Assistant Director of Fiscal Policy
James M. Hohman is assistant director of fiscal policy at the Mackinac Center for Public Policy. He holds a degree in economics from Northwood University in Midland, Mich.
By James M. Hohman
Despite Michigan's poor economy, state government revenue is expected to increase from this year to next. Nevertheless, the state is expected to spend $1.6 billion more than it receives in revenues. … more
State tax receipts are largely determined by how well a state's economy is doing. When workers earn more, they pay more income taxes. When consumers buy more, they pay more in sales taxes.
Because of those ties to the economy, every state's tax base is naturally exposed to cyclical factors. But each state responds differently. Over the past year, Michigan's has been far less responsive to the recession than most states. … more
But most of the job gains and losses in the state are unheralded. Consider this chart of quarterly job gains, losses and MEGA announcements. … more
However, Glazer uses only snapshot views of what the per capita personal income or economic output is in a state right now. He ignores trends. But you can't just wear a white suit to become Mark Twain, you have to grow to the role. … more
In 2003, Michigan had the seventh highest spending among the states on public universities. Appropriations here have been fairly level since then, but we were still the 10th-biggest higher ed spender in 2008. Even with sideways revenues for half the decade, Michigan has been surpassed only by Ohio, Pennsylvania and Georgia in total dollars devoted to higher education. … more
Rep. Smith and others seeking tax hikes (on both sides of the aisle) often claim that because of changes in the state's economy Michigan's tax system extracts fewer dollars per unit of economic activity than it did in an earlier era.
They are mistaken. Indeed, in its ability to suck revenue from a given level of (declining) economic activity, Michigan's tax system has outperformed 31 other states over the past year, despite being affixed to the nation's worst economy. This fact contradicts the claims of would-be tax raisers that our system is "broken" and needs to be "modernized." … more
Here's a look at recent monthly job gains and losses: … more
According to the Bureau of Labor Statistics, Michigan's movie and sound industries employ 5,222 workers as of March 2009, the most recent month available from the quarterly census of employment and wages. This industry declined by 31.2 percent from a peak in 2002 of 7,586. And even at its peak, this industry accounted for only .2 percent of the state's total employment. … more
Cross-cutting and underlying principles are the foundation of our recommendations
— Look to optimize across all levels and units of government
— Address underlying structural issues
— Be holistic in the approach (look at all aspects of the budget and government operations)
— Create a roadmap to fiscal stability
— Be of sufficient magnitude to make a difference
All clear now? Good — let's get on with it.
Seriously, these are the kind of vague generalities and bureaucratic gobbledygook where you can almost rearrange words in any particular order and they're no less meaningless.
In contrast, here's an example of what serious, concrete, specific recommendations for transformational reform really look like. … more