an estimated cost to public coffers as high as $51 million if the convention were to last seven to 10 months.
There’s a good chance that, especially in these tough times, Michiganders aren’t willing to spend their hard-earned tax dollars on a Con Con, according to Chamber polls. Those show that while 60 percent of residents may have thought a convention was a good idea in early polls, only 25 percent of people polled said they would vote for a Con Con after they were told the high costs.
As for how much the Chamber will invest in its anti Con Con campaign, LaBrant said it could compare to the “modest’ spending the group put forth against Dennis Stabenow (U.S. Senator Debbie Stabenow’s-former husband), who led the fight for a Con Con in 1978. Or, if no pro-convention group comes forth in 2010, next year could look more like the campaign in 1994 when the Chamber led an anti-convention push without any organized opposition and very few expenditures.
If voters approve a Con Con, some of the issues in the Reform proposal that could end up fodder for a rewrite include permanently lowering wages for elected officials, trimming the size of the courts and redrawing legislative districts.
Other possible ideas that could take center stage: abortion rights, the death penalty, the sales tax cap and graduated income tax prohibition, Headlee tax limits and other Headlee issues, public school district consolidation, elimination of township government, restoring affirmative action programs, same-sex bans, physician-assisted suicide, legalization of drugs, allowing public aid to non-public schools, and school funding equity issues.
Another change many mention is modification or elimination of legislative term limits.
Tom Watkins, a business and education consultant in the U.S. and China and the former state superintendent of schools, said the Con Con question could pass even without an organized effort for a convention. If enough people get word that they can use their vote to make a change, he said, a vote for a Con Con may become likely, because people are fed up with Michigan’s “broken system” and the lack of urgency from its leaders to make changes.
He said while the legislature could use its two-thirds vote to make changes to the Constitution and submit them to voters, he doesn’t trust lawmakers, since he “can’t name one sensible reform passed by the legislature and the governor in the last decade.”
“The lawmakers and the special interests should fear that people are mad as hell and they aren’t going to take it anymore,” Watkins said. “They will take the only option available to them, and that is the constitutional convention.”
But LaBrant said a convention is reserved for extraordinary times like in 1961-62, the last time the state approved a rewrite of the document. He said that while there are some things that need changing in the Constitution, it is “fundamentally sound.”
In rapid response to an opinion piece in March in which Watkins said the Constitution, “like a 1963 car,” needs a tune-up, LaBrant said a constitutional convention would amount to more than replacing a few spark plugs on an otherwise cherry Mustang — it would be a total rebuild.
(For argument and accuracy’s sake, it should be noted that Watkins’ op-ed actually reads that the Constitution needs both a tune-up and “an overhaul.”)
“Revising the Constitution is more than a tune-up, it’s an overhaul,” LaBrant said. “[With a Con Con, the state would be] replacing the engine and the transmission.” “A tune-up involves changing a spark plug,” he said, explaining that normal amendments are Michigan’s constitutional “spark plugs.”
The state can and should give the Constitution a tune-up, looking at issues individually and then doing so with ballot initiatives or through the legislature and a two-thirds vote, LaBrant said.
Former Attorney General Frank Kelley, who studied the Constitution as part of the group Citizens for Michigan, agreed.
While the group issued a report in 2006 recommending a Con Con because it said the document had more than 60 flaws in it, Kelley has softened on the idea since then.
Kelley said that voters and the legislature could use ballot initiatives to clean up the issues in the current document instead of using taxpayer money to fund a Con Con in “dire times.”
Watkins said he agrees with opponents of a convention that there would be risks to opening up the document completely.
“But the governor and the legislature have a way to avoid the risk by bringing about sensible reform before [November 2010)],” Watkins said. “Change can only be ignored for so long, and we’re getting to a point where it can no longer be ignored.”
Asked why there is an organized effort against the convention, from the MEA and the Chamber, but not an effort for the convention, Watkins said: “there’s no constituency for change.”
“Everybody’s for change. It’s the most talked about thing right now. There’s not a shortage of ideas out there, but no one wants to act on it,” Watkins said. “There’s a lack of political will.”
Too much change
But Doug Roberts, a former longtime state official who now directs the Institute for Public Policy and Social Research at Michigan State University, said change might be exactly what kills the idea of a convention.
He said he thinks many people are paying attention to national policies and a new president who ran on a platform of change, and asking for a rewrite of the Constitution now would probably overwhelm them.
“Most people are trying to digest an immense amount of change that’s taken place in the last six months at the federal level and they may not have an appetite for more,” Roberts said.
But although he doesn’t think most people can stomach rewriting the Constitution right now, Roberts said they shouldn’t avoid debating the issue for fear of causing discourse.
“The most interesting part of all of this is simply that there is a [ballot] question and that it gets people thinking,” he said, adding that he hopes educators use the Con Con question to encourage students read the Constitution and decide whether they would vote for a rewrite.
Because many people likely haven’t read the document, the Citizens Research Council plans to publish online a series of papers analyzing the pros and cons of the current Constitution, how a revision might affect state and local government efficiency and other issues related to the Con Con question, said Eric Lupher, director of local affairs for the Council.
One consideration in its papers probably won’t be cost, since Lupher said, “if the document needs to be fixed, it should be fixed, no matter the cost.”
The convention question will appear on the November 2, 2010 ballot as Proposal 1. If approved, a delegation of 148 people, chosen from the current Senate and House districts, must be elected within six months, with the convention to begin by the following October.
Just how those elections would function is an added concern, since, according to the Chamber and IPPSR, lobbying laws don’t seem to address the activities in delegate races. That means the legislature should change lobby and election laws to ensure that spending caps and reporting requirements apply to delegates, they said.
It’s also troubling that delegate races would come on the heels of several big state races, including those for the secretary of state, governor and attorney general, which would likely drain Michigan PAC money and leave state delegate candidates vulnerable to out of-state-money, which could then result in non-Michigan agendas ending up in Michigan’s Constitution, LaBrant said.
IPPSR’s Roberts agreed that could be an issue and said that delegate races should be one of the “few exceptions in political races that are publicly funded to ensure the delegates represent the peoples’ interests.”
He also expressed some concern with getting quality people to leave secure jobs for up to a year to serve as delegates, saying that most don’t have positions that would allow them to take leave to ponder the Constitution for a few months and then return to the same job.
LaBrant said that if a Con Con were to move forward, he expects that quite a few term-limited, former legislators would turn out to run in delegate races.
As for whether the delegate post could catapult any political careers, as it did with many now well-known leaders from the 1960s delegation, including former Governor George Romney, most insiders doubt the short-term position would lead to much more than temporary notoriety.
Breanna Camarillo is a Capitol reporter for Gongwer News Service.
Well, should we or shouldn't we?
State and Local Govenrments--Innovation
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Join us in the debate and in examining important issues in our state and local governments.
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