Tax increase aftermath -- recall threats loom

Democrats and Republicans voted to increase the Michigan income tax and create a service tax component to the sales tax. There isn't a tax in the world that everyone likes. The services to be taxed are presumably non-essential activities, but somehow, greens fees didn't make the list -- a shameless nod to the clout of class in the legislature.

Anti-tax activists in Michigan are freshly emboldened -- they finally have something concrete to protest. And they are threatening recall actions against DINOs and RINOs and even Governor Granholm. But what they are really threatening is to punish legislators who had the guts to break ranks. The Republicans are getting ready to eat their own. Being a proud card-carrying member of the GOP means never breaking ranks, never choosing to acknowledge that still small voice within (unless it's coming from an ear piece at a press conference or during a debate).

The new taxes are not perfect and reasonable small business persons have concerns about administering and collecting the new monies. They also question why some services, but not other obvious choices must bear the new burden. These are legitimate questions that citizens and legislators need to discuss.

But this isn't the debate we're hearing from those hoping to make hay at the moment. Instead of constructive criticism or dialog, opponents offer shrill, combative, politicized rhetoric -- the fuel of negative campaigning.

Here are some articles to check out on the current situation:
Protax votes may carry a high cost Detroit News
Group may fight new state tax on services Crain's
Lawmaker's benefits, pay still could become issue MLive

Not a time for celebration, says Gov. Granholm

cross-posted yesterday at Michigan Messenger

This afternoon a subdued Governor Granholm held a press conference on today's budget agreement.

Looking exhausted and speaking soberly, Granholm called the compromise a comprehensive plan to prevent massive cuts to education, public safety and health care. She thanked the legislators who reached agreement on a package of cuts, reforms and revenues.

Granholm called it a historic agreement for Michigan that will "set the state on solid fiscal footing and allow us to move forward and invest and build the next Michigan." She expressed confidence that "this fiscal plan will allow us to do the things that we know are important to rebuilding a state that has been so challenged by the global shift in manufacturing jobs and policies that got us here in the first place."

She said this was not a time for celebration. There are massive cuts -- about $440 million -- that will be made in the next 30 days. "These are going to be tough. And we know whenever somebody is cut, they don't like it. These cuts will be difficult, but they must be done," she said.

She said the combination of cuts, reforms and revenues will be difficult, but that it is a balanced approach to resolving the structural deficit in the long term.

She stressed that the increase to the income tax is temporary and "will start to roll back in 2011." She said her preference would have been for economic indicators rather than a date to trigger future reconsideration of the income tax. The tax returns Michigan's income tax rate to its 1999 level.

The new income tax rate will make Michigan's rate the fourth lowest in the country.

"The combination of the income tax and service tax means about $1 per person per week," she said.

The new revenues, she said, will make it possible to maintain current funding levels for education, public safety, Medicaid, health care, which was a major goal of the budget negotiation.

She was not specific about the nature of the reforms or cuts, except that they will affect corrections and bring public employee benefit plans in line with private sector norms.

"The solution we crafted enables us to put the state on stable, solid financial footing once and for all. We are not going to solve this budget deficit with one-time fixes," she assured her audience.

Speaking about economic development she said, "I am not going to assess blame. I want to move forward in a bipartisan way with my partners in the legislature. But really with citizens and the businesses of Michigan to create a vibrant economy and take advantage of our natural niches." Among those she included "the area of alternative and renewable energy."

Acknowledging the difficulty of the votes that brought forth the compromise, she chided "extremists" taking up recall actions against legislators who voted their conscience. "I am very angry at those on the fringes who would attack legislators who voted their conscience to put Michigan on solid footing." She urged citizens to refuse to sign recall petitions.

Defending legislators who voted for the comprehensive changes she said, "These legislators came to Lansing to fix problems and many of them last night cast what would be the toughest votes in their lives." She said the purpose of the votes was to prevent massive cuts to education, public safety and health care.

"People need to pat them on the back and say 'thank you' for moving us forward."

She also attributed to term limits complications in the negotiation process.

Granholm Featured in WaPo OpEd Column Today

See E.J. Dionne Jr.--Who's for Big Government

His point is that even though the big government versus small government rhetoric abounds at the state level, conservatives are willing to support big government programs if their constituents will benefit.

"Could there be any more of a big-government endeavor than the invasion of Iraq, pursued by a president from the party of small government? Do the domestic spying programs have anything to do with a small-government agenda?"

Well, no.

And there is always the farm bill.

"In the meantime, the coalition against excessive government entanglement in the farm economy crisscrossed all ideological boundaries, running from Rep. Jeff Flake (R-Ariz.) to Sen. Richard Lugar (R-Ind.) to Rep. Ron Kind (D-Wis.).

Kind's amendment to reform the farm program attracted an admirable band of supporters, including some of the most liberal and most conservative members of the House. Yet it was overwhelmingly voted down because a slew of farm-state conservatives uncharacteristically joined the Democratic leadership in opposing it.

Rep. Robert Goodlatte (R-Va.) said Kind's proposal "rips out the safety net for American farmers and ranchers." At last: a safety net many conservatives love. Democratic leaders, for their part, opposed Kind because they wanted an electoral safety net for their vulnerable members from farming districts."

Interesting, common ground among the very liberal and the very conservative.

Finally, to Granholm. On the issue of government provided health care, Granholm says that business leaders recognize such programs give competitive advantage to manufacturers in other countries.

"Shrewd industrialists who love the free-enterprise system have noticed how 'countries that have big-government health care' are at a competitive advantage, Granholm said in a telephone interview, and 'they're asking government to help them out.'"

Granholm also speaks to changing sentencing guidelines, as a way to help with budget woes.

Sadly, our partisan bickering and posturing over the budget and taxes has attracted national attention.

"Posturing on taxes will probably continue until very close to Michigan's fall budget deadline. But because the trade-offs between taxes and spending are clear, politicians can't afford to be too rhetorical."

All eyes are on you, Michigan legislature.

Finally, Granholm advocates investing in people through education and healthcare for the sake of our economy.

"Granholm argues that the United States is 'never going to be the cheapest place to do business,' in part because of its high labor and environmental standards relative to many of the emerging economies. She suggests that improving the country's competitive position will require 'investing in education, higher education and health care.'"

Right, we have standards for goodness sake! Let's not abandon standards that support a clean environment or educated citizens or fairly compensated workers. Sure, ditching those costly policies and regulations has seduced vast numbers of manufacturers to move abroad. After all, shareholders want better returns on investment and nobody likes a bear market.

Making commitments to invest in people will require a longterm perspective--a stretch for those focused on quarterly profits or election cycles.

Between Jobs--Jackson Converts to a Cool City

Somewhere between our beefy manufacturing legacy and the New Economy -- between east Michigan and west Michigan -- sits the city of Jackson (pop. 36,316). If you look closely, you'll see signs of its transitional status--lots of houses for sale, lots of vacant commercial properties, a 'COOL CITY' neon sign in the Chamber of Commerce front window.

What makes Jackson a "Cool City?" It's the Armory Arts Project, an economic development effort transforming the historic 19th-century Jackson State Prison site into a live/work space for artists. It garnered the 'Cool City' designation from Governor Granholm in 2004 as part of the Cool City Pilot Program.

A generation of Jackson workers spent their lives with Goodyear Tire. From 1937 to1983, Goodyear operated a massive manufacturing facility on a 59 acre site. Colorado-based Kinder Morgan now operates a gas-powered, electric generating plant on the site. In the past year several more plants have closed, TRW and Eaton among them.

Redevelopment for economic development continues to be a focus of the Enterprise Group of Jackson, an alliance of several organizations devoted to keeping Jackson County economically viable. Jackson County has four tax-free "Renaissance Zones" and a long list of corporate/commercial properties available for development.

I spoke with Jane Robinson from the Enterprise Group about the Armory Arts Project,"We did an initial feasibility study in partnership with Art Space, a Minneapolis-based group that cultivates space for artists around the country,"Robinson said.

Robinson says the project is already having a positive impact on the downtown with new residential development and shops moving in. "Property values on the street with the Armory have risen 972%,"Robinson boasted.

"What makes this project unique in the country is our incredible historic site. There is a four-story high gallery, eight smaller galleries, workshops, a ceramics studio, and a large scale art production studio all available for the tenants at no extra cost,"Robinson said. "In future plans for the Armory, we will have a 'creative innovations center.' This will be a learning environment where manufacturing and artistic communities come together for collaboration." According to Robinson, business and marketing workshops will also be available to artist/residents.

Groundbreaking happened in November 2006 with a completion goal of January of 2008, which Robinson expects to meet. There are 62 units--some apartments, some lofts. "We kept the integrity of the buildings with the exposed brick walls and coved ceilings. 40 units are already reserved. We have attracted artists from around the country--Miami, Atlanta and Chicago, as well as from across Michigan,"Robinson shared.

This Saturday, June 16th, at 4p.m. there will be a tailgate reception and hard hat tour of the project. Robinson welcomes all creative people who might be interested to the Saturday event.

Great Arts State?

Yesterday, Governor Granholm released some arts funding that had been frozen since the shameful budget standoff in March. $3.6 million will be released. Sounds good and arts organizations are certainly grateful. But another $3.6 million will be cut from the $9.4 million fund for the arts. Arts groups are looking at a cut of about "36% overall."

The Free Press reports that,"State arts funding in Michigan has now fallen 73% from its peak of $24 million in 2000." It goes on to report," Since 2001, Michigan's national rank in per capita arts funding has dropped from 4th to 35th." 35th in per capita arts funding and this when our population is declining? Pretty damning.

How can this be happening? Michigan is home to: Interlochen Center for the Arts, founded in 1928 and the 2006 National Medal of Arts recipient; University of Michigan School of Music, Theatre and Dance; Blue Lake Fine Arts Camp, training youth for more than 40 years; the Detroit Institute of Arts (fifth largest fine arts museum in the U.S.); Ann Arbor Pioneer High School Music Department--the National Grammy Signature School for 2005-2006 and one of the top 7 in the country the previous two years; the Detroit Symphony Orchestra; the Ann Arbor Film Festival, oldest festival in North America that showcases independent and experimental film; MOCAD (Museum of Contemporary Art Detroit); Cranbrook, founded in 1904 and renowned for arts education; and the Sphinx Organization, bringing cultural diversity to classical music. And so many more extraordinary arts organizations.

Can the Great Lakes State become the Great Arts State? Not at this rate. Individuals and private funders continue to make up the difference as state funding declines. Ask any parent of a high schooler involved in arts (or sports for that matter). But there is a limit to those private resources.

The arts can thrive broadly only if they are understood as integral to the commons--a public good, which enriches all communities and citizens.

Do we need the arts to survive? No. The arts won't fill an empty belly. But we do need the arts to be fully human. The arts enliven hearts and minds and souls. We don't need to choose between food and joy. Work, art, human dignity--these are inseparable.

Granholm Receives National Award for Campaign to End Homelessness in Michigan

While debate rages and sides are chosen over the proposed 2% service tax, Governor Granholm has been recognized for efforts to end homelessness in Michigan. On March 8, United States Interagency Council on Homelessness (USICH) recognized Governor Jennifer M. Granholm with the "Every American Deserves A Home" award for her encouragement and leadership for Michigan's statewide Campaign to End Homelessness.

A January 2007 report by the National Alliance to End Homelessness reports that .26% of Michigan's population are homeless. That is 26,124 people.

If you want to get involved to help end homelessness in Michigan, consider connecting with one of these organizations.

Michigan Coalition Against Homelessness
Shelter Association of Washtenaw County
Greater Lansing Homeless Resolution Network
SOS Community Services (Ypsilanti)
The Goodwill Inn (Traverse City)
Detroit Rescue Mission
The SIREN/Eaton Shelter (Charlotte)

Prisons, People, Problems

1911 postcard from the Michigan State Prison in Jackson -- Message handwritten front and back: "This is where I'm taking my meals--but don't you tell I told you. Here today--but gone tomorrow--so cheer up. Took the wrong car and landed here. Tell Tim 'hello' for me. This is the card I got in Jackson."

Last week, 60 Minutes broadcast a piece about a mentally-ill Jackson inmate who lost his life to dehydration and hypothermia after 17 hours in restraints. (South Bend Tribune, Report on Mentally Ill in US Prisons)

This week, Governor Granholm proposed a balanced budget plan that includes the release of certain prisoners to reduce expenditures. (Granholm takes heat for plan to release prisoners, Lansing State Journal ) Her plan would release 3400 "low-risk" inmates. These include elderly, non-violent inmates, medically unfit inmates, and inmates likely to be deported. Legislators would also be asked to change sentencing guidelines for offenders committing nonviolent crimes to reduce the inmate population of embezzlers, thieves, and drug users from 40% to 20%. And the idea is receiving predictable responses from many sides. The Senate Majority Leader has dismissed the proposal as "fiscally irresponsible." A prisoner advocate is pleased with the proposal. Lobbyists for privatizing see another lucrative option. As usual, there is no easy answer here, but there is room for a bi-partisan collaboration on behalf of the future of Michigan. All that's needed is some vision and thinking beyond the usual partisan scripts. And perhaps, a prayer.