You’d think a Republican might think twice at state budget time about appearing to “spread the wealth around,” to borrow the time-honored phrase.
But this is an election year for Rick Snyder. And when the business cycle is working in an incumbent’s favor — as it clearly is in today’s Michigan, courtesy of a retooled auto sector, tighter financial management in Lansing and a generally improving macro-economy — well, you embrace the opportunity.
You boost spending on K-12 and higher education, as the governor proposed in his budget address Wednesday, much to the delight of the business and education lobbies. You offer to increase pension contributions for teachers to reduce unfunded liabilities and to offset the insatiable machine devouring growing portions of school budgets statewide.
You resist calls from your GOP caucus to turn a cash surplus into across-the-board tax cuts of debatable utility. Instead, you contribute to the Rainy Day Fund, and you tout tax cuts for people who couldn’t accurately be described as One Percenters or evil cogs in the gears of Big Business.
You, and your allies in business, position it all as responsible down-payments on a smarter, more competitive and more fiscally responsible future — a dollars and cents antidote to the image (and fact) of Michigan as a blue-collar, marginally educated union stronghold clinging to a past that disappeared a generation ago.
Bottom line: You do it because you can and, net-net, because it’s the right thing to do. Reverting to the old, broken ways of throwing taxpayer dollars into the education maw without conditions, or blindly backing tax cuts despite demonstrable infrastructure needs, amount to steps backward when momentum is driving in the opposite direction.
The confluence of a rising business cycle and the electoral calendar present Team Snyder, and purportedly the most apolitical Michigan governor in modern times, with the chance to blunt criticism from political rivals. It also demonstrates support for the critical economic drivers of education and a business-like approach to fiscal conservatism that resonates with the people who make investment and hiring decisions.
“This shows what his priorities are, priorities that will help the economy grow,” Doug Rothwell, CEO of Business Leaders for Michigan, said in an interview. “Some of this stuff will help him politically, but most of it will help the economy.”
In theory, anyway. Like him or not, Snyder’s first term and his bid for re-election are buoyed by a building recovery that was underway when he took office in January 2011. By then, the auto bailouts were accomplished fact, already matters of historic debate; Michigan’s “Lost Decade” was drawing to a close; and the Great Recession had squeezed public budgets and forced corporate restructuring.
Who reaps the benefit? In stark political terms, the guy in the governor’s office, for one. Just ask his predecessor, Jennifer Granholm, who bore the brunt of the collapse and compounded the predicament with weak leadership and managerial ineptitude.
Three-plus years into the Snyder era, Michigan stands at a crossroads: Its rejuvenated auto sector, best exemplified by profitable Detroit automakers, is changing the national conversation about manufacturing and what American still can build. Its financials and credit ratings are solid. Drivers in the growth of new jobs stretch beyond traditional auto gigs, encompassing high-tech, life sciences and an entrepreneurialism changing the business landscape in Detroit proper.
The largest municipal bankruptcy in American history is simultaneously confirming Detroit’s dysfunction and signaling that state and local leaders finally are moving to remedy a systemic problem that long ago proved it could not fix itself. The net results are growing optimism and re-investment in a city and its institutions, from the Detroit Institute of Arts and Cobo Center to downtown and Midtown.
Mix it all together and you get what a former president, George H.W. Bush, called “the Big Mo.” If nothing else, the past five years are persuasive evidence that the traditional building blocks of Michigan’s economy — assembly line jobs built on the tenuous foundation of high school diplomas with all of it expected to last a lifetime — are insufficient and uncompetitive.
The governor’s election-year budget says as much without actually saying so. Michigan’s momentum won’t be powered by the tired tropes of the left (push more taxpayer dollars through government bureaucracies and public-sector unions) or the right (more tax cuts and worry about the crumbling roads and bridges later).
A third way? Balance public obligation with private incentive, recognizing that competition among states is real and that ignoring it has consequences too much of Michigan has known too well already.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays.