Keeping the Engler Revolution on track should be an easier task in 1993, given the change in the composition of the House of Representatives. With gubernatorial leadership, gridlock should give way to greater cooperation between the executive and legislative branches of state government.
The Mackinac Center urges the Governor to stiffen his already firm resolve to re-shape state government. In the next two years of his first term, he should take advantage of the new legislative opportunities to employ innovative, market-based prescriptions for public policy. He should take risks, experiment, shake up the status quo – because many of Michigan's longstanding and intractable problems are not amenable to resolution through mere tinkering at the edges.
The Governor is his own greatest asset when it comes to selling his ideas. He should step up his already considerable efforts at communicating with the people of Michigan. More regular television and radio appearances and commentary on his part could do much to educate people of the need for his '"Taxpayer's Agenda."
We see no reason to moderate this bit of advice first offered in our January 1991 evaluation of his first year in office:
... We urge the Governor not to shrink from the politics of (constructive) confrontation, for surely his opponents will not. That means keeping on the offensive with the Legislature, holding the feet of the big spenders to the fire. Make them explain and defend why Michigan should remain a high tax state. Make them tell us why we should forget that tens of thousands of residents pulled up stakes and left the stare in the 1980s, in great measure because Michigan's business climate had become overburdened by public sector intrusion. Make them account for every dime of misspent public monies in failed, wasteful programs. Make them justify why Michigan should pursue policies of welfare dependency, counterproductive regulation, and subsidized boondoggles while the rest of the world embraces enterprise, competition and free markets....
The Governor should use his forthcoming State of the State message to articulate a bold, detailed, and integrated vision for Michigan built around these themes: citizen empowerment over growth of bureaucracy, choice over coercion, accountability over indifference, competition over monopoly, incentive over dependency, individual liberty over state dictates, and a strengthened role for the states over federal encroachment.
Accordingly, we urge Governor Engler to marshal legislative and public support for the following measures in 1993:
Property tax cut. Michigan's high property tax burden is intolerable. The lifting of the freeze early this year means devastating assessment hikes in many communities. A legislated reduction should be a top priority. This, we are happy to acknowledge, was indeed the Governor's stated position as of mid-December 1992.
Further budget reductions. In spite of all that has been done in this area, the state's share of personal income has hardly budged from its level of two years ago. The Governor should follow through on his commitments to phasing out subsidies for the arts, reducing pork barrel expenditures, eliminating duplicative or wasteful boards, commissions and agencies, and resisting legislative initiatives the state cannot afford. Basic premises of every department should be reviewed; no activity of state government should be immune from a periodic review and justification of its continued existence.
Civil Service reform. A death and a resignation have given the Governor a majority of the 4-person civil service commission in his first two years in office. The extraordinary power of the civil service commission in its area of responsibility makes it a possible vehicle for change, a fact enhanced by a strong State Employer in the person of William C. Whitbeck. We urge the Governor to seize with renewed vigor the opportunities these developments make possible for the purpose of changing outdated civil service rules to increase management flexibility and reward superior performance in state government.
Privatization. The Governor should move swiftly to implement recommendations of the Michigan Public/Private Partnership Commission and to remove all existing state barriers that inhibit privatization by local government.
It is vitally important, however, that appropriate safeguards and procedures accompany any privatization to avoid cronyism, no-bid contracting, low-ball bidding, and sloppy contract writing and monitoring. The bottom line must be this: privatization should be pursued not for its own sake, but because it can be shown to reduce costs, prevent tax hikes, make markets more competitive, and provide for service equal to or better than possible with current government employees.
Proper cost accounting must be a cornerstone of the privatization process: none of the true costs of state provision of a service can be obscured, nor can the costs of implementing and monitoring private sector contracting be ignored. Wherever possible, government employees should be encouraged to form ESOPs (employee stock ownership plans) to take a publicly-provided monopoly service into the realm of a competitive privately-provided service. In other words, care and creativity should be watchwords of the privatization process.
Trucking deregulation. Michigan's antiquated system of trucking regulation should be scrapped without delay. It has cartelized the industry, driven up business costs and consumer prices while profiting only narrow special interests, and even contributed to air pollution by requiring many miles of unnecessary driving.
It simply makes no sense to require a Michigan-based firm to charge more to carry goods from Holland to Grand Rapids than a non-regulated Illinois carrier charges to take similar freight from Chicago to Grand Rapids.
Legal reform. The Governor should press for measures to discourage frivolous lawsuits and excessive damage awards; encourage alternative dispute resolution mechanisms such as grievance hearings, arbitration, and mediation to help avoid time-consuming and costly courtroom litigation; reduce abuse of the discovery process; revise joint and several liability for products liability so that manufacturers are not liable for more than their share of "fault"; and introduce modified comparative negligence so that persons more than 50 percent at fault in an accident cannot recover from other parties.
He should also consider creative solutions in which persons are allowed to opt out of the tort system for non-economic losses, such as pain and suffering, in exchange for payment of other losses without the need to establish fault or negligence.
Federal Mandate Relief. Unfunded federal mandates – new programs Congress requires the states to pay for – are becoming a major burden on Michigan taxpayers. They also strike at the very heart of the state-federal relationship as outlined in the United States Constitution. The states were not meant to be vassals of Washington. Governor Engler has brought this matter to the attention of federal authorities on numerous occasions; we suggest here an innovative strategy for alleviating the problem, a strategy that attempts to make our representatives in Congress more accountable for the mandates they vote to foist on Michigan.
We recommend that the Governor call upon Michigan's 16 federal representatives and two senators to appear before the Legislature (or a special joint committee therof) on a regular annual basis to provide an account of how they have fulfilled their constitutional responsibilities in representing the people of the state. At such an occasion, they should be invited to explain and justify the particular mandates the federal Congress has imposed. The Governor should use the weight of his office to encourage our representatives and senators to participate. He should ask the Michigan Legislature to adopt a resolution expressing its desire to see this happen.
Auto insurance reform. The overwhelming defeat of Proposal D last November may suggest a general satisfaction with Michigan's no-fault law, but there certainly are ways to improve the system. Consumers need more control over the types and amounts of insurance they buy. Access to non-economic loss damages through the tort system should be limited to severely injured persons and should be denied to those more than 50 percent at fault in an accident.
Most importantly, the highly intrusive nature of regulation needs to be eliminated, especially that which requires subsidies from rural and suburban policyholders to those in urban areas, so that market forces can operate for the benefit of consumers.
Educational Choice. The tepid effort at choice that was implemented last year should be augmented by bold moves toward genuine, meaningful public/private choice.
Work should begin now to reformulate state funding and tie it directly to the enrollment decisions of parents. State aid should follow students to their schools of choice, including schools in neighboring districts. Greater autonomy for teachers and local administrators on-site and a reduction in the educational bureaucracy ought to be ingredients in the mix. Ultimately, choice ought to embrace private schools as well, and in a way that does not involve state interference with the operation and diversity of private education.
Labor reform. The State of Michigan should seek to make organized labor more accountable to its membership and a more positive contributor to the state's economy by a) enforcing worker "Beck" rights, and b) repealing the Prevailing Wage Act. Under the Supreme Court's 1988 decision in Communications Workers of America v. Beck, workers are entitled to refunds of union dues that go for political or other non-collective bargaining purposes. The Prevailing Wage law raises construction costs in Michigan by effectively mandating that projects receiving any state money employ union labor.
We further urge that the State of Michigan enforce laws which prohibit public employees from striking and local governments from using tax dollars or tax-funded facilities to support or oppose ballot issues. In the case of the latter, the law was openly flouted last fall by a number of school districts where teachers and/or administrators sought to defeat the Governor's "cut and cap" property tax cut proposal.
Removing Barriers to Enterprise. Some of the above recommendations, such as selected tax cuts, trucking deregulation and legal reform, would serve to enhance the Michigan job-creation climate. We further urge, however, a much more comprehensive thrust: to search out and eliminate all unnecessary barriers to the creation and growth of productive enterprise.
The Governor is considered by too many (inaccurately, we believe) as a man with a meat axe. Husbanding taxpayer resources is important – and we would like to see more of it – but more attention must be focused on the numerous ways in which government hobbles, discourages, and harasses both existing and would-be entrepreneurs through its red tape, arbitrariness, and stifling regulations. This approach starts with a renewed appreciation of the entrepreneurial ethic, the spark that prompts men and women of all educational and economic levels to take initiative, assume risk, and strike out in hopes of profit.
Whereas some who dabble in the public policy arena put their faith in what the state can coerce, we suggest a more promising option – putting our faith in what free and creative people can accomplish. In essence, the interventionist approach is a condescending and elitist one: it says that politicians and bureaucrats are smarter and better people than working men and women who send them to Lansing and pay their bills. That view is usually wrapped in appealing rhetoric about "compassionate government" even though it is culturally backward, if not downright medieval. We urge an enlightened perspective across state government, one that seeks to eradicate anything that suffocates peaceful, productive activity.
Accordingly, all department directors should be instructed to search for any and all instances where needless or overly burdensome licensing requirements act as barriers to individual and business enterprise. A statewide conference of small businesspeople should be called to solicit instances of unfair state competition with the private sector, as well as proposals to end it. And state government should review zoning laws and building and construction codes which – if not amounting to outright "takings" of dubious constitutionality in many cases – are becoming significant hindrances to low-income people and start-up entrepreneurs.
It must not be forgotten that Michigan was headed down a destructive path by the time of the fateful 1990 gubernatorial election. State government had grown at twice the pace of either inflation or personal income in the 1980s. Its intrusiveness was driving people and businesses elsewhere. Our income levels, once higher than the national average, had fallen below the national average. Our inner-city schools were failing increasing numbers of children. It was time for a change.
John Engler's election has provided a window of opportunity for change to actually happen. He has demonstrated decisive leadership in many areas, and has kept to his word. State government is no longer something that just grows and grows without question and without accountability. Things are changing, but the challenge of completing that change and making it stick is as great as ever. This is a revolution in its formative stages, and it can still be aborted by a weakening of resolve, a penchant to compromise, or inattention to detail.
We congratulate Governor John Engler for his performance these last two years as our chief executive. And we earnestly implore him to re-charge his energies, fire up his troops, and press on for the sake of Michigan's future.