Executive director’s message

2007 Is a Pivotal Year for Michigan and its Hometowns

“In the middle of every difficulty lies opportunity” – Albert Einstein

By Daniel P. Gilmartin

For communities throughout Michigan, in terms of opportunity, we could not have planned a more perfect storm.

Consider the rarity of Michigan’s state of affairs –
• With a heavy hand and captive audience, Governor Granholm continues her push for reinvesting in Michigan;

• Many members of the 94th legislature are energized and eager to drive a significant and positive transformation;

• Tax restructuring is on the table for the first time in over a decade; and

• Local leaders know better than ever how to squeeze an opportunity for everything it’s worth.

Had all these circumstances occurred individually, we would face a far less favorable position for leading change. Instead, Michigan has an opportunity and a real fighting chance to be all the things we want it to be.

Let’s look at some of the facts that are motivating the Governor and others to challenge the status quo that tax cuts, as opposed to thoughtful investment in our state, are the state’s best shot at reversing its downward trend.

• The state’s budget woes are due to tax cuts, not the economy. In 2000 state expenditures were at the Headlee constitutional limit of 9.49% of the state’s personal income. Today we are $4.6 billion below that limit, and the state is spending only 7.9%.

• Michigan has cut its general fund budget by 40% over the last six years. It’s 41% smaller than in 1989 and 47% smaller than in 1978. This is despite a steady increase in population.

• A study by the House Republican caucus last year found that Michigan’s state and local taxes – business and individual combined – are below the national average.

Despite the supposed tax “relief” of the last decade it is hard to find anyone who is not employed by the Mackinac Center that actually feels better off. And when you study the effects of a reduced emphasis in important areas like health care and higher education you can get downright depressed about the prospects for the future. That’s why leadership and action is needed now more than any time in recent memory.

Those of us in local government know too well that the state has chosen to “hide” its self-created fiscal anguish by slashing critical funding to communities.

The consequence of balancing their budget on the backs of local services is taking its toll. The state has slashed funds that support local police, fire protection, transportation and other services to the tune of $2 billion. The impact of these cuts has been far-reaching and many are taking notice that communities cannot sustain another round without an increase in desperately needed revenue. Today our message of investing in hometowns and preserving quality of life shouldn’t sound so off-key to a group of lawmakers scrambling to find answers to the state’s economic challenges.

And it isn’t everyday we get to explore new and better ways to fund core services, debate the revenue sharing formula and, consequently, review what local government’s relationship with the state should be.

With good fortune, and plenty of MML advocacy, lawmakers will look at tax restructuring as an opportunity to review the facts as they are and heed our message of investing in infrastructure, economic development tools and essential local government services as the driving force that will lead the state out of its current economic woes. And the fact that local communities have been the frontline on these issues for a long time, not just now, should speak volumes.

So, as we work our way through this rare and exciting state of affairs, remember there could not be a more perfect time to push for real and meaningful change.

The League, along with its member communities will continue to push for sweeping change. When the dust finally settles, local communities will be in a better position to thrive: vibrant with people, business and culture, and possessing the tools and policies necessary to make Michigan the place to be in the 21st century.

Daniel P. Gilmartin, executive director, Michigan Municipal League, 734-699-6302, 800-653-2483 or dpg@mml.org.