There is one big difference between the state and federal governments, by the way. Washington doesn’t have to live within its means. It can borrow and borrow and borrow, which is why we have an eleven trillion dollar national debt.
State governments have to live within their means. That is, if they take in a billion dollars, they can spend only a billion. If they take in less, they have two choices. They can tax us more …
Or they can cut spending. Most of the time, and this year for sure, Lansing is going to have to cut. Here’s how it works:
Every few months, there is something called a revenue estimating conference held to assess how much money is coming in, and how that compares to what the government planned for.
When revenue is down, that usually means the government better start thinking about cutting its budget. Normally, the governor does this, by issuing executive orders.
Cutting the budget earlier is almost always easier than doing it later in the year, after most of the money has been spent.
Everybody expects that this month’s revenue estimates will be down significantly. If so, budget cuts are expected to speedily follow.
However, in all likelihood, these aren’t going to be the last budget cuts of the year. Michigan‘s fiscal year runs until the end of September, and our economy is expected to continue to weaken.
The University of Michigan’s annual economic forecast predicts that the state will lose another 108,000 jobs this year. Since the unemployed don’t contribute oayroll taxes, that means even less revenue for the state.
We are going to have more belt-tightening to do. Now, there are several ways our leaders can deal with these looming deficits. They can do what they did two years ago:
Engage in nasty partisan political warfare, with both sides more interested in blaming the other than in solving the state’s problems.
Or they can do the job they were elected to do, and work in the best interests of all of us, for a change. Here’s my suggestion.
Back in the 1970s, Governor Milliken used to convene regular weekly meetings of what he called the “quadrant,” the majority and minority leaders in the House and Senate. They would get together and discuss how best to solve state problems.
Governor Jennifer Granholm should try that. She is in a position to serve as an honest broker. She can’t run again. These are desperate times, and saving the state needs to take top priority. Senate Majority Leader Mike Bishop worked hard at being obstructionist two years ago, and his popularity fell like a rock.
He might want to try giving a statesmanship a whirl. Our leaders are going to have to work together to prevent important institutions in this state from being damaged beyond repair.
Right now seems a good time to start.
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