State Budget Deal Shows “Lawmakers’ Budget Priority Was ‘Business as Usual,’” says Center’s senior legislative analyst

Nods toward genuine reform are swamped by spending increases and a surrender to state employee unions

For Immediate Release
Wednesday, Oct. 31, 2007

Contact: Jack McHugh
Senior Legislative Analyst

MIDLAND — In response to last night’s state budget deal, Mackinac Center Senior Legislative Analyst Jack McHugh observed this morning, "Those of us poring over the final budgets are scratching our heads looking for the draconian ‘cuts’ the public had been told would be necessary despite nearly $1.4 billion in state tax hikes." McHugh pointed to the following budget items to illustrate the overall pattern:

  • Department of Corrections: $2.078 billion in gross spending, compared to $1.940 billion enacted the previous year.

  • Department of Labor and Economic Growth: $1.301 billion, compared to $1.231 billion enacted the previous year.

  • Higher Education: $1.896 billion, compared to $1.787 billion enacted the previous year.

  • Department of Community Health: $12.048 billion, compared to $11.196 billion enacted the previous year.

  • Department of Human Services (Welfare): $4.588 billion — an increase of more than $80 million, plus 171 new employees.

McHugh noted that there were a few economies, and he praised one in particular: The state will contract more of its foster child and adoption services to private social service agencies. "While only part of this proposal was adopted, it’s a foot in the door for additional reform later," he noted.

"But the big picture," McHugh continued, "is higher spending and maintaining the government’s status quo — despite the state’s declining employment, its falling home values, its stagnant or declining population and Michiganians’ decline in real income since 2001. Remember that while the state will have fewer prisoners than expected, gross prison spending is up, and prison guards will still be paid almost a third more than the national average. State government employees are still getting raises. Public school employees will still get costly defined-benefit pensions, and they will still receive retirement health care benefits that are nearly unheard of in the private sector. State universities still face no state budget incentives to contain costs, either. You have to wonder what policymakers meant by their dire warnings of a ‘crisis.’"