Ain't seen nothing yet

Jun 24, 2009 at 12:00 am

Everyone who has been paying attention knows that the recession has meant a rapidly growing crisis for state government. Every month, Lansing finds that it takes in less revenue than the experts estimated.

Down, down goes the spiral. But what few of us realize is that the very real pain many of us will feel hasn't even started yet. That will happen starting this fall. Here's the scoop. The federal government can run a deficit bigger than Betelgeuse, as long as it can keep borrowing money from somewhere.

But the state legally has to balance its books every year, meaning that if they don't have it, they can't spend it. When the politicians run short of money to do what they planned on, like fixing the roads or funding schools, they have two choices: a) cut services or b) raise revenues, via taxes or fees.

Sure, they've often run a little short in the past, and so they lay off a few clerks or make the schools wait a few months for some of the money they have coming. But this year the roof fell in. The deficit would have been way over a billion dollars. Fortunately, the state had a secret ally: President Obama.

Michigan got a few billion in stimulus bucks. These weren't meant to be thrown into the yawning hole of the state budget deficit. They were supposed to be used to create new jobs and opportunities. However, if the state didn't come up with money fast, thousands who have jobs now would be swept away.

So, many of the Obamabucks are being used to plug the hole. But here's the horrifying part. That won't be enough! Jennifer Granholm and the Legislature still have to cut hundreds of millions.

They've been cutting for years, however. Anyone who says there is any fat left, as in, unnecessary programs, is either lying or just plain ignorant.

They now will be cutting programs that we need if we are to have a future: paying the rent with Susie's college savings, in other words. 

Here's a small sample of what that will mean. Susan Demas, an extremely talented young columnist who covers the Legislature for Dome magazine and a variety of other online services, sent me a note last week.

"This should scare the (used hay) out of any thinking person in Michigan," she told me. The Republican-controlled state Senate is on course to eliminate all funding for early childhood development, she reported.

What's more, they were cutting the "foundation grant," the amount each school district gets per child, by more than $100 a kid. Translated, that means teacher layoffs, as well as fewer resources. "Anyone think we do an adequate job educating kids at the current funding level?" asks Demas, who has a daughter.

That's just the beginning. The current administration will likely be able to use federal stimulus money to cover most of the deficit for the coming two fiscal years, which in Michigan, bizarrely stretch from October to September.

But sometime before September 2011, all that money will be gone. And if something isn't done to change the entire way Michigan plans its budget, there will be a great crash, a deficit probably larger than $2 billion, and no obvious way to get that money, short of selling ourselves to Azerbaijan.

I am not exaggerating. We could, however, fix it, if we moved now. We have only a few stark choices. We could accept that we want Michigan to be on a par with Haiti, or maybe Albania, and stop funding education and social services and forget about fixing the roads and bridges. 

Or, we could raise taxes to something like the level required to maintain a civilized society. The best way to do that would be to pass a state constitutional amendment allowing a graduated income tax, which means that Matty Moroun and Geoffrey Fieger would pay a higher percentage than a kid who works at Holiday Market bagging groceries for $8 an hour. 

Republicans would go bananas trying to prevent that, however, since it would be fair. An alternative might be to extend the sales tax to services. Right now, if you buy shock absorbers, you pay sales tax on them. If you pay Joe's Body Shop to put them on, you don't pay any tax for the service.

You could change that, drop the sales tax rate from today's 6 percent to 5 percent, and Michigan would be back in the black. You wouldn't even have to tax medical services or business-to-business transactions. 

Unfortunately, unless we all start getting really mean and nasty with our lawmakers, they are almost certain to do nothing, and we will see Meltdown 2011. You see, thanks to term limits, Gov. Jennifer Granholm will be out of a job before the fit hits the shan, as will nearly all of the state Senate. 

They won't be there to be held accountable! 

We will be, though. Just don't say I didn't warn you. 

Speaking of Republicans: Democrats, as we all know, can be weak, self-serving, even venal. Republicans, however, are more interesting. One can never tell if they are being stupid, evil, or bat-shit crazy, or all at once.

Senate Majority Leader Mike Bishop is perhaps the prime example of this. Last week, he attacked the governor's plan to lay off 104 new state troopers, all trained by the state at considerable expense to the taxpayers. The Freep quoted him as saying, "We've lost our mind … we're not focusing on law enforcement."

The governor says she hates doing it too; it is just that there is no money. Bishop's response? His Senate Republicans called for another $4 million in cuts to the State Police budget next year!

See what I mean? 

Worrying about the count: It is crucially important — for a bunch of reasons — that everybody gets counted when it comes time for the U.S. Census. For one thing, scads of federal and state dollars depend on it, not to mention representation in Lansing and Washington.

This is especially vital — and also hardest to achieve — in Detroit, where much of the population is immigrant, constantly moving, or a little leery of cooperating with anybody who looks like the law.

The man I know who understands this best is Detroit's Great Demographer, Kurt Metzger, who is now director of the Detroit Area Community Information System. (He previously spent years doing population studies for the U.S. Census, Wayne State University and the United Way.)

He is a trifle concerned that the city isn't moving quickly enough to gear up for Count Day, which is April 1, 2010. Care has to be taken that everyone understands how important it is to be counted — and that the enumerators aren't going to rat on you for anything else.

Metzger noted that while the Census Bureau is already starting outreach activities to get people informed and ready, the city needs to get going too. "An inaccurate census will only hurt the city and the region's ability to go forward."

"There are no do-overs, and whining about an undercount will not change the results," he said, adding that the best way to avoid this is to make sure people get what's at stake. In other words, Mayor Bing, this is a three-pointer at the buzzer we just have to make.

Jack Lessenberry opines weekly for Metro Times. Contact him at [email protected]