Over the last few months, I have asked a number of Michigan‘s top political and business leaders if they have ever seen an economic crisis as serious as this one.
They all said no. Former Governor Jim Blanchard did point out that the deficit was actually worse when he took office in 1983. So was unemployment. But back then everyone assumed -- correctly -- that the state’s key industry -- autos -- would bounce back. The economy would turn around and the crisis would go away.
Today, nobody in the know thinks the present crisis is going away anytime soon. This year, the state is on a collision course with reality, and that is going to mean real pain for a lot of people sometime before September 30.
That‘s when the fiscal year ends, and the budget has to be balanced. Right now, the state is running a deficit that is almost certainly more than a billion dollars. By May, the state is likely to be in the scary position of not having enough to pay bills that are immediately due. What happens then?
Most likely, state employees will be laid off. Parts of state government may shut down. There could even be payless paydays for those still on the job. Things have gotten so bad that the state cannot borrow to cover the shortfall. The state treasurer says Michigan has already borrowed as much as our Constitution allows.
And he has to come up with $1.2 billion to pay short-term loans by September. There is even talk of temporary borrowing from state employee retirement funds to bridge the gap.
And we still have no replacement for the Single Business Tax.
We’re on course to have the roof fall in. And our political leaders are failing us. They knew what was coming. And yet, they continue to play partisan games. We have a Democratic governor who seems too weak to fight hard enough for what she knows is right. We have an obstructionist Republican leadership who seem not to care if the state’s credit rating is destroyed, as long as they can make Granholm look bad and give the wealthy more tax cuts.
What is most baffling to me is why Jennifer Granholm wasn’t out there leading the charge for her service tax from day one. She won by a landslide. She can’t run for re-election and no other elected job is likely to be open to her.
Why won’t she use her political capital?
Instead, she has allowed Mike Bishop, a state senator who represents a fraction of one county, to set himself up as her equal.
We need our governor to tell us openly, without sugar-coating, how bad the situation is and how she would fix it. We need both parties to act as if Michigan matters more than politics.
And we need to tell them to do this right now.
Or frankly, you can stop worrying about Michigan’s future. Because it won’t have one.