Jack Lessenberry Essays and Interviews

Essay: Our Credit - 4/23/07

When you think of Standard and Poor’s, or Moody’s or Fitch‘s. what comes to mind? I think of men of the age of J.P. Morgan. Substantial men in three-piece suits, in walnut-paneled offices. Accountants wearing green eyeshades, examining balance sheets.

I think of sober, conservative financial people, whose idea of a political hero might be William Howard Taft. Okay, so my sartorial daydream may be a little dated, and their patron saint today is probably Alan Greenspan. But I am pretty sure that the men and women of today’s credit-rating agencies are not wild-eyed socialists.

They are likely to be generally conservative in outlook and cautious about spending schemes. That‘s why I found the reasons for Standard and Poor’s most recent downgrade of Michigan fascinating.

Michigan’s credit rating was lowered last August after the legislature abolished the Single Business tax without offering anything to put in its place. The Republicans did that, in a complex way that prevented Gov. Jennifer Granholm from vetoing their move.

The problem was not that they got rid of the unpopular tax, which sometimes seems to punish businesses for hiring more workers. The problem was that they did it without offering a replacement for the revenue the state will lose next year.

The governor thought that was irresponsible -- and so did the credit rating agencies. They downgraded our creditworthiness eight months ago, with the clear implication that it would come back up when we got our house in order. You’d think that would be a signal that even a term-limited politician could understand.

Well, evidently not in Michigan. The legislature is still dithering, and seems nowhere near passing a replacement tax. Meanwhile, the general situation has gotten steadily worse.

The deficit for this fiscal year is out of control -- and that’s with money from the Single Business Tax still coming in.

The tax doesn’t expire until New Year’s Eve. Standard and Poor’s is now telling its clients that Michigan is the only state with a negative credit outlook. And S&P is telling state officials that they  need to get Michigan’s house in order in the next few weeks, or face a further downgrading of our credit.

It’s up to us. Jim Wiemken, the managing director of Standard and &Poor’s who is in charge of Michigan, puts it this way: “Michigan’s credit outlook could be revised to stable if the legislature passes a reform package and addresses the remainder of the structural imbalance in the 2008 budget,“ he said a month ago.

And he added, “This is probably the most important legislative session in a decade.”  What that means is that it is time for our political leaders to act like grownups. The budget has to be balanced.

Essential services have to be maintained. We have to set up a stable and sensible way to get the revenue the state needs to function, a way not based on smoke, mirrors and gimmicks. p> Okay, Lansing; you heard the man. Now just do it.    

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Interview: Jim Weimken - 4/23/07

When it comes to getting a credit rating, states are very much like people. Pay your bills on time, live responsibly and it becomes easier to borrow money at a better rate. Make bad choices, and your options get narrower and more costly.  Jim Weimken is the primary financial analyst for the state of Michigan at Standard and Poors.  Michigan Radio’s Jack Lessenberry spoke with him.

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Essay: Public Schools - 4/19/07

Here’s the question we’re all trying to avoid. Do we want public schools, or not? Do we want to be able to tell people that they can move to Michigan, and put their children in our schools?

Put them in, that is, with a reasonable expectation they can get a decent education. An education that will enable them to go on to a university or a vocational program that will lead to a meaningful career? Michigan doesn’t have that now. Or rather, we have it in some places and not others, and the number of communities that offer really first-class education are shrinking.

We’ve managed, in my opinion, to create the worst of all possible worlds. We’ve largely taken local control away, but without providing enough state support to make sure every child gets a quality education.

Prior to 1994, education was a local affair. Bloomfield Hills voters could tax themselves enough to provide public schools that were better than many private academies. But there were other districts so poor they sometimes lacked adequate resources even to stay open all year.

Kalkaska was the poster child for these schools. So we then enacted something called Proposal A, which shifted responsibility for most public school funding to the state.

That was very good for the poorest districts, at least for awhile. But with the new state money came new restrictions. Districts were strictly limited in how much extra money they could raise via millages. Didn’t matter if local voters were happy to tax themselves for better schools; they weren’t allowed to. In some places, parents and students began drifting away to private schools or the new quasi-public charter schools, which varied widely in quality.

And as a lot of school systems are suddenly finding out, you are in real trouble if most of your funding comes from the state—and suddenly, Big Daddy runs out of dough. That’s what’s happening now.

I do not know a single Detroit politician, from Kwame Kilpatrick to John Conyers, who puts their children in the city schools. But most parents don’t have the money to send their kids to private schools.

As long as a city doesn’t have decent public schools, families, white, black brown or polka-dot, aren’t going to move there. As long as Michigan doesn’t provide acceptable public education for all its citizens, we aren’t going to be competitive, period. We need most of all to invest in our future. The state needs to guarantee that every school district has the resources necessary to provide the education students need to be successful.

If the voters of Holland want to tax themselves further and add an even better art program to their schools, that should be fine.

But Michigan needs to make sure that a poor kid in Benton Harbor who is bright enough can learn enough to get admitted to a good university. If we find a way to do that, we will be all right. p>

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Interview: Thomas Svitkovich - 4/19/07

It’s been a tough year financially for many Michigan school districts – and may be about to get a lot tougher. If there isn’t an agreement on closing the state’s budget deficit by May 1, the State Budget Director says he will order school funds cut by as much as $125 per pupil for the rest of this year. Thomas Svitkovich is superintendent of the Genesee Intermediate School district, which services twenty-one school systems. Michigan Radio’s Jack Lessenberry spoke with him.

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Essay: Getting Real - 4/18/07

Mark Murray put it this way when asked what he thought about Michigan. “Our future is directly tied to our ability to develop, attract, and retain concentrations of skilled people.”

That quotation was highlighted by the governor’s emergency advisory panel in their excellent report, “Michigan’s Defining Moment.” Murray knows something about defining moments.

And he knows a whole lot about budgets. Murray, now the president of Meijer Inc. was formerly the head of Grand Valley State University, and has been both budget director and state treasurer.

I was reminded of what he said when I got an e-mail yesterday from a young woman who is exactly the kind of person Michigan needs if we are to have any future.

Kindra is in her early 30s. She earned a bachelor’s degree in surveying from Michigan Tech, then went off to Montana for five years. But then she said “Eventually I was drawn back to my home state of Michigan, the state I love. I missed vast lakes, canopy-covered roads, rain, lush landscapes and fall colors.” Not to mention, she adds, cultural diversity and entertainment.

Four years ago, she moved back “confident that with my education, skills and work experience I would have no problem finding a job in the engineering field.” But instead, “it turned out to be a painful transition.” Eventually, Kindra did find a job -- in state government. But as the budget crisis drags on, she says “now I am wondering when my paychecks will start bouncing. It’s so depressing to know I am living in a state that is going downhill.”

“I just can’t help but wonder what it would be like to live in an economically prosperous state in the prime of my life,” she says.

And she adds, “Do our leaders realize that they are driving young professionals like me away by creating such a dismal place to live, or if they aren’t creating it, they certainly aren’t doing much about it? I don’t want to sound elitist because I come from a blue-collar family, but Michigan is headed for a brain-drain.”

She closes by saying that she doesn’t understand politics, or the nuances of Michigan’s budget problems, but adds “it doesn’t take a genius to figure out we need tax reform, not cuts. We need a place people want to work, live and do business, we need excellent and accessible higher education by the best universities, and we need some new and accessible business plans.“

I quote Kindra at length here, because she put what’s at stake better than I could. What’s really sad is that she gets it in a way that almost none of the people we’ve elected to higher office do.

We’ve had months of Republicans squawking mindlessly that taxes are bad, and Democrats talking about giving every kid an I-pod, and giving big utilities monopoly status in return for a payoff.

Kindra, and all the rest of us, deserve better than this.

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Interview: Don Gilmer - 4/18/07

More than two months ago, the governor’s emergency financial panel presented their unanimous report. It stressed the need for urgent, immediate action to solve the financial crisis threatening to cripple the state. But nothing has happened since then. Kalamazoo County Administrator Don Gilmer who is a Republican, was a member of the panel. Michigan Radio’s Jack Lessenberry spoke with him.

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Essay: Back to the Future - 4/17/07

Here’s a story that may sound familiar. Michigan was in a financial mess that had been building for years.

It was clear that the state needed either to raise taxes or to severely cut services, but no one in state government was willing to do either, and both parties engaged in creative accounting to hide a growing problem. Then one day, the major budget crisis everyone had warned about for years arrived, big time.

The governor was a Democrat. Democrats narrowly controlled the state house of representatives. But Republicans had a solid majority in the state senate, and they were not willing to compromise.

“The future of Michigan is at stake. There is no room for recrimination and no excuse for partisanship in the situation we face,” the governor said. The senators had other ideas. They refused to consider the governor’s proposal, and said they would only agree to spending cuts. They were so obstructionist that at one point, even the Republican Detroit News turned on them.

Michigan, the newspaper said, was becoming the laughingstock of the country, and “the dubious honor for this publicity goes entirely to the Republican majority in the state senate.”

But Republicans did not care. They wouldn’t budge. Finally, in April, the crisis resulted in payless paydays for many state employees --including state legislators and members of the state supreme court.

Michigan did, indeed, become a national laughingstock. Yet while the editorial writers blamed the Republicans, the national media focused on the newly re-elected governor.

Eventually, in late August, a compromise was scraped together, and the state became solvent again. But the governor paid a terrible price. His hopes of running for president the next year were destroyed. Indeed, he never was elected to anything other than a judicial position for the rest of his life. I said he, because we aren’t talking about Jennifer Granholm in the spring of 2007.

This was the story of Governor G. Mennen “Soapy” Williams in 1959, when our current governor was one year old. As bad as the situation was then, Soapy actually had a couple advantages Jennifer does not. Michigan was still a growing state then, gaining population relative to the rest of the nation, and more prosperous than most.

And everyone knew the economic downturn that had produced the 1958-59 recession was temporary. That auto sales would come back, and when they did, money would pour into Detroit.

That’s not the case anymore. But Jennifer Granholm, the same age now as Soapy was then, has an advantage too. She can’t run for president. She’s not a native-born citizen. Nor is there anything else she can run for. There’s no need for political posturing.

She’s also much smoother and shrewder than the man in the green bow tie. Shrewd enough, hopefully, to look at what happened in that long-ago year, and realize that when the state hits the rocks, no matter who is really at fault, the captain always gets the blame.

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Interview: Lou Glazer - 4/17/07

Lou Glazer has devoted himself to Michigan’s Future. That’s actually the name of his non-partisan organization. Michigan Radio’s Jack Lessenberry spoke with him about how the state’s current budget crisis impacts the state’s future prospects.

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Essay: Leadership Failure - 4/16/07

Let’s just step back, take a deep breath and consider the following.  Our state government is in the worst financial mess that almost anyone can remember. This isn’t just about politicians.

It has major implications for all of us. For our schools, for our colleges and universities, for our medical care, and for our state’s  future.  We are heading towards some kind of catastrophe.

The only question now seems to be how large the disaster will be and how long the pain will last.  And yet, there seems to be far too little sense of urgency among our elected leaders, even though we hire them to prevent such messes and fix them when they happen.

There seems to be far too little leadership, period, especially perhaps on the part of the governor of this state. 

And there seems to be far too little sense of responsibility to inform us properly on the part of the state’s media.

Let’s look at Jennifer Granholm.  Nobody asked her to be governor. She campaigned long and hard for the job.

Last year, she was re-elected by a landslide. She promised leadership.  Well, where is it? The vast majority of us do not understand the crisis, or how or why the state is in such a hole. Nor do we have much idea what will happen if we don’t fix it.

Nor do we understand why a tax increase might be better for them than further cuts.  Granholm does understand all those things.  She is a superb communicator. Even her enemies say she is one of the best in politics. So why hasn’t she used her skills to communicate the reality of the situation to Michigan?

Why doesn’t she ask for, or buy, half an hour of television time and do her best to make us understand the situation? She has a responsibility to do that. She has a political obligation to try to persuade us to follow her lead. That might indeed be hard.

But that’s what leaders do. Getting people to do the easy thing is never difficult. Getting them to make sacrifices is leadership.

Instead, the governor has State Budget Director Bob Emerson do her dirty work. It was he who had to propose the two penny sales tax on services that went nowhere.

Late last week he announced that if the budget standoff isn‘t resolved by May 1, the schools will lose $90 to $125 a pupil for the rest of this year.  That would guarantee that many schools will close in financial near-chaos. Mark Deldin, superintendent in Chippewa Valley, put it best. “The tragedy continues,“ he told the Macomb Daily. “School boards are left to deal with the legislators’ inability to lead.”

Yet this new crisis was almost entirely eclipsed in our largest newspapers by the released confession of the man whose wife was chopped up. We’ve got something bigger than a budget crisis going on.  And when I think of our democracy and our future, I get scared.   

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Interview: Chris Christoff - 4/16/07

Michigan’s ongoing state financial crisis was highlighted late last week when the budget director announced that if there is no solution soon, school payments would be drastically cut on May 1st. But is there any movement in the legislature?  Chris Christoff is Lansing bureau chief of the Detroit Free Press. Michigan Radio’s Jack Lessenberry spoke with him.

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