The Real State of the State

Governor’s Final State of the State Address Includes Eight Proposed Government Expansions, Three Limitations
Mackinac Center
Michael D. LaFaive
Fiscal Policy Director

MIDLAND — Gov. Jennifer Granholm’s 2010 State of the State address included eight proposed expansions of government and three limitations, according to Mackinac Center Fiscal Policy Director Michael D. LaFaive, who has tallied and categorized annual State of the State addresses dating back to 1969.

“This speech demonstrated the obtuse nature of the political class,” said LaFaive. “Michiganders watched seemingly serious adults leap to their feet to applaud symbolism, ghost jobs and free-trade bogeymen when evidence suggests they have nothing to cheer. Any observer of the last few State of the State speeches would know that this was the same old song and ‘dance with government’ routine.”

The last third of the governor’s address was a summary of economic development deals, many of which involved the Michigan Economic Growth Authority, the state’s premiere tax incentive program. The Mackinac Center has twice proven empirically that MEGA has failed to create jobs in net terms and has shown it may actually destroy them.

“This speech offered little hope to Michigan’s unemployed,” said Michael Jahr, senior director of communications. “It’s remarkable that the governor would claim ‘2009 made clear that the way forward for Michigan is precisely the path we have been forging’ when you consider the massive job losses, precipitous decline in personal income, outbound migration, bankruptcies and foreclosures.”

Proposed 2010 Expansions

1. First, we must invest in Pure Michigan tourism advertising.
2. The federal government will give us $2 billion over the next four years if we can come up with a 20 percent match in state funds… You can continue to ignore this problem, or you can follow the bipartisan transportation funding task force recommendations on how to fix it.
3. Tonight, I am announcing that my budget for the year ahead will restore the Michigan Promise Scholarship.
4. And I’ll urge the federal government to help fund Project Phoenix — our effort to help abandoned auto factories rise from the ashes as new centers of economic activity and job-creation.
5. We'll continue to seek more funding to connect every region of the state — urban and rural — to high-speed internet service.
6. Tonight, I will also ask you to create more opportunities for entrepreneurs by creating a new tax credit for investors who make venture capital available to the Michigan businesses that need it to expand and create new jobs.
7. And this year we’re going to take “No Worker Left Behind” to the next level by opening ten learning labs in Detroit to give new opportunity to workers who need basic education skills in order to succeed in college or technical training.
8. In the year ahead, we are going to focus our economic development efforts on the wind-energy industry to give Michigan the competitive advantage that is today helping us to create jobs in vehicle batteries and solar energy.

Limitations

1. One of those reforms contains incentives to encourage retirement for 46,000 state and public school employees. On average, we’ll replace only two of every three state employees who retire …
2. … and the new hires will come in under a health care benefit plan that will cost 21 percent less.
3. Allowing lifetime health care benefits for lawmakers would only confirm our citizens’ worst fears about government — that it is comprised of those who put themselves first and the public last. I ask you to complete the job.

“In fairness to the governor, her boldest and best proposals were actually detailed last week and included reining in the outrageous cost of government employee compensation,” said LaFaive.