Laying the Groundwork for Reform

Over the past two decades, Michigan's state budget has increased at a remarkable rate. Indeed, if one compares the budgets for fiscal years 1975-1976 and 1995-1996, one sees that state spending has nearly quadrupled over the past twenty years.[1] To put this increase into context, one should consider the effects current spending levels have on Michigan families. The 1995-1996 total state budget of $28,080,901,387[2] represents a contribution of $3,021 for every man, woman, and child in Michigan. In an era of stagnating wages, Michigan families have been asked to bear increasing burdens by the state--burdens that in many cases threaten the very well-being of these families.

The following analysis examines the 1995-96 fiscal year state budget (with the exception of K-12 public school funding, capital spending, and the Departments of Civil Rights and Civil Service) and asks of each program a fundamental question: Does it help advance civil society in Michigan, and help build a culture where free and responsible citizens have opportunities to pursue their unique goals and values? It recommends 136 specific program changes the state should make during the next fiscal year. While certainly not a complete guide to how government should be restructured over the next several years--more dramatic and comprehensive change needs to be implemented--it provides a framework for the debate. It recognizes the political constraints that reform-minded legislators face, while at the same time laying the groundwork for long-term change. If the state is going to take seriously the task of reestablishing civil society, it should consider the reforms listed within and the start the process now.

The reforms suggested can be grouped into three general classifications:

  • Eliminating unnecessary and, in some cases, counterproductive programs. This report lists over 100 specific programs that should be eliminated because they either 1) provide welfare for Michigan corporations, industries, or other special interests, or 2) weaken families, churches, private assistance organizations and community groups by taking resources from their members and foreclosing opportunities for flexible, accountable, and efficient service. All are vestiges of a political society that erodes the virtues of responsibility, charity, and independence.

  • Rolling back unjustified program growth. This report identifies several programs that experienced unjustified growth during the past several years. Examples include funding for community colleges and public universities, which grew at a rate far exceeding inflation and enrollment and funding for state mental and veterans' hospitals, which continued to grow dramatically despite decreased occupancy rates.

  • Contracting out services that can be handled more efficiently by the private sector. Over the past fifteen years there has been a worldwide movement toward privatization. Governments at all levels have realized dramatic cost savings and quality gains due to contracting out services once handled by government.[3] The state of Michigan should follow the lead of these pathbreaking governments and consider the privatization of a number of services that are still conducted by the state. The most notable program that could be privatized, at least in terms of cost savings, is the management of correctional facilities. If Michigan were to experience cost savings comparable to those experienced by other states from the privatization of their correctional systems, it could expect to save more than $275,000,000.[4]