Environment Picture

President's Column: Scared? Sure, but state needs vision, not fear mongering, to lead us out of the economic abyss

In real estate, it’s location, location, location. In politics today, it’s jobs, jobs, jobs. Not necessarily green jobs, not clean tech jobs, just plain jobs, jobs, jobs.

Anyone actively seeking work right now knows how hard it is to get a job. And those worried about their job security have stress levels through the roof knowing their prospects are bleak should they be let go.

It’s no wonder people are angry. Angry at government, angry at politicians, angry at bailouts, just plain angry. Their anger is fueled by their fear: the fear of losing their jobs, fear of losing their house, fear of losing their family.

So what do we get from our leaders? Too much fear baiting for me, too much playing into the voters’ anger. That’s not leadership, its showmanship at best and plain dangerous at its worst.

The nation is only now feeling the pain Michigan residents have felt for the past decade. No state can withstand losing 900,000 jobs. That’s one in every five jobs gone for good. In 2009 alone, Michigan lost more than 270,000 jobs. Unemployment is hovering between 14% and 15%. When you include the underemployed, that number soars to well over 20%.

Lansing’s solution of making government smaller, paying workers less, and denying medical coverage to those on Medicaid won’t bring jobs back to our state. Cutting funding to our education system won’t bring a brighter future or more jobs to Michigan. Neither will gutting environmental protection and natural resource management. I’m not saying government shouldn’t be effective and efficient, but just slashing and shedding jobs and services won’t bring a single job back to our state.

Since 2001, we have reduced state employees by 16.7%, and the horizon is still bleak. You can’t grow a business through cuts alone; you need to make investments in the future.

To grow our state, we need to invest in our people, communities and infrastructure. To make these crucial investments the state needs adequate revenue. A plan that relies solely on cutting state government and slashing revenues even more is a recipe for disaster.

If reforms are the name of the game, then here are mine.

Reform state revenues. Extend the sales tax to services, allowing a reduction in the sales tax rate from 6% to potentially 5.5%. A bigger change is to amend the state’s constitution to allow for a graduated income tax, reducing the rate for most Michigan families and raising it only for those who can afford it. Eliminate the current 22% surcharge on the Michigan Business Tax; keeping it is a recipe for continued assaults on government by business interests. Replacing the lost revenue through the new service tax is a must.

Annually review our state tax exemptions, credits and deductions, especially targeting for elimination those corporate tax breaks that are not producing or retaining jobs. Off limits are the tax exemption on food and health care. Over the years, many corporate tax breaks have grown to a point that they now total more than our entire state revenue in the budget.

Until 2002, the total amount of tax exemptions was less than the total state revenue in the budget. In 1998, they totaled $6.8 billion less than state revenues; by 2008, they were $6.3 billion higher than state revenue. That’s a $12 billion swing, in the wrong way, over just ten years. This year, these tax exemptions, credits and deductions will total over $35 billion while our total state revenues are $25 billion.

Reform Michigan’s sentencing laws and correction costs to be benchmarked against surrounding states. In 1971, Michigan had fewer than 10,000 state prisoners, and the corrections budget made up only 2% of the state’s general fund budget. In 2009, there were almost 50,000 prisoners, and the corrections budget made up 21% of the state budget.

Michigan residents pay far more per prisoner housed than our neighboring states. That is way too much of a drain on our state’s revenues. We spend more on 50,000 prisoners than we do to educate 250,000 college students. That’s not the investment strategy we need for Michigan’s future.

Reform state government. Organize state government around four core functions: Education; Health and Human Services; Public Safety; and Sustainability and Development. Each of the four core areas would have a director who reports to the governor and is responsible for the effective and efficient delivery of services in these core areas of state government.

If Michigan is going to grow, we need to invest in the education of our children and people; in our cities and communities; in emerging sectors of our economy such as clean energy, life sciences, advanced manufacturing and engineering; and in protecting and nurturing our great natural resources for our children’s benefit. Focusing on these quality of life issues will do more to attract businesses and employees than a policy of chasing smokestacks through conventional tax credits.

We need leaders who have a positive vision for Michigan’s future and a roadmap to get us there instead of leaders who feed into anger and fear.

If only things in Lansing were that simple.
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