Michigan's Upcoming Financial Crunch - Tax the People or Cut Benefits?

The Detroit News reported September 11 that lawmakers were wrestling with a 1.7 to 1.8 billion dollar deficit in Michigan's budget. The awesome ferocity of a deficit figure that large in a state this small is mind boggling to say the least. Each party is now blaming the other. The solutions that are being explored include cutting services (Republicans) and/or raising taxes (Democrats). In the meantime, it appears from news reports that "compromise" and "working together" are ideals not likely to be attained soon. If an answer isn't formulated promptly, the state could find itself shuttering its doors and curtailing many services on October 1.

Liberal bloggers are predicting a countdown to chaos, while conservatives are looking for leadership in Lansing and finding the capital city strangely quiet.

According to CNN Money.com, Michigan has the dubious distinction of leading the nation in its unemployment rate. Layoffs at the Big Three have been escalating over the years, and the recent notice of VW moving from metro Detroit hasn't helped the situation. In the meantime, other businesses have been feeling the effects of the recession through trickle down. The Michigan foreclosure rate is one of the highest in the nation, in some counties sporting an increase of over 40% from last year. Many believe the spike is due to a rash of predatory lenders who handed out beefy and easy-to-get home loans during the brief economic surge of the late 1990s.

Is it any wonder that Michigan's college graduates are leaving the state in record numbers? Who would stay here? Our best and brightest are no doubt going to where the money is.

Perhaps lawmakers should take a page out of a real person's real life. I'm not a legislator or an economist, but as a one-half of a household unit, when money is tight, I cut down on my expenses. Our family doesn't travel as much as we used to, we don't eat steak every day, I don't spend as indiscriminately as I did in the past, and the list goes on and on. However, it appears life is different if you're state worker or in state government. Look, we're sending people to a Hawaiian conference on the public dime.

On the business side, our company is suffering as a result of the downturn in the economy. Can you say you made "26% less than the same period last year" without sobbing? I can, but just barely. We make do by hiring less, spending less, and cutting our prices so that people can comfortably afford to pay for our service. This means less of a return on our investment, but that's the price we pay for staying here.

Politicians need not point fingers at each other, or maybe they should. The first place this state can look to cut some fat is in its own house. The population of Michigan supports 38 Senators and 110 state Representatives. Contrast that to California, a state with over three times as many people. That state can manage to do business with only 40 state Senators and 80 assembly members. My county, Oakland County, only has a million or so residents but fourteen representatives. I might be alone, but I'm thinking we can do without a few of them. Not only would that free up money in salaries but the savings in resulting expenses, such as state provided vehicles, health insurance and retirement would add up.

While I'm at it, does the First Gentleman really need to be on the payroll, with three paid assistants who failed to get elected last time around?

State offices, schools and other government agencies need to be run efficiently, and they can be, with just a little attention. Since I regularly deal with more than a few state offices, I can attest that the redundant paperwork this bureaucracy has been known to invent is a testament to the job security of some pencil pusher in a Lansing cubbyhole.

Privatization of state services is very high in the consciousness of some. Some are pooh-poohing the notion with the belief that it will cost more. In many cases, privatization works, and works well. Prior to our company taking over driver education for a very well known school district in Southeastern Michigan, that district was putting 600 students through their program at approximately $900,000 a year, or $1,500 a child. We provided the same services and did a better job for $290 a child. We have to. We can't charge $1,500 and stay in business for very long.

This state is asking its people to make sacrifices, and I am not above making sacrifices for the betterment of the common good. I've been sacrificing for the last three years. Now it's time to see our state legislators and government put their money where their mouths are and do the same.

If you're in financial trouble, tighten your belt like the rest of us.