|Stephen Henderson: Snyder Must Sell How a 2nd Term Would Overcome Shortcomings of His 1st|
September 24, 2013/Detroit Free Press
By Stephen Henderson
For three straight months, Michigan’s unemployment rate has gone higher, even as the national rate drops and many other states — including some in our region — have seen more significant job growth.
That’s not an economic blip. It’s a verdict on Gov. Rick Snyder’s first term.
Is Michigan doing better now than it was when Snyder took office? Unquestionably, by many measures.
But Snyder’s agenda — massive business tax cuts, slashing regulation and breaking the unions’ political backs — isn’t getting an awful lot of people back to work in Michigan. Even worse, his hits to K-12 and higher education undermine long-term economic growth, while his plans to fix the state’s crumbling infrastructure have stalled.
It’s time to start discussing whether an economic agenda that has been focused on tax rates and regulation, but short on talent building and reinvestment, is enough for Michigan.
Snyder ran promising a broader approach, but hasn’t been able to implement it. As he winds up for a spirited re-election bid, he needs to be accounting for the first term’s shortcomings, and explaining why another four years might yield better results.
The state’s unemployment rate hit 9% in August, effectively wiping out all of 2013’s job gains. There are as many jobless people in Michigan now as there were last November.
That’s still an improvement over January 2011, when Snyder took office after nearly a decade of awful economic results. But it’s an understatement to say the expectations were higher.
This is more than a year-and-a-half into businesses enjoying the $1-billion tax break they got when Snyder and the Legislature killed the complicated Michigan Business Tax in favor of a flat corporate tax. Where’s all the hiring they were supposed to do?
It’s after the governor’s Office of Regulatory Reinvention has changed or repealed 1,512 business rules. Shouldn’t the lift of those burdens be cranking up hiring?
And it’s after Snyder signed right-to-work legislation that he and the Legislature said would bring employers flocking to Michigan. The flock turned out to be a gaggle.
Truth is, if you subtract the boost in employment that owes to the auto companies’ rebound, which Snyder had nothing to do with, the governor can’t claim credit for much job growth at all over his first four years. In a Free Press oped last month, local policy guru Lou Glazer, who leads the Michigan Future think tank in Ann Arbor, noted that Snyder is on track to create fewer jobs in his first term than Democrat James Blanchard did 30 years ago, during one of Michigan’s worst economic stretches.
I think it’s about approach. Businesses care as much about states that create and maintain strong talent pools as they do about tax rate. They care about infrastructure and investment as much as they worry about regulation.
Other states are proving this. Minnesota, for instance, is on a roll. It added 12,000 jobs in August, and has now regained all the jobs it lost after the recession started in 2008. Minnesota raised taxes on high earners and corporations and is considered a high-tax state by organizations, such as the anti-levy Tax Foundation, but also is a top 10 state when it comes to percentage of residents with college degrees, and it spends more on K-12 and higher education than Michigan does.
Minnesota is also focusing the growth of those college grads in its big metro areas. Have you seen Snyder or the Legislature work on policy that will grow college attainment or attraction in Detroit?
If taxes were so key, Minnesota should be tanking, while Michigan, which has been praised for tax and regulation reform since Snyder took office, would be soaring.
Maybe Michigan’s approach to education — not just cuts, but letting districts go broke and watching the kids scatter — doesn’t suggest the state is a great long-term investment. Maybe the stick-and-carrot approach to making higher education “more efficient,” which has really meant a continuation of disinvestment, says this isn’t a place that’s likely to compete with other states in creating or attracting college grads.
And maybe the fight over fixing our pockmarked roads, with legislators describing investment solely as increased cost, says this is a place that’s about the short term, not the long game.
We’ve also done some stone dumb things to kill demand, which is the only real driver of business hiring. Snyder and the GOP-led Legislature gutted the Earned Income Tax Credit to save $40 million, but failed to see how taking that money out of the local economy (low-income people spend money when they have it) might sap some of the hiring they believed tax rates would inspire.
Overall, Lansing’s approach has not been smart, or well-rounded.
During his campaign, Snyder sold a more robust approach to economic growth than he has been able to effect during his first three years in office. Some of that is about recalcitrant forces in the Legislature; some of it is just about his own lack of steady leadership on issues that don’t have to do with taxes or regulation.
Last weekend during the Republican Leadership Conference on Mackinac, Snyder offered a peek at his upcoming re-election campaign, which will cast him as “one successful nerd,” a play on the “one tough nerd” slogan of 2010.
I think he’s premature in taking victory laps, especially with the unemployment rate creeping back up.
He needs to make the case, again, for a sensible approach to growth — and tell us why we should believe that next time, he’ll actually deliver.
Stephen Henderson is editorial page editor for the Free Press and the host of “American Black Journal,” which airs at 1 p.m. Sundays on Detroit Public Television. Follow Henderson on Twitter@ShendersonFreep, or contact him at 313-222-6659 or email@example.com.