A Stimulus Package in Washington Would Only Mask Problems In Michigan

A lot of mayors, county officials and governors are chomping at the bit to get their hands on money from President Obama’s proposed “stimulus” package. Without a doubt, Democratic Michigan Gov. Jennifer Granholm — whose budget has been in perpetual crisis during her entire seven-year tenure — is one of them.

But from one of Michigan’s rare pockets of unadulterated prosperity — and yes, such places do exist — comes a voice wishing that Obama’s check would get lost in the mail.

L. Brooks Patterson is the county executive of Oakland County, one of the nation’s five most affluent counties — although even there, the Republican Party has been losing its grip in recent years. Patterson gained prominence in the 1980s during his tenure as Oakland County prosecutor, becoming Michigan’s leading advocate of bringing back the death penalty. But he also became a leader on tax policy, attempting unsuccessfully to pass a ballot initiative that would have forced Michigan’s reluctant state officials to cut taxes and cap spending.

Obama’s stimulus presumes to offer fiscal relief to states like Michigan. Patterson sees it differently.

“The state has several problems, of course, and unfortunately, Obama’s stimulus package is going to paper over the structural deficit we have in Michigan,” Patterson said. “We have a very hostile tax policy in this state. We have severe budget issues. And they’ll get (the stimulus money) and put it into operations — as if it’s a windfall, as the governor sees it — and she will now say the problem with the budget is being managed. It’s not being managed.”

Why does Michigan face a perpetual budget crisis? Surely the struggles of the Big Three automakers and the state’s high unemployment rate are major factors, but Patterson doesn’t let Granholm off easily.

“She cannot budget,” Patterson said. “And if you can’t budget, you’re damned.”

For Patterson, budgeting is all about making accurate revenue projections — something Oakland County has learned to do so well it is now budgeting in two-year cycles, and will soon begin budgeting in three-year cycles. At the county level, that’s based on accurately projecting property values, because county revenues are largely based on property taxes. Oakland County has achieved balanced budgets, even budgeting so far in advance, because Patterson has insisted on having financial officers with first-rate credentials.

“There are six certified public finance officers in Michigan, and two are on my staff,” Patterson said. “We recruit good people — finance is probably my strongest team — and we teach other units of government how to do it.”

Patterson says he would be glad to sit down with state officials and show them how to do it, too. But that would require changes they have never appeared interested in making.

“They refuse to downsize state government and reduce the cost,” Patterson said. “They can do it any number of ways. They can do it by hiring freezes or attrition — or the word they don’t ever want to hear, which is privatization. Granholm just won’t take on any public employee union. We have a chronic deficit that is going to be around $1.6 billion, and when the Obama money gets here, she will just use it to avoid dealing with the problems.”

Of course, Michigan has long found it difficult to change its fundamental economic and governing structure — a problem whose roots never stretch far from its seemingly ubiquitous labor unions. Even during the 12-year governorship of Republican John Engler, who had a Republican legislature during the majority of his tenure, Michigan failed to enact right-to-work laws or eliminate its hated Single Business Tax, which has long been notorious for complicating the establishment and operation of entrepreneurial companies.

“Engler was pretty savvy,” Patterson said. “He didn’t have the public support for right-to-work, but he did put in Proposal A (a 1994 shift from property taxes to a higher sales tax), which dramatically changed the way we finance state government. There were some dramatic proposals. But John — he had both houses — we could have done so much more.”

Those opportunities having been missed, Michigan Republicans are now fighting just to hold their advantage in affluent Oakland County, where they have traditionally been dominant. The Republican advantage on the County Board of Commissioners is down to just 13-12. A Democrat is now the county prosecutor. Patterson says part of the blame goes to flight from the City of Detroit, with more Democratic voters moving into the inner-ring suburbs that are part of Oakland County. But he acknowledges that Republican missteps at the national level play a major role.

“Back in 2006, and to a certain extent 2008, was the worst,” Patterson said. “People were just down on George Bush and that was one way to get even. Obama was a direct beneficiary of people’s anger. But expectations are so high for Obama, I don’t think Superman could pull off some of the stuff he’ll have to pull off, and there will be a payback.”

Perhaps especially in Michigan, if Obama’s stimulus money only plunges state officials deeper into denial about their real structural problems — as this veteran player on the Michigan political scene expects will be the case.