The Snyder budget

Governor unveils tough calls, but they must be made

Feb 23, 2011 at 12:00 am

"Democracy is the theory that the common people know what they want and deserve to get it, good and hard." —H.L. Mencken

"Everybody likes change until it affects them." —Gov. Rick Snyder

Our new governor presented his new budget to the Legislature last week, and it really was a bombshell.

Bye-bye, film industry tax credits! Bye-bye, Earned Income Tax Credits (EITC) for the poor!

Private pensions will be taxed! Public pensions will be taxed! Prison spending will be slashed! Money for higher education will be cut! Money for elementary and high school education will be cut! Revenue sharing will be cut by a third!

But business taxes will be lowered dramatically.

The howling began immediately, some of it less dignified than the rest. Starting at the bottom, Mitch Albom, who wants more of his cloying books made into movies, emitted a protracted whine about the film credits in the Sunday Gannett paper. "As a person who helped create the film credits program, I asked for months to meet with Snyder," he huffed.

The governor, evidently not knowing that Mitch was a Very Important Person, kept him waiting until two weeks ago, the churl. When the governor didn't do what Mitch wanted, Albom wrote that he felt like he'd "been punched in the stomach." No five friends in heaven waiting for Rick Snyder, no siree!

Granted, there were a lot of more serious objections to the governor's proposals. There are actually legitimate arguments that cutting back the film credits is the wrong thing to do. More importantly, there are deep concerns about what these budget cuts mean to the poor and our children.

Gilda Jacobs, who now heads the Michigan League for Human Services, was appalled at the specter of another 14,000 kids being driven into poverty. Others were stunned by the proposed $470 per pupil cut; one wonders how many more districts this will tip over into either emergency financial manager-hood or bankruptcy.

The revenue sharing cuts will hurt cities too, but actually came as a relief to some city officials I talked with; many of them feared it might be zeroed out entirely.

Labor complained too, of course, but the biggest caterwauling of all came from seniors who objected to the idea of having to pay tax on the money they collect from their pensions, some of which are quite generous.

"Class and generation warfare at their highest!" bellowed one Tom Diamondale, who in e-mails referred to the governor as "Slicky Slider," which, as nicknames go, is sort of cute.

State Senate Minority Leader Gretchen Whitmer, who heads the tiny caucus of Democrats in that body, complained that there was no shared sacrifice.

Yes, just about everybody hated this budget, except big business interests and the Chamber of Commerce. But curiously, I had a hard time working up much sympathy for the critics, for one largely overlooked reason:

They offered no alternatives.

All last week, I kept waiting for the Democrats to release a proposed alternative budget. Then I waited for some group to do so. But no one offered anything, except more whining.

Sorry, but the facts are these: Michigan has a huge budget deficit and the books have to be balanced. Right now.

We also have a broken economy and tax structure, which is partly still the legacy of our automotive past and partly due to our failed term-limits system, and the even more dysfunctional politicians we've been electing, one in particular: Jennifer Granholm.

Make no mistake about it. If you are a liberal, if you are a Democrat, if you care about children and education, you have her to thank for this. She knew this day was coming.

Everybody in Lansing who knew about state finances knew it was coming. We were going to run out of money and crash and burn, unless we changed our ways.

When the Democrats were running things, they weren't even willing to try. After her triumphant re-election in 2006, I urged the governor (through a meeting with her husband) to be bold. Go on television, explain everything to everybody.

Talk, I suggested, about shared sacrifice and the need to bite the bullet and address the real problems of this state. Use your landslide victory and superb communication skills.

Had she done that, she might or might not have succeeded. Mike Bishop, that dark pool of negativity, did not have the clout or confidence he would later attain.

There's a good chance she could have defined the debate, perhaps won a small increase in the state income tax or sensibly pushed to extend the sales tax on services.

Possibly she could have even started a major move to restructure state government. But she didn't have the guts to try. The moral bankruptcy of this state's political culture reached rock bottom in 2007. That's when the slimy politicians sold off $900 million in future tobacco settlement revenues in exchange for $400 million right away.

They did that in order to avoid hard, necessary decisions. They should all have been impeached. Shortly thereafter, they came up with the now-hated Michigan Business Tax to replace the older, Single Business Tax. What people now forget was that when it was first approved, the MBT was an improvement on what came before. But then, at the last minute, the parties slapped a 22 percent surcharge on the new tax, effectively driving business away.

After that, anybody with two brain cells to rub together knew the coming crash of state government finances was only a matter of time, and not much time. Actually, it would have happened on Granholm's watch, except for one thing: President Obama's stimulus program, which sent billions to this state.

There were probably some starry-eyed idealists who thought the money might be used for job creation or to invest in new and better infrastructure, etc. But our politicians just threw it in the deficit hole. Now, it's all gone, and there won't be any more. Hence the Snyder revolution. Nobody, by the way, should be mad at the governor.

He ran for office promising to drastically lower business taxes, and we elected him by a 58 percent-to-40 percent landslide. How did we think he was going to do that and balance the budget?

Find dilithium crystals under the Capitol?

The only sensible alternative I've seen was offered by a citizen named Amy Keyzer, who copied me on a letter to the governor. "You are already in hot water with a number of groups. Why not jump in with a proposal to raise the gas tax, the beer tax, and suggest that Michigan citizens vote on a (constitutional amendment allowing a) graduated income tax?"

I agree. But that's what Little Miss Blow-you-away should have done four years ago, except she lacked the guts. The liberals who are yelling now should have pushed her then. Instead, they are like the man who refused to brush his teeth for years, and now thinks it outrageous that he needs root canals. Well, grin and bear it.

Democrats should be arguing in favor of giving business a slightly smaller tax cut, and saving a few programs, such as the tax credit for the poor. I think the film credit too, was a morale booster, even if it was a slight loss leader.

But the Dems have little power left in Lansing. This governor was elected to make tough decisions, and he's making them, gambling the whole farm on ramming this, pension tax at all, through the Legislature, and then on business bailing us out.

What's left to be seen is if he can succeed.