Playing the Budget
Voodoo Alchemy Card

by John Lindstrom
Gongwer News Service
August 13, 2010

There are moments of clarity and realization. Sometimes they happen on the road to Damascus. Sometimes they happen when one is furiously engaged in work long past the time he should be in bed. It’s really rather magical when it happens.

At about 2 a.m. on Wednesday, August 4, when political officials were still counting stray votes from the primary of the day before, when partisans of both GOP gubernatorial candidate Rick Snyder and Democratic gubernatorial candidate Virg Bernero were having a last legal celebratory quaff and reporters were grinding through the final stories they would write about the election, came a bulletin from The New York Times: “New York Legislature Completes Budget 125 Days Late.”

Poof! Magic!

Oh yeah, budgets. Michigan still has to finish the 2010-11 budget.

As odd as Michigan might be with its fiscal issues (most states start their fiscal year in July; Michigan has for some 35 years started its in October), New York is even odder. It’s fiscal year starts in April, and through some magic of law and affirmation passed down from the original regal charters — and through the Articles of Confederation past the Constitution and with the blessings of Tammany Hall and who knows what all — the state doesn’t have the moral abhorrence that Michiganders seem to have towards continuation budgets and ongoing resolutions and whatever contrivances are needed to keep cops on the streets and teachers in the classrooms.

Still, the Times bulletin provided clarity. It accentuated the realization that government is a mix of politics and policy. Ultimately, for all the interest in politics, it is policy that should dominate the arts and science of governance.

Policy should predominate, yet reality is that the art and science and mostly the voodoo alchemy of writing budgets is drowning in the overflowing political gutter. All of which will likely present us with a painfully entertaining magic show in those last 45 or so days that Governor Jennifer Granholm and the legislature have to complete the 2010-11 budget.

No budget is easy, even when revenue flows like wine at an abundant harvest or when magicians provide every kid with a rabbit. But, jeepers, friends and neighbors, the state is running out of even voodoo alchemy now to resolve the budget. Given the strain the state has endured searching out any revenues, as well as the least painful ways of cutting expenses, it is a wonder Ms. Granholm has not issued executive orders requiring all loose change found on the streets turned over to the state.

Add to the mix the cobbling of a budget through a split government, and the act’s difficulty is magnified by a factor of 10. Then add the November election to the cauldron, and suddenly actually sawing some lovely assistant in half doesn’t seem so hard compared to completing the budget.

Remember that back in the dark days of winter we were somehow assured we would not be at this stage now. Ms. Granholm, to great applause, called on the legislature to complete the budget by July 1. Candidates running to succeed her said they would compel the legislature to finish future budgets in a super-timely fashion. School districts and cities and counties all pleaded with lawmakers to complete work on the budget by July 1 and got reasonable assurances such would occur.

At least the budget was done for the schools, but the rest of the budget remains in limbo. There were actual financial issues that needed resolving, and those were in the purview of Congress. Obviously, most people in Michigan, let alone the U.S., had no idea of what a Federal Medicaid Assistance Percentage was. Most people in Lansing didn’t know what it was, and still could not tell you how it was supposed to work. Oh, but everyone knew that without that weirdly named item the state budget was going to get axed heavily, again.

So finally, Congress has acted and the state will get most of the money it had hoped to get, which still leaves the process of resolving the budget.

With that comes the politics. A year ago Senate Republicans essentially forced through a budget with no new revenues, and bitter cuts to popular programs. Every effort by Ms. Granholm and legislative Democrats to either stand them down or force them to retreat failed.

Having succeeded once, along with facing the best chance Republicans have had in years to recapture the governor’s office, and with a fair chance of taking total control of state government, Republicans will not bend on a budget doing anything less than what they accomplished a year ago.

From their standpoint, however, it’s not just the fact that the budget can be a tool for political gain. They see this fight as one that will lead the state towards what they anticipate — presuming as they do that Mr. Snyder will win on November 2 — will be the start of a completely revamped government.

Senate Majority Leader Mike Bishop (R-Rochester) made the point again this week, as he has during his entire tenure as leader, that the goal has to be to reform, that is re-form, state government into something that is essentially smaller and does less. It’s a vision that goes back further than former Governor John Engler or even former Governor George Romney to probably the administrations of Governors Comstock and Groesbeck. For three generations now, government has grown, no matter if Republicans or Democrats were running the show, and it remains somewhat unclear what a smaller government is supposed to be like and do.

No matter, Mr. Bishop said this week that he and Senate Republicans have had to fight endlessly against Ms. Granholm, who refused to accept a vision of smaller government.

Of course, in Ms. Granholm’s eyes, and in the eyes of many people, the function of government is to protect people, is to provide a leveling influence and offer assistance where no other assistance is available.

This means both sides are staying true to their beliefs, which further means compromise becomes harder and harder to accomplish. Which means October 1 without a budget resolution seems ever closer.

Yet, no side wants to go into October 1 without a budget resolution. Talk about the effect of politics on the budget: not having a budget done by then is tantamount to political suicide. But who would fall on the sword? While all signs now are that it could be a Republican year at the polls, does the GOP want to go into the election with the cry in their ears from Democrats that they are stealing Junior’s milk and hobbling Granny’s walker? Do Democrats want to have to continue to endure the taunts of tax and spend as they campaign?

Fear of what the political backlash could be is the biggest driver for a budget resolution. But, again, to do so requires compromise, and compromise is now an unknown word in state government.

So what is left: well, the voodoo alchemy card. This week Ms. Granholm began laying out some budget strategies that would bring in revenues without any kind of a general increase. If fact, they may include some revenues she can conjure without legislative meddling, which would really be a neat bit of black magic.

Remember that a budget is not holy writ; it simply has to balance on paper on the day the fiscal year starts. (It is always nice to have a realistic budget, even better to have one where the evidence indicates the money will come in as anticipated to meet the spending.)

And since politicians are fond of saying that government should be run as a business or a family, it is helpful to recall that really no business or family gets through a year without tinkering with its budget. When has anyone ever been able to make a budget work exactly as anticipated? So why should government be hung by the thumbs because it has to tinker with its budgets? Hmmmm? Hows come everyone else gets to use voodoo alchemy but government ain’t supposed to? Hmmmm?

Without voodoo alchemy there is a legitimate fear and chance Michigan may once again come close to the brink of a fiscal year political calamity. Since it appears unlikely, at this juncture, either side will be willing to bend to make honest compromise, a little dishonest compromising will likely be in order, drawn from the manual of voodoo alchemy great politicians have passed on to each other over time.

When the budget is resolved, in whatever odd-looking fashion it is resolved, it will provide another moment of clarity and realization: that really this isn’t the way to make a budget. Yet, it will provide another clear insight that whomever is running this tent show in a year very well could still be boiling alchemistic potions and sticking pins into policymaker effigies to make it all work.

But if it ensures there comes no bulletin in the pre-dawn hours of November 3 that the Michigan Legislature has completed its budget 33 days late, it will be a magic trick worth enduring this time.

John Lindstrom is publisher of Gongwer News Service. For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.