by Neil Munro
October 1, 2009

We’re not as well off as we used to be here in Michigan. Overall, we don’t earn nearly as much as we used to.

What’s worse, this new constraint is very likely to be with us for years, not months, the experts say.

One result is that our lawmakers and local elected officials at every level have fewer tax dollars to spend. That’s mainly because of the near-collapse of the Big Three U.S. automakers in the wake of the sudden and severe recession in our national economy.

It rained nationally, but it’s still pouring here.

Almost overnight, it seems, we’ve gone from among the most prosperous states to worst in the nation in terms of declining payrolls and pay levels.

While Governor Jennifer Granholm has proposed a 12-percent cut in state government spending, she also would increase taxes.

That’s in the context of the current annual state budget of about $29 billion raised in the state and $15 billion from the federal government. Overall, the tax shortfall caused by the economic slump is $2.7 billion.

The obvious question before lawmakers, and ultimately the voters, is whether to tax the citizens more heavily to make up for the decline in revenue, or to offset that shortfall by reducing spending.

We most likely will get some of both. But it is in your best interest, and the state’s, to do the latter.

Look at it this way: the members of the United Auto Workers union have long since agreed to accept lower pay and reduced benefits on the basis that the companies they work for no longer can afford business as usual.

And it was the UAW pay and benefits package that had been the gold standard, so to speak, for other unionized occupations, such as teaching. But do you suppose the average Michigan teacher at a UAW-inspired $58,482 a year turns out a better scholar than a teacher in Indiana at $49,569?

When the Big Three automakers no longer can afford business as usual, neither can the state they made so overwhelmingly prosperous for so long.

That party is over for Michigan. No foreseeable number of movies churned out on the Pontiac site of the former General Motors truck and bus manufacturing complex ever will generate greater tax income for various levels of government than those factories did.

Granholm’s decision that her job now pay $129,000 a year rather than the previous $177,000 reflects the new reality in a way current teacher pay does not. She sensibly has ordered comparable reductions of other elected officials at the state level.

Let’s face it. When a governor has to take a pay “haircut,” everybody living on taxpayer dollars should. It will be a matter for negotiation, of course, in the case of public employees such as teachers who are represented by unions. So one might think “lots of luck.” But 60 percent of the UAW members in the auto industry voted for reductions in their own compensation. Would teachers be less able than factory workers to understand there’s been a seismic economic decline in Michigan and that some employee indulgences just aren’t affordable now? Not likely, one would hope.

Personal income in this state has fallen more than 10 percent below the national average; an historic and shocking reversal. And as many as 500,000 jobs reportedly have been lost here in recent years, because of both routine reasons and the economic tailspin.

The overall economic turmoil in the state also affects local governments, of course. So normally booming Oakland County’s employees, too, face a pay cut, which must be negotiated in some cases. That is to avoid layoffs and reductions in basic services.

It should be obvious, but too often isn’t, that when shrinking tax income forces government spending cuts they should come from lower salaries, not workforce reduction. The latter inevitably reduces the public services the citizens not only are entitled to but are paying as much as ever for, and still need.

The Citizens Research Council of Michigan says as much as 60 percent of school employee costs are benefits, not salaries; surely there is room for cutbacks there.

And instead of reducing financial assistance to college students, as the state has proposed, the money should be found elsewhere, perhaps from the college payrolls themselves. The last thing we should be doing is making it harder for our citizens to make themselves qualified for higher-paying jobs, which, in turn, help bolster the state’s own budget.

It has been apparent, however, that the first impulse of too many of our public officeholders is to increase the tax rate on an already shrinking economy or reduce services, or both.

But we call people on the public payroll “public servants” for a reason. They’re to function for our convenience, not we for theirs.

Neil Munro is the retired editor of the Oakland Press in Pontiac.