Commentary on the State Budget Predicament

by Douglas M. Paterson, MPA, Director of State Policy, Michigan Primary Care  Association

Because there has been such little news to report about the progress of the State budget, many reporters who are in the know have been providing perspective on why, in a time when we need LEADERSHIP, no one seems willing to provide such.

An article published yesterday by Kathy Barks Hoffman, who writes for the Associated Press, sheds very good insight on why nothing is happening. She points out that while everyone seems to be focusing on the budget, it is really political considerations that are playing a bigger role in the inability of legislators to reach a solution. “With 2010 campaigns already underway, Democrats and Republicans are most worried about who will control redrawing congressional and legislative districts after next year’s census. Because of this fact, neither side feels much like compromising.”

Ms. Hoffman’s article explains that Republican Senate Majority Leader Mike Bishop, who so far is insisting on no tax hikes to balance the budget, has to stay fiscally conservative to have any hope of winning his party’s attorney general nomination next year or running for higher office. Further, Democratic House Speaker Andy Dillon, who’s considering a gubernatorial run, would like the budget deal to include his proposal for putting all public employees—state workers, teachers, university professors, and township employees—under one health insurance plan to save money.

Governor Granholm, who is term-limited and can’t run again in 2010, seems wary of pushing for tax increases that would expose Democrats to opponents’ criticism. She also is trying to protect Lieutenant Governor John Cherry who hopes to win the governorship next year. The administration isn’t keen on giving GOP opponents any ingredients for 2010 bash-the-Democrats ads.

If Democrats manage to end GOP control of the Senate in 2010 for the first time in more than a quarter-century, and maintain control of the governorship and their House majority, redistricting could fall totally into Democratic hands. Republicans fear that such a situation would lead to fewer GOP-friendly districts.

Ms. Hoffman points out that none of the budget negotiators talk publicly about political ambitions or redistricting, but both are playing a role in why negotiations aren’t going smoothly.

Senate Republicans are sticking to the bills they’ve already passed that cut state spending $1.2 billion by doing away with college scholarships, trimming Medicaid reimbursement rates for health care providers, and cutting monthly payments to welfare recipients. House Republicans, meanwhile, have offered up a package to cut spending by $1.4 billion. They’re unlikely to vote for any measures to increase revenue.

That means House Democrats, who like little of what’s in the House GOP plan or the bills Senate Republicans have passed, will have to propose their own bills if they want to raise more revenue.

The Granholm administration, meanwhile, keeps sending mixed signals. After proposing in February that $1.6 million in Amtrak subsidies be cut, she reversed course Monday, saying the state has to support Amtrak to have a chance to land federal dollars for high-speed rail.

So, while the rhetoric is that politicians in Lansing really don’t want a government shutdown on September 30, many pundits wonder how one will be avoided. One scenario that could happen is for the legislature to do what it did not do last time and pass a “continuation budget” for 30-60 days while legislators continue to wrestle with the $2 billion dollar hole. My fear is that, as experience shows, until an actual deadline or shutdown looms real, they will continue to avoid hammering out a lasting solution which MUST address the fact that this state simply does not generate enough revenue to support the services that are expected and needed by the public.

As I stated before, the legislators’ collective goal should be to adequately fund those areas for which the state must be responsible. They must avoid the notion that by simply making the numbers add up they have done their jobs. If they do not look with vision to the future and what the state will become if it doesn’t adequately provide public services, no one will want to live or work here. Revenues must be addressed.

What politicians need to hear from all of us is that we expect leadership and leadership requires tough and not always popular decisions. We want people in office with a vision for a positive future for Michigan and if they can’t do that job, we will elect people who can!!

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