2007-01-18 / Columns

Michigan Politics

Granholm's 'Emergency Panel' Cover for Tax Hike
By George Weeks

On the same day last week, President George W. Bush and Governor Jennifer Granholm stepped on escalators they hoped would lead to solution of their greatest problems. Outcomes will shape legacies of these lame duck chief executives.

Just hours before Bush's Wednesday night announcement of a rapid surge in troops for Iraq, Granholm announced a fast-track effort that could lead to a surge in Michigan taxes. Liberals criticized Bush, as conservatives did Granholm.

Granholm's appointment of a hastily assembled Emergency Financial Advisory Panel, chaired by former Governors Bill Milliken and Jim Blanchard and given a mere three weeks to come up with a remedy, was widely and understandably viewed by political observers and the media as a cover for a tax increase proposal.

Strikes me that Granholm muffed unveiling of this effort.

Why call it an "emergency" panel when 1) in fact it is going to deal with a problem that has long been looming (she undoubtedly was hesitant to form it during her re-election campaign), and 2) the panel most likely will not recommend specific "revenue enhancements," i.e., taxes/fees, but rather issue an urgent call for long-needed structural changes.

Granholm's office calls the 12-member panel of Democrats (including ex-Attorney General Frank Kelley), other left-leaning folks, and moderate Republicans (including ex-U.S. Representative and state Senator Joe Schwarz of Battle Creek and ex-Senate Majority Leader Dan DeGrow of Port Huron) "a diverse group with diverse opinions."

That's a stretch. There's no balance of the political spectrum. Nary a conservative voice.

Ex-Senate Majority Leader Ken Sikkema (R-Wyoming) told The Detroit News the panel would have more credibility if it included conservatives who favor streamlining government. But he said, "In their heart of hearts, there are plenty of Republican lawmakers who know we can't cut our way out of this huge budget problem."

Interestingly, Sikkema, who just left the Legislature because of term limits, is now a policy analyst for Lansing-based Public Sector Consultants Inc., a think tank run by former Milliken hands who are among those providing the staffing for Granholm's panel.

Milliken and Blanchard both grappled with budget woes and raised taxes. Blanchard, before the panel had its first closed-door meeting Friday in Lansing and received grim news from administrative and outside economists, insisted, "It's premature" to say a tax increase will be the outcome. "Everything is on the table."

Milliken declined comment, but before joining the panel had said Michigan "can't cut our way out of this mess" - a projected budget deficit of more than $1 billion for this year and 2008 (about $3 billion if you include how to replace lost revenue from elimination of the Single Business Tax).

He's right. Cuts alone won't cut it.

David Littmann, senior economist at the Midland-based Mackinac Center for Public Policy, said; "I don't see these people who got us into the problem getting us out. They only know tax and spend."

Democrat Blanchard inherited a deficit from Republican Milliken; Republican John Engler inherited one from Blanchard; Democrat Granholm inherited one from Engler.

As the panel heard Friday, the Michigan picture is dire. It will take more than three weeks of "emergency" deliberations to chart yet another rebound and the restructuring that has long eluded us.

But, if the panel serves to highlight some of Michigan's lingering problems, such as having a far greater increase in per capita cost of the corrections system than any other Great Lakes state, maybe the three weeks on a fast track will be well spent.

Northern Congressmen

With Democrats taking control of the U.S. House, Representative Bart Stupak (D-Menominee) last week was elected Chairman of the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations, one of the more powerful subcommittees on Capitol Hill. He vows to "aggressively ferret out the truth."

Representative Pete Hoekstra (R-Holland) lost chairmanship of the House Intelligence Committee but is its ranking Republican, and the third ranking Republican on the House Committee on Education and Labor. He vows to "advocate for American workers and promote an educational system that is determined by the communities in which they are located."

Representative Dave Camp (R-Midland), the third most senior GOP member of the House Ways and Means Committee, was selected as the ranking Republican on its Health Subcommittee. He vows to promote "affordability and access to quality health care."

All three of the Up North congressmen voted last week against House-passed (253-174) legislation to lift curbs on embryonic stem-cell research funds.

George Weeks retired last year after 22 years as political columnist for The Detroit News. His weekly Michigan Politics column is syndicated by Superior Features.

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