Michigan

Today's Jackson Citizen Patriot includes an editorial on Governor Jennifer Granholm's upcoming second term and her belief in the "Next Michigan." Regarding economic policy, the editorial suggests that

the economic recovery has simply failed to materialize for Michigan. Things continue to worsen as the state loses manufacturing jobs and the Michigan-rooted auto industry struggles to remain competitive. And this year begins with a new Legislature. Democrats have control of the House and a stronger minority position in the Senate.

Therefore the governor has more serious budget issues than she had in the first term, but she is in a stronger position now in terms of her political support in the Legislature.

The burden of leadership in that scenario is great. To propose a general tax increase, as some advocate, runs counter to the typical economic-development incentive of offering tax breaks. Legislators see a tax increase as a re-election death notice. To advocate deep budget cuts is likely to produce howls of protest from throughout the state -- especially by school districts that have seen their state aid eroded by huge legacy costs, inflation and past cuts in state aid.

It is hard to look beyond such severe budget problems to see the governor's "Next Michigan." We're pleased she has the gift of farsightedness. She will also need a strong hand with lawmakers, frequent use of her bully pulpit and the ability to persuade and inspire the people of Michigan in the long-term drive to economic renewal.

Indeed, raising taxes is not only unwise for re-election purposes but also for actual and sustainable economic growth in Michigan. The main problem in Michigan, however, as illustrated by this editorial, is that the whole state seems to think the only way out is "the typical economic-development incentive of offering tax breaks." In effect, policymakers there realize that high taxes drives business away but fail to comprehend the burden of engaging in the bureaucratic mess that comes with applying for tax breaks.