Sunday, September 16, 2007

Pass the budget, not the buck

President Harry Truman is known for the sign he placed atop his desk in the Oval Office, reminding everyone that "The Buck Stops Here." If only the politicians in Lansing were as willing to take responsibility...

An October 1 deadline draws near. By that date the Michigan House and Senate will have needed to pass the state budget with the signature of the Governor or the state faces a government shut down. The Attorney General has decreed that absolutely no money can be spent without a balanced budget signed into law. As of now the state is almost $2 billion short of making ends meet. Lansing, so far, has yet to deal with the situation and mostly what we've seen so far has been grandstanding and theatre, more of the same.

The Republican-controlled Senate has time and time again insisted that the state's budget should be balanced through spending cuts and have rejected several plans and compromises to deal with the budget shortfall through revenue increases. A last desperate measure by Senate Majority Leader Mike Bishop to pass the buck and make the voters decide was foiled last week, and so here we are, right where we were so many months ago when I last commented on the situation. Frankly, I'd put off saying anything else, assuming that the "paid professionals" in Lansing would finally come to some resolution. Especially since the best solution has been sitting on the table for quite some time.

In a previous post here, I called for the legislature to roll back a small portion of the Engler income tax cuts for at least a temporary period of time. Since then many others have come out in favor of the same method for putting our state budget back in the black. Other plans have been floated but none is as elegant or as easily wiped away, should more prosperous times return. Raising the sales tax or adding a new service tax were both equally flawed solutions and harder to do away with.

Though, to be honest I doubt any tax increase will be temporary. Michigan's financial situation is not just a product of "lean times" or a temporary manufacturing downturn as much as it is a product of continued and excessive rounds of revenue cuts as part of a deliberate "starve the beast" mentality among right wing conservatives in the state and the result of the lust for globalization among the country's rich elite who lobby Congress for trade deals that cut the American worker off at the knees and move production to foreign countries, robbing us of our ability to pay our mortgages or our taxes.

Michigan's attempts to to transform itself from an auto manufacturing state to whatever comes next won't be quick or easy, but it also cannot be done without an investment in education and infrastructure. Both have been slowly rotting away as the people have been sold the snake oil of lower taxes and smaller government which come at "no cost" much like those "no interest" and "no money down" home loans. Those little tax refund checks sure feel good but they don't last. Meanwhile, the state is failing to educate it's workforce and it's citizens while the roads and schools crumble. It's time to quit passing the buck and deal with the mess we've created.

Some would say that it's foolish to expect that common sense will rule and that people will see how the "feel good now" tax cuts of the past created this mess and that it's time to own up to our collective responsibilities. Then again, outside of a small and timid group of corporate puppets and timid bureaucrats in Lansing, most people I talk to seem to understand the need to own up to our responsibility to properly fund schools, roads, health care, etc. But yet, the interest groups are already threatening to recall politicians who vote for tax increases, and timid politicians who cling to their cushy jobs and look to take the next step up the ladder of sucking on the public teat are feeling the heat. So, it's fair to ask if we expect politicians to make the tough and correct choices, isn't it time for the voters to do so as well?

For too long citizens have returned to office the very politicians who traded the milk cow of American industry for the magic beans of a Flat Earth. We've voted the guys who offered prosperity without cost and glory without sacrifice. I have no doubt that whatever form the final budget takes in Lansing, there will have to be some form of increased revenue (even the Senate conceded as much when it offered only a meager package of cuts which fall far short of the $2 billion needed). When the time comes, there will be wailing and gnashing of teeth as anti-tax, anti-government special interests threaten recall and primary challenges. We can only hope that our elected representatives belly up and do what's right. But when our time comes will we support the ones who were responsible and wise or will we once again support the short term solutions and the easy answers?

I ask the lawmakers in Lansing to do what's right and pass the budget, then I ask for the voters of Michigan to support them when they show courage and make them accountable if and when they pass the buck.

33 comments:

Pol Watcher said...

Just a heads up: Anyone wishing to comment on OTHER news or topics can do so in the appropriate venue (the Barry Home Companion blog, for instance). I'll delete ALL posts that don't stick to the topic of the state budget. I'm back from a summer break and I'll be commenting on other matters soon so if you feel you MUST comment on those issue here, hold your horses and we'll get there in due time...

Jay said...

Pol:

Republicans and Democrats share the blame in equal measure here. Nobody is really trying to compromise and make "tough decisions". It is all a comedy of errors, with no one listening.

Right now the Dems are getting the attention because a tax increase has to originate in the House first. Speaker Dillon could pass these measures with a straight party-line vote, but he, and six "yellow dog" Dems are afraid that they will suffer the repercussions of a recall (a la the early 80's).

It would behoove him and the hold-outs to pass a tax increase and peg any measure's failure in the Senate on Mike Bishop.

I think he's not doing this because he thinks a compromise can be reached at the last minute. There again is our problem--nobody is talking to the other side. Supposed bipartisan discussions that had reportedly been going on for days had, in fact, never begun. The Dems are trying to first sway their holdouts before bringing anything to the GOP. Welcome to the 2007 Michigan House Bay of Pigs fiasco. Nobody is compromising. On Sunday, the "voting board opened at 12:42 p.m. and was cleared – without a recorded vote – at 1:05 p.m. with 41 Democratic supporters, 46 Republican dissenters and 23 members from both parties abstaining. There was no floor debate on the constitutional amendment."

Unfortunately,last-minute public policy like this tends to be bad policy (see Proposal A), usually bitting those it was trying to help in the rear. With these short-termed ninny legislators in power, I don't see any leader with the intestinal fortitude (or "courage") to pass the measures that need to be passed. In the end, the voters will be served a package akin to cold gruel.

mmmm....gruel

Pol Watcher said...

Jay, I didn't entirely blame the Republicans here. I only blamed them for their last minute desperation move to try to shift the burden of decision-making to the voters who thought they elected and paid Bishop and the rest to do their jobs and make these decisions. Plus, it's not like we don't have opinion polls which could tell them which way the people wanted them to go.

Yes, Granholm and Dillon are more than culpable (the fact that Granholm never had the House with her on her plan is one obvious example). But here I also want to say that if Granholm had done what many people suggest and come out for a tax increase before the election we all know she wouldn't have beat Dick "More Tax Cuts are Always the Answer" DeVos (which I think is what they people who make those claims wanted to have happened). But Granholm has consistently and correctly maintained that the budget mess is a structural problem and needs a permanent solution- while the Michigan Republican Party still has its head in the sand.

Granholm's offer (which I was against) was summarily dismissed by Bishop and the GOP who never offered a plan that would make up the entire nearly $2 billion shortfall, so I think they do share a larger portion of the blame in why this mess is still going on. THIS is why I'm asking voters to understand that this mess needs to be dealt with and tax increases, however distasteful to those of us struggling to make ends meet, are the only way out. The main people who have to understand this are the GOP base who've been lied to and pandered to so often I'm not sure they can grasp the logic here but I'm hoping...

el grillo said...
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Jay said...

I only blamed them for their last minute desperation move to try to shift the burden of decision-making to the voters who thought they elected and paid Bishop and the rest to do their jobs and make these decisions. Plus, it's not like we don't have opinion polls which could tell them which way the people wanted them to go.

If any income or sales tax increase is passed, it has to go the voters per the State Constitution. It looks to me like the GOP is following the rules.

el colibri said...

The present stalemate in Lansing mimics the partisan mess in D.C. It seems to me that this 'do or die', "black and white' division was greatly enhanced by Newt when he actually closed down the Congress of the United States several times back in the 90s.
Now it appears that for one party or the other to pass any meaningful legislation it is necessary for that party to control the legislative process from alpha to omega. This is tragic. My guess is that unless BOTH Republicans and Democrats can learn the art of compromise little will come out of Lansing and if it does it will be 'patchwork' stopgap legislation that will have to be revisited.
Also, my guess is that come the next election cycle voters will resolve the stalemate.
Compared to the legislators in the other 49 states our representatives are handsomely remunerated... we the people have NOT been getting our moneys worth for quite some time. Perhaps the idea of a unicarmal legislature isn't such a bad idea afterall and the proposal should be revisited.

agnosticrat said...

I saw that coming colibri.

Welcome back Pol.

Keeping in mind the dismissal of warnings posted previously on this board, about dismantling the SBT without a revenue replacement I find everyones optimism here, humorous.
The electorate is still sleeping.
Kicking the can down the road now, will only cause them to hit the snooze button, and roll over again.
As your warning about staying on subject shows; Even politicos have a short attention span, and can be lured into mental masturbation over the least consequential subjects.
Expecting Joe Sixpack to take notice of the turmoil in Lansing without applying a republican talking point is foolish.
Expect the worst case scenario.
It is politics, and hardball politics at that.
Democrats...Take the hit!
It is far more important that the power being held now is used now. To allow fear of loosing a seat to block your judgment, only delegates your power to those that would likely vote you out anyway.

el grillo said...
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el colibri said...

el Grillo, I agree with what said. Also, I still think that our legislature should scrutinize the monies alloted to all of our institutions of higher learning. I'd like to know just how many of their graduates stay in Michigan and contribute to our economy after graduation. By any chance are we educating too many highly trained people that move out of state or overseas after graduation?
Are our collages and universities enhancing Michigan's economy or are we educating young people for others? Our budget item for higher education is substantial and should be carefully examined and analyzed.
Is the competition between these institutions to grab as much as they can of the available dollars creating duplication of building, services and departments?
Is there a master plan for Michigan's higher education program?

Barry County Redneck said...

I always believed that republicans held as a core belief that smaller government was preferable to large government. That less taxes and services and more individual responsibility were key platform ideals.

Well it seems that spending is out of control. We need to increase income or cut costs. Its that simple. Either way hurts, but everyone needs to take a deep breath.

The scary part is I don't think we have seen the bottom yet. It's going to get worse people!

And then you have the Fed making unsound decisions. I know the markets rallied, but step back and think. If things are bad enough to warrent 50 bips cuts, then what are they trying to prevent?

el colibri said...

I doubt that changes by the Federal Reserve interest rates will have any immediate effect or impact on the budget crisis in Michigan. Don't get distracted by what's going on in Washington right now. Michigan's problems are severe and immediate. We should be concentrating on solving the crisis we face here and now. Pressuring both political parties to accept compromises and tone down their partisan rhetoric is a good place to start.

agnosticrat said...
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el grillo said...
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agnosticrat said...

el grillo
While find your report fascinating I wonder if it might not be a bit off subject.
This for instance would be an enjoyable conversation at elgrillo.blogspot.com! Or even elcolibri's own blog.
I have some comments I would post there, about your plans to tie the hands of education funding due to the lack of high paying post graduate work in Barry County.

Pol Watcher said...

Redneck,
My biggest problem with the Fed decision is that once again the markets get bailed out and the media exclaims "problem solved!" But real people are left holding the bag and the rate cut is not likely to lower mortgage rates in the short term. But as long as Wall Street is happy then who cares about the little guys. Greenspan actually impeded actions that could have prevented the sub prime crisis but now he gets to cluck about it. Also, the big problem is that the Fed is interested in markets and wields a blunt instrument to affect markets but we seem to expect it to be able to make minute corrections and to fix things outside their direct control.

Grillo,
The problem is a vicious circle: Highly educated people have few places to work here which leads to people leaving the area to work elsewhere which "drains" the economy of talented workers, leaving us with few works who can do more than flip burgers or the factory equivalent. Companies don't tend to locate where they can't find qualified workers. Chicken or egg.

Oh, and I don't really mind the general economic discussion, my main concern was 911 rants or questions about job openings at the local paper- both of us which should hopefully be discussed in more detail soon and allow people to voice their opinions in the proper venue at that time and Grillo is right that topics other than hot button issues of local coffee shop rumormill interest don't generate as much discussion but it would be nice to do what we can to change that.

Mark said...

Time to put my stick in the hornet's nest again:

First of all, no one has ever been hired by a "poor elitist" The poorest countries on Earth are the ones who do not participate in globalization. I find it interesting that liberals will reject the fact that nearly all economists agree that globalization is overwhelmingly positive but will blindly accept anthropological global warming with much less documented proof. While the short term results of globalization may be bad for some industries or groups of workers over all it is a huge net gain for the economy as a whole. Protectionism made India a dirt poor country for decades. Read Thomas Sowell's "Basic Economics"

Maybe we would still have a decent manufacturing base if our state government hadn't taxed them into oblivion. We've killed the golden goose. Why are most other states running a surplus?

Most of these people who are losing their homes in the subprime mortgage meltdown bought more house than they could afford or were bad credit risks. That is why they had a subprime loan in the first place. Why should stupid behavior on the part of both the borrower and the lender be reenforced out of mine and everyone else's pocket with a government bailout? If I lost my job I wouldn't come knocking on my neighbor's door demanding a handout. I'm just a "little guy" who is happy that Wall Street is happy. My 401(k) went up $2500 yesterday.

As for our current state tax situation. I see many letters to the editor suggesting a tax increase. I propose that every who feels this way put their money where their mouth is and send their next tax refund check back to the state. How is taking more money out of my pocket going to help the state? I'll have less money for my local merchants, less money for my kid's college fund etc. The state government has not proved to me that they can spend the money they already get wisely. Why should they be rewarded with more. The House Democrats have the votes to pass anything they want. Why are 10 of them refusing to even vote? They should be steamrolling the Republicans. They claim they were voted in, back in November, because people wanted their fiscal policies. Maybe they do not have the courage of their convictions. Agree or disagree with their policies, it appears to me that the only ones standing up for their beliefs are the Republicans.

What is everyone's opinion of the FairTax? Seems like a win/win for conservatives and liberals. The poor pay less and business gets a much friendlier environment to do business in. See link for details:
http://www.fultonsheen.us/michiganfairtaxproposal.html

agnosticrat said...

I propose that Mark puts his money where his mouth is, and give his job to someone in China. After all it would be a huge gain for the economy as a whole.
The reality is that protectionism is a far reach from what most liberals are calling for on fair trade. Thats a far right thing.
What I personally would like to see is a revisiting of NAFTA trade laws. What is now in place are rules that allow a communist nation, and several other less developed countries to continue ther outdated laws against organization of workers for better pay. What Mark has expressed in his diatribe against liberal thought, actually has some merit. Capitalism is the best way forward for the third world. But unfettered capitalism the likes we here in the United States saw in the early twentieth century will only add to the treasure chests of the few that already have means.
In order for our great, great, grandchildren to live out Mark's rosy worldwide economic prophecy, wages would have to rise at a much faster rate than what is happening in Mexico, China...etc.

el colibri said...

Mark: The economic situation in Michigan is the culmanation of many factors. Our state's tax structure is only one factor among many and can not realistically be politicized. There is enough blame to go around and pointing fingers is futile and unproductive.
Michigan's industrial base became unbalanced decades ago and everyone recognized that we had become too dependent on the auto industry and it's related suppliers. Labor unions and industry in lockstep racheted up production costs..... it takes two to tango you know. Add to this the fact that the buying public became addicted to big guzzlers.
During the OPEC created oil crisis on the 1970s our federal government could have put in place tax incentives that would have encouraged the buying public to at least consider purchasing gas efficient cars...... but they didn't. The high gas prices we endure today was predicted at that time.
Another important factor is the ever increasing cost of health care which became a substantial overhead cost in automobile production ...... this along with generous retirement benifits was passed on to consumers. Again industry, unions, politicians and the buying public all share blame.
The SBT tax was discrimatory and a boondoggle from the get go and has contributied to the present business climate.
We can only pare expenses down to a certain socially responsible level..... how much our politicians shift the real cost of budget cuts onto the backs of our most vulnerable citizens is a measure of our collective ethical and moral ethos.
So instead of blindly defending our political stances let's realize that we've got to compromise. We may have to raise income taxes to balance the budget.... we have to be more certain than ever that each dollar we have is spent wisely and if more cuts in state programs is socially responsible and justified so much the better.

el grillo said...
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agnosticrat said...

Forgive me for assuming.

My comment was more do to with an objection to any idea that the state be allowed to tie its financial aid to the eventual residence of graduates. I jump to conclusions quickly and now realize that it may not have been the direction the discussion was going. While the idea would have merit in discussing fiscal matters, I assure you my objections would have been more constitutional in nature, and likely would have taken us off subject.

In short:
play on!

el grillo said...
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agnosticrat said...

An over generalization perhaps.
Thanks for clearing that up.

Barry County Redneck said...

I love the scare tactics. No parks. No SOS offices. But no lottery, come on. What are the unemployed workers of Michigan to do? I sometimes think that the average Joe's idea of a retirement plan is to play the Mega Millions each week.

PASS A BUDGET!

el colibri said...

Evidently the GOP considers raising taxes under any circumstances a poison pill that they can't swallow. Like Newt of yore they'd rather close the government down if they can't get their way. I'll wager that voters will rectify this situation come the next election cycle.

el grillo said...
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Bulwark said...

El - you make to much sense. It's the old my dads stronger and smarter than your's attitude, instead of what's best for ALL the people. We can't keep giving it away, we have to work for it. Don't give them the fish, give them a fishing pole and teach them "how too"

el grillo said...
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el grillo said...
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el colibri said...

Jiminey: As witnessed by the number of 'death penalty' states still around our justice system is focused on punishment and retribution and not rehabilitation. This seems to me to be incompatiable in a society the professes to believe in New Testament teachings but then there is a lot going on in this country right now that reflects a mentality rooted in the 'dark ages'.
I'll bet that there are many 'non-violent' offenders in our prison system that could be safely integrated back into society. I recognize that there are some offenders that can never be safely released. An enlightened reappraisal of our present penal system could over time save mega tax dollars. This is an area that would not yield immediate savings that would relieved out present crises but it could become very significant over time.

el grillo said...
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el grillo said...
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el grillo said...
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Boggsone said...

Let em out El C, but let them live in your neighborhood. Too many "bleeding hearts" like you. If you don't want to do the time, don't do the crime!" They "ALL" get rehabilitated as long as we watch them. They ALL find the bible when we are watching. Several this year have been paroled and re-offended within weeks. Which ones are you willing to take the chance on and live with you, your children or grandchildren?