To fix the state, Granholm must be ‘relevant’

LANSING– As Gov. Jennifer Granholm huddles with advisers putting the finishing touches on her final State of the State speech on Wednesday, political observers say she has a tightrope walker’s job to do with voters, an opposition Senate and an economy in the pits.

And while activists believe the term limited governor must grab the reigns and call for structural tax reforms which include revenue increases, that is apparently not going to happen during the speech.

“I am not expecting the governor to lay out any type of tax proposal,” says Granholm spokeswoman Liz Boyd.

Doug Pratt, spokesman for the Michigan Education Association, says the looming budget crisis is going to require four broad areas of fix. First, he says, the state has to start auditing government contracts — which equal $16 billion a year in expenses and currently are not audited. Secondly, the state has to close tax loopholes and monitor tax break incentives to make sure they are delivering on the jobs promised. Thirdly, Pratt says, the state has to revamp its current sales tax and expand it to include services. And finally, the state has to pass a graduated income tax, which will result in a tax cut to 90 percent of Michigan residents, he said.

“For the leadership to ignore those necessary changes and situations is irresponsible,” Pratt says.

But despite having seen state revenues continue to go down year after year and despite having already cut more than $6 billion out of the budget in just the last few years, state Republicans continue to insist that the state’s budget problems should be dealt with through cuts only, not new revenues.

“What I need to hear from the governor [Wednesday] is it is time to start reforms and restructure in the state of Michigan. We can no longer fix all of our problems simply by raising taxes,” says Rick Jones, a Republican state representative from Grand Ledge. “If she came out and said, ‘we tried tax increases and it didn’t work. Now, it’s time to restructure state government to what the people can afford,’ if she says that, Republicans will stand up and say, ‘I support her. I will work with her and fight for the passage.’ I don’t think she’ll say that.”

Granholm, however, has shifted slightly in the budget issues facing the state. On Friday, she touted that her administration had pared more state government than any previous administration, and called for further structural reforms. Jones praised that speech, but Pratt called it a plan to “shove government workers out the door.”

And Pratt says the cuts-only mantra is not working with the public. He points to a poll that found “70 percent plus” of voters want a “balanced solution.” Pratt says that balance is a combination of reformation and cuts and revenue enhancements.

“But they are appeasing the about 20 percent who want cuts only,” Pratt says of the legislature and the apparent shift in Granholm budget focus. “That’s not a good equation.”

The question, though, is even if Granholm does shift to a call for targeted tax increases, does she have the political clout to get it done? She has just under 11 months left in her final term and faces an intransigent Senate controlled by Republicans who have so far refused to pass any bill that includes a boost in revenue.

One East Lansing political consultant, who spoke to us on condition of anonymity because the business relies on Democrats to stay afloat, said Granholm is already a lame-duck.

“She was a lame duck before it became obvious,” the consultant said. “Is somebody in the legislature afraid of her?”

The consultant says no.

“I would say irrelevant is pretty close, but not exactly right. She’s along for the ride,” the consultant says. “It doesn’t matter if she has a plan. It just doesn’t matter what the plan is, because her plan is not going to be imposed on the state.”

Jerry Roe, a Republican activist from Eaton County and a government instructor at Lansing Community College, says Granholm doesn’t have the relationships with the legislature to get anything passed.

“I don’t think she knows where Dillon is. I don’t think she has much of a rapport,” Roe says.

Kelly Rossman McKinney, who is a principal in the Lansing-based public relations firm Rossman Associates, says Granholm’s Friday speech was a good start to laying out a serious plan for reform. But, she says, people attending the speech were “grumbling” as they left.

“It’s almost seven years late and a dollar short,” Rossman says she heard people say of the plans.

She said the plan had “potential,” but where it goes and how it gets there is going to depend on Sen. Majority Leader Mike Bishop, a Republican from Rochester, and Democratic Speaker of the House Andy Dillon from Redford Township.

“This is where Granholm can push her leadership,” says Rossman. “Can she? I don’t know.”

One major hurdle Granholm will face in getting her plans taken seriuosly this year, Rossman says, is the shift in political focus from the people already seated in leadership to the governor’s race.

“She is increasingly irrelevant in that discussion, certainly,” she said of Granholm and the race to replace her. To be relevant, Rossman says, Granholm has to focus on the policy issues. “She’s not in a position to be an elder statesman. It will be challenging for her to really prove that she is taking the reins and has had the reins all along.”

Boyd says her boss cannot be seen as irrelevant.

“This is not a lame duck year. It cannot be,” she says. “There is too much work to be done.”