Gov. Rick Snyder and the Legislature
deserve considerable credit for improving Michigan’s public policy landscape
during the last year. But with much work still to be done, what changes will
occur in 2012?
The governor will announce his policy proposals in
an upcoming State of the State speech, perhaps as early as January. A key
indicator of Michigan’s future will be whether he forgoes expansions of
government influence in our lives — and suggests some key limitations as well.
Gov. Snyder has made progress in getting the state back on track. He will honor that progress — and the people of Michigan — if he continues to streamline an expensive and demanding state government.
proposed limitations and expansions of state government in State of the State
speeches is one method the Mackinac Center has used to gauge each governor’s
willingness to trust Michigan’s residents, since these proposals indicates how
much control over people governors believe Lansing should exercise. Last year,
for instance, Gov. Snyder proposed nine expansions and three limitations. That’s the bad
The good news is that friends of freedom probably
received more than they might have hoped. The state business tax was simplified
and trimmed by $600 million; unemployment benefits were reduced by six weeks,
saving taxpayers $240 million annually; and schools and municipalities were
offered incentives to reduce their annual costs.
Economic Growth Authority, a so-called “jobs program,” was mercifully put down;
the scope of film subsidies to private business was significantly reduced;
costly project-labor agreements were ended; and Michigan’s archaic item-pricing
law was repealed. There were a few missteps, such as the new pension tax, but
on balance, it was a good policy year for the Great Lake State.
Center’s tallies of proposed government expansions and limitations go back to
Gov. William Milliken’s 1969 address. Obviously, our counts are not a precise
measure of a governor’s proclivity to tell us what to do. It’s sometimes
difficult to classify a policy — is a targeted tax credit a limitation or
expansion? — and sometimes a governor’s actions diverge from his or her
proposals. Still, the count indicates an administration’s attitude toward
The all-time high for proposed expansions, 24, was
made by Gov. Jennifer Granholm in 2008. She also holds the record for the
highest average number of proposed expansions (16.4). Gov. Jim
Blanchard holds the distinction of proposing the lowest average number of
government limitations at 2.1.
Remarkably, in 1974 Gov. Milliken
promised no new expansions of state government, a feat that has yet to be
matched by any subsequent governor. His 1974 speech is what a State of the State address should be: short and sweet. It covers 550 words, or about six minutes with polite applause. In many ways,
it is a model for the speech Gov. Snyder should give. Consider
this Gov. Milliken line: “They (Michigan residents) want us to meet their
priority needs while preserving the largest tax cut in Michigan history — and
cutting taxes further when possible.”
With zero new proposed expansions of government,
would be off to a good start. But he should consider several limitations that
would free the money and creative energies of Michigan’s people:
- Continue reining in the cost of nonsalary benefits for
government employees. Billions of dollars can be saved by benchmarking these
benefits to private-sector norms. Pension reform is also necessary, including a
shift from defined-benefit to defined-contribution plans.
- Eliminate Michigan’s personal property tax. This “tool
tax” discourages investment. Replace the revenues with spending cuts only.
- Pass right-to-work legislation. Liberating Michigan’s
workers is arguably the state’s most promising economic development initiative.
Failing that, right-to-work should be extended to public-sector employees at
the least and an elimination of collective bargaining privileges for unionized
government workers should be considered.
- Address the state’s regulatory regime, particularly the
environmental permitting process. The current system is a deterrent to
businesses’ locating or expanding in Michigan.
Gov. Snyder has made progress in
getting the state back on track. He will honor that progress — and the people
of Michigan — if he continues to streamline an expensive and demanding state
Michael D. LaFaive is director of the Morey
Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research
and educational institute headquartered in Midland, Mich. Permission
to reprint in whole or in part is hereby granted, provided that the author and
the Center are properly cited.