Michigan, like the rest of the states, has a balanced budget requirement. Lawmakers are not supposed to go into debt for routine daily expenses. Legislators interpret this to mean that they can spend all the money they collect in taxes each year, plus last year’s unspent funds.
But they don’t have to. This is why we’ve recommended our Sustainable Michigan Budget target, which is based on the percentage growth of the state’s population each year, plus the inflation rate.
Legislators have a large amount of cash at their disposal, thanks to last year’s restraint and more tax revenue than expected.
The question is whether they are listening to the message of restraint.
Gov. Gretchen Whitmer doesn’t seem to be. She’s got a plan for all but a small portion of the state’s surplus funds.
The benefits of keeping a lid on spending increases are real and important, regardless of whether Democrats or Republicans are in charge. In this session, the majority caucuses in the Legislature are Democratic, and they have not shown an interest in restraint.
There is a time and a place for making recommendations that legislators are likely to adopt. We are making a number of suggestions that are politically feasible. But it is also important to recommend good policies, whether or not legislators are going to consider them this year. The Sustainable Michigan Budget is a good recommendation, but so far it has not been accepted.
Michigan’s budget should not grow faster than residents’ ability to pay, and the state’s balanced budget requirement was likely enacted as a way to honor that principle. But our budget target ensures that state government only grows at sustainable levels.
Lawmakers are not likely to adopt our recommendation until they see the problems with spending every dollar they have available, understand the benefits of sustainability, and endorse the budget target as they run for office. That’s not going to happen out of the blue. It’s going to take time to get the idea out there and change people’s minds. When that happens, candidates will conclude that taking up this cause is the popular move.
Think tanks like the Mackinac Center can operate on a time scale that endures beyond the scope of today’s politicians. And with good strategy, clever marketing and consistency, we can enact good policies even if they are politically impossible today.