The first three weeks of Gov. Snyder’s administration has provided plenty to cheer, especially on fiscal policy issues.
Cheer No. 1: Candidate Snyder said more than once that the extraordinary cost of providing expensive and generous benefits to public employees would need to be reduced. He then repeated this as Governor-elect Snyder in a Washington Post article. In his first State of the State speech he courageously brought up the state’s massive unfunded post-retirement employee benefits liabilities and costs, which theoretically exceed $50 billion. Our new governor appears to be ready to address these fiscal policy problems openly and directly.
Cheer No. 2: As in his campaign, Gov. Snyder has promised to replace the hated Michigan Business Tax with a flat corporate income tax of 6 percent, which if successful, could mean a $1.5 billion business tax cut. This may have a profound, positive impact on job growth in Michigan. Not only is Gov. Snyder prepared to take less money from business owners, he wants to make their burdens easier to manage, too.
Cheer No. 3: Gov. Snyder surprised his State of the State speech audience with the proposal to repeal wholesale Michigan’s archaic item pricing law. Even former Attorney General Frank Kelley — who made a career of enforcing it — endorsed its repeal. This regulatory change will lower the cost of doing business for countless job providers in Michigan, freeing up resources they can use to invest in existing or new businesses. This was a deft maneuver and one we hope to see more of in matters of regulation.
Cheer No. 4: Gov. Snyder has promised to no longer count unverifiable estimates of “spin-off” jobs allegedly created when the Michigan Economic Development Corp. grants special favors to particular firms. While eliminating the agency’s discriminatory tax breaks and subsidies would be better, more honest accounting is a giant step forward in transparency and accountability for an agency that has had little of either in the past decade. New MEDC President and CEO Mike Finney has directed his staff not to report alleged spin-off jobs in its press releases.
Gov. Snyder seems to be off to a good fiscal policy start on balance. Let’s hope it continues.