Second Half Strategy
December 26, 2014
Governor Sunshine is running off the field at halftime. He stops and cheerfully tells the sideline reporter, “It was great that our offense finally got the ball across the goal-line.”
Sideline reporter: “But, Governor, that was a safety, not a touchdown.”
Governor Sunshine: “We’ve challenged that call. We’ll appeal to the crowd. We believe seven points will go up on the board in the second half. Have a nice day!”
The first half of the Snyder administration was largely devoted to stabilization of public finances and making significant accommodations to the private sector economy. Budgets are written on time and there’s no annual scramble to cut billions from the State budget. At least for now, there aren’t complaints about business taxes, although that’s an evergreen issue that’s sure to be back before long. We’re so far below the Headlee limit for taxation that it’s not even part of the discussion.
Gov. Snyder and others deserve a ton of credit for getting Detroit in and out of bankruptcy in better shape than anyone had a right to expect. After a decades-long demographic and economic exodus, the looting of the municipal pension funds, broken promises from the State, the criminal Kilpatrick administration and ridiculous bond loans to finance municipal operations, there was no realistic alternative. Now Mayor Duggan gets to proceed with the toughest job in America.
The first half of the Snyder administration also had publicly financed expansion of the private sector economy. Healthy Michigan, the state Medicaid expansion attached to the Affordable Care Act, allows the health sector to be compensated for providing care to people at the margins of economic life. In adopting it, we managed to avoid a self-inflicted wound to our economy and the health of our residents that many states chose to accept for ideological reasons.
Gov. Snyder came out of the November election with the momentum of his own reelection and expanded majorities in the House and Senate for his Republican Party in the next legislature. That momentum dissipated in a lame duck legislative session of very little constructive accomplishment. That invites doubt for the second half of the Snyder administration.
Now that finances are stabilized, most interest groups that are concerned with economic growth – including Business Leaders for Michigan, the Michigan Chamber of Commerce and the Detroit Regional Chamber – believe that we need to attend to infrastructure investments that have been too long deferred: namely, roads. But increasing taxes to pay for roads was too heavy a lift for the House in the 97th Legislature – even in lame duck. Maybe those representatives who opposed the Senate transportation plan have higher political ambitions that are incompatible with voting for taxes. Maybe they really believed there is $1.2 billion in free money floating around in the budget if we’d finally just get serious about the war on waste, fraud and abuse. Maybe some of them would like to see the whole State highway system revert to gravel.
The road-funding proponents should have an enormous financial advantage in the May ballot campaign. Interest groups across the spectrum – that have money – want the proposal to pass. On the other side, the dynamic is like the anti-tax Proposal 5 of 2012. The only organized political opposition comes from those groups that are reflexively opposed to any taxation and the reenergized TEA Party fringe that comes out strongest in federal mid-term years. Ninety-four percent of the $5.3 million campaign for Prop 5 of 2012 was funded by Matty Moroun, who wanted to gin up populist anti-government momentum that would carry over to his $34 million Proposal 6 campaign against the NITC Detroit-Windsor bridge. He came up way short on both efforts. His side of Prop 5 got 31 percent of the vote and his side of Prop 6 got 41 percent of the vote. But you can’t dismiss the potential for some angry billionaire to wreak havoc in a ballot campaign. There are plenty of vehicles standing by that could provide anonymity for a demure raging bull.
Money may not be the controlling variable, anyway. As several veteran Lansing observers have pointed out, voters are never eager to vote for higher taxes. And the electorate in May 2015 will be much different than that of November 2012. Can establishment Lansing overcome angry grassroots conservatives? The ballot proposal is a gamble, but it’s the best the governor could do.
Meanwhile, we also need investment in human capital. There are good jobs available but shortages of qualified candidates. We’re still among the states with the highest unemployment rates, and there are far too many Michiganders who are underemployed or out of the work force. We need an education system that can prepare young people and economically dislocated people to become productive participants in economic life. We need a private sector that is willing to invest in growth instead of quantitative easing, stock buy-backs and corporate inversions.
The 98th Legislature will probably be a tougher place than its predecessor to accomplish constructive things. There is a boisterous contingent that comes like Christopher Columbus to a new world to be conquered. If they know just one thing, it is that government is too big and it must be shrunk – no matter what history or any interest group has to say.
I think Gov. Snyder and those who seek growth and progress will have no choice but to move further away from the ideological right in the next four years. If we really want Michigan to be the comeback state, its promise has to extend to more Michiganders. It’s time to set aside the great game of political annihilation and build a policy environment where more, not fewer, can succeed.