Americans for Prosperity-Michigan

Detroit News: Remember 2007

Remember 2007: Budget talks follow same course that led to tax hike, no reforms two years ago
Detroit News editorial     –     Sept. 6, 2009

The current round of budget negotiations in Lansing is following distressingly close to the course taken in 2007, when Gov. Jennifer Granholm and House Democrats talked hopefully of spending reforms, pushed the bargaining to the brink and, in the end, used the threat of a government shutdown to force through a massive tax hike.

That budget deal came without a commitment to a single major change in the way government operates.

With the Oct. 1 deadline approaching for the budget talks, the script the governor and lawmakers are following is too familiar.

Last week, Granholm accepted an invitation she rejected a couple of months ago from leaders of the Michigan Economic Development Corp. to help mediate a budget deal. When the offer was first made by the MEDC members — Matt Cullen, Paul Hillegonds and Tom Lewand Sr. and consultant William Rustem — it was met with hostility by the administration, who more or less told the group to mind its own business and leave running the state to them.

But now these good men have been brought to the table to talk reform on a deadline.

Flash back to 2007, when Granholm convened an Emergency Financial Advisory Panel to recommend a budget solution. The group, which included Hillegonds, proposed a broad outline of reforms, spending cuts and tax increases.

The governor tossed out everything but the tax hikes and used the reputations of the panel members to buy cover for pushing them through.

Hillegonds spoke openly about his disappointment in the way the panel’s findings were manipulated. That Hillegonds is willing to march into the breach again speaks to what’s at stake.

The $2.7 billion budget shortfall is not a surprise. It has been building all year. And yet last Thursday was the first time Granholm and legislative leaders sat down together for a serious discussion about spending reform. Again, that mimics the 2007 scenario and suggests that reform remains the lowest priority.

Participants in Thursday’s discussion say there was an encouraging openness to reform by all parties at the table.

That’s good news.

But as always, getting consensus on reform hinges on the ability to forge compromises on spending cuts and tax hikes, and there remain huge gaps on those issues.

Even though the reform conversation should have begun in February, it’s not too late to get meaningful structural changes passed.

Most of the proposals are shovel-ready. The ground work has been done both by lawmakers and outside groups. The proposals can be easily converted into bills.

Granholm and lawmakers should remain under intense pressure to get that job done. The ticking clock should not be used as an excuse to again avoid restructuring government.

In 2007, after a very brief government shutdown, a few spending cuts and a big tax hike were adopted on the promise that reforms would follow. They didn’t.

This time, there should be no cuts in services and no hikes in taxes until there’s an agreement on reforms.

Taxpayers should not be asked to pay more, and citizens shouldn’t be required to accept less, while government remains so inefficient.

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