When an enterprise spends upwards of $50 billion a year and comes out in the black to the tune of less than $1 billion, it does not make new plans to spend gobs of additional money, nor does it eliminate all sorts of methods for generating revenue. It looks at its modest positive bottom line and says, ďAt least we didnít lose any money, but this is nothing to go crazy over.Ē
Well, thatís what it does when itís run by smart people. When an enterprise is run by politicians, thatís an entirely different proposition.
So it should come as no surprise that news of Michiganís projected $971 million budget surplus for 2015 has both Republicans and Democrats in Lansing brimming with ideas about how to use the tiny one-time windfall to radically change Michigan forever in their own ideological images.
Republicans want a permanent reduction in tax rates, or at least a one-time tax rebate. Or both.
Democrats want more spending on education, or the repeal of the 2011 tax code change that ends the exemption of pension income from the state income tax. Or both.
State Budget Director John Nixon tells both parties not so fast! Most of the surplus is one-time money that canít be confidently expected on an ongoing basis, and even the portion one could theoretically consider structural and repeatable is impossible to count on in the future because so much of state revenue depends on economic conditions that can vary wildly from one year to the next.
Anyone who reads this column knows that I am more inclined toward Republican economic polices than their Democratic counterparts. But the argument for these policies is quite apart from any one yearís budget outcome.
If you want to argue that taxes should be cut or eliminated, then argue the merits of these positions as superior policies on an ongoing basis. If you want to argue that we should go back to not taxing pensions, or that we should spend more on education, or that we should spend more on lots of other things, then argue these things as good ideas independent of the circumstances of the moment.
But itís ridiculous to make any structural change in state economic policy because in one given year you project a surplus that represents less than 2 percent of the overall budget.
If youíll recall, when Rick Snyder first became governor he brought on Nixon to lead the process of developing several yearsí budgets in advance.
This serves as a marked contrast to the perpetual annual budget crises we experienced when Jennifer Granholm was governor, and the news of this surplus is evidence that the policies and processes we have right now are producing good results.
Granted, itís easier to plan and execute balanced budgets when you donít have to negotiate with the opposition party because your guys control the Legislature.
But itís also easier when you know how to budget, which Snyder and Nixon do, and Granholm did not.
Dan Calabrese writes for The Politics Blog. To read more of his work, visit blogs.detroitnews.com/politics.