THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
20th December, 2007 0
In terms of politics it seemed that the top story during the year of 2007 was at times also a state story.
Citizens had Lansing on their minds, exploring the size of government and the size of the taxes that they felt they should, or should not, have to pay.
More than a few residents focused on Michigan's books at least as closely as they may have followed their local governments and school boards.
Sharp divisions led to a momentary state shutdown when the fiscal year started in October, and almost again at the start of November.
Nobody involved expressed perfect satisfaction with the end result. Lansing legislators and Governor Jennifer Granholm were not legally allowed to run a deficit, unlike their peers in D.C. with the $9 trillion federal debt. They resolved a $1.8 billion shortfall - pennies in comparison to the national mess - with a blend of about 75 percent tax increases and 25 percent spending cuts.
Highlights (or lowlights, depending on your view):
* The income tax now is 4.35 percent, up from 3.9 percent. Republicans said lawmakers could have done more to hold this in line, possibly through Frankenmuth Rep. Ken Horn's proposal to cut each department by 2 cents on a dollar. Democrats argued that the action was more a "restoration" than an "increase" because the rate was as high as 4.6
percent during John Engler's tenure before Granholm took office.
* A controversial 6 percent sales tax on services eventually was rescinded. Granholm had started by listing more than 100 services, but Democrats whittled the count to 23 in response to lobbying pressures. For example, many mom and pop shops would have been hit, while golf courses and Detroit's pro sports franchises would have been exempt. The compromise alternative was a 22 percent hike in the new Michigan Business Tax, which replaces the Single Business Tax.
* On the cutback side, $400,000 in 'savings' was achieved mostly by slowing the rate of increase in such line items as schools and prisons, although Prosecutor's throughout the state are alarmed at Granholm's proposal for the early release of thousands of felons, most of them drug offenders convicted under Michigan's Draconian '651-Lifer Law'
Some mainstream media sources equally blamed all the legislators for 'bickering rather than airing the valid views on all sides. Review Magazine, in turn, gave readers in-depth information from sources that ranged from the conservative Mackinaw Center to the liberal Michigan League for Human Services.
* City Charter Reform Defeated
Meanwhile, the Saginaw story that will most affect our lives was August's voter rejection of the Saginaw City Charter Commission's plan to overhaul City Hall.
Charter Commissioners offered reforms that would have included an elected executive mayor, a grassroots district ward system for election of City Council members, an ombudsman to pursue wasteful spending, and many other features. Virtually the city's entire political establishment was against the proposal, asserting that the existing 61-year-old blueprint for government will require only minor tweaking.
After citizens followed the establishment's advice with an emphatic 'No' vote, the Charter Commissioners elected in 2004 had completed their work.
Mayor Carol Cottrell, before she stepped down in November, handpicked a new advisory panel of nine appointees, all of whom had opposed the ballot proposal.
Soon after, two of the original charter commission members and opponents of the revised Charter that were subsequently appointed by Cottrell to the advisory committee - Joyce Seals and Larry Coulouris - were named by the newly elected council as Mayor and Mayor Pro-Tem. Ironically, the voters’ decision to stick with a council-appointed mayor almost led to a crisis after the November election. Two council members backed Seals, two supported Bill Federspiel and two were for Greg Branch in a series of repeat ballots. Only a switch by newcomer Paul Virciglio, who moved from Branch to Seals, prevented an impasse that otherwise may have continued to this day.
* City Manager Darnell Earley commissioned a public safety study by the International City/County Management Association, known as ICMA. Among the findings was that police response time to top priority violent crimes averaged as many as 12 minutes, and that a typical 24-hour shift for a firefighter included less than one hour fighting fires. Police Chief Gerald Cliff soon reported that internal changes had reduced the major response time to less than 5 minutes. Earley said he will continue to explore new ways for firefighters to perform more work on down time, but he ruled out the extensive police-fire merger that also was part of the Charter Commission's reform plan.
* The approximate cost of one management position for two retirement cycles in Saginaw City Government: $13,690,846.17 - this equals the total cost of one position for 58 years. Government pension reform anyone?
* The city continued its new policy of boosting the budget by charging outlying areas that need more water, which started with a deal with Thomas Township and Hemlock Semiconductor Corp. Tittabawassee, Carrollton, Birch Run and Saginaw townships
signed less dramatic deals. Major holdouts include the Frankenmuth area and Kochville Township. Water policy receives little publicity, but it is considered the Number One key to regional development and job creation.
* Council members quietly extended a Charter
Communications cable franchise agreement that produces more than $400,000 in annual revenue. A small corps of public access users on Channel 16 had expressed concern that Charter Communications has not provided technical support, and has required them to transport their self-produced tapes (mostly of church activities) to a Bay City office. Nonprofit groups continue to make virtually no use of the free-of-cost public access option to promote their programs and their fund-raisers.
* As the year came to a close, council members were pursuing an ordinance seeking to regulate scrap metal exchange enterprises. Authorities have reported a sharp rise in vandals stripping aluminum and copper from properties.
* Housing demolitions continued to increase.
Michigan State Housing Development Authority funds, raised from bonds rather than taxes, continued to replace long-lost federal funds. The reported count of 130 razings was more than triple the pace of just a few years ago.
* One story into which Review Magazine did not delve was the trial of Wilmer Jones Ham McZee, who was mayor and then mayor pro-tem, on felony charges of torching her 1986 Mercedes and filing a false insurance claim. A jury found her not guilty on the first charge, which involved no eyewitnesses, and guilty on the second charge. Attorney James Piazza says she is innocent and plans to file an appeal.
Review Magazine perceived that the media circus, especially on local television, was a distraction from the more important news that has been outlined in this annual summation, but has received only scant TV attention.
* Birthday for Saginaw County. The City of Saginaw is far from alone in facing local budget shortfalls. Saginaw County is among other local units, which also is looking at cutbacks, including a possible sharp reduction in sheriff's road patrols. City voters had passed a major public safety tax in 2006, but countywide residents had not followed suit.
* To take a break from the bleak outlook, the entire county celebrated the City of Saginaw's 150th birthday and at least some residents learned how to spell and pronounce 'Sesquicentennial'. Featured activities in August included a history-themed parade, concerts at the courthouse and Ojibway Island, fireworks, and a display of 19th Century base ball.
* One bright spot for the entire county was continued private support for youth recreation. Heroes for Kids, initiated by local football standouts Clifton Ryan (Arthur Hill, Michigan State) and LaMarr Woodley (Saginaw High, U-M) completed a third successful year of fund-raising, and volunteers came up with a countywide recreation plan. Meanwhile, a city plan that could affect the entire region would create a lower-cost 'spray park' at the site of the abandoned Andersen Water Park's wave pool and slides.
* Hardship Never Ends. The State of Michigan continued to rank No. 51 in the United States (even Washington D.C. is better) with an official unemployment rate of 7.9 percent. This figure does not include tens of thousands who have given up on pursuing work, or have relied on incomes that may range from the kindness of friends to street-level crime. However, the vast majority of those in poverty are the so-called working poor whose pay is so low that they remain below federal guidelines, for example $20,000 for a family of four.
* One upshot of the hardship, based on low wages and/or predatory lending, is a local surge in home mortgage foreclosures that is even more severe than the national crisis. Review Magazine reported that Saginaw County had 1,037 foreclosures during the past year, twice as many as last year and five times the count during the middle 1990s. Local groups are pushing for action to at least ease the distress, although the outlook for hundreds of families is admittedly close to hopeless.
* Another family budget pinch comes from the prospect of steep utility bills and potential shutoffs. Consumers Energy provides natural gas for costs lower than heating oil or propane, but still the price has risen 50 percent in five years. Customers may represent themselves to prevent shutoffs during the winter, but in the spring they then will face the prospect of catching up.
Saginaw County Legal Services revealed that since the start of January 2006 $29,488 in excess billings through 'estimated' usage by Consumers had occurred in Saginaw County alone.
* Ongoing Battle Over Our Watershed. Continuing on in 2006, as it has for decades, was the issue of dioxin contamination by Dow Chemical and the reticence of elected leaders to take action. By the end of the year an EPA memo noted a complaint filed by Dr. Priscilla Denny seeking whistle blower protection from Dow. Meanwhile, the Saginaw News implied the state DEQ was reviewing sampling data based on this EPA memo, when in fact Dr. Denny, which the EPA memo did not address, was simply bringing the flawed sampling data into question.
Highlights of the EPA memo document what has been known for years: Dow's penchant for closed doors, confidentiality, leveraging politicians, resisting any other entities science on dioxin, and insisting on studies not needed to carry out legal obligations. Since 2004, EPA has leveled numerous formal written complaints about Dow's lack of compliance with the company's obligations.
* Part-Time Legislature & Voter Tax Repeal Petitions. As the year wound to a close, two separate but compatible petition initiatives surfaced, with petitioning planned to start around January 12th, 2008.
The Part-Time Legislature initiative would cut the salaries of Lansing Legislators in half, dock pay for absenteeism, limit personal expenses, and prohibit pensions and lifetime medical benefits. The legislature would set salaries, but this would be done only in a dedicated session right before elections to create a downward pressure.
Session would go from March through June, with limited special sessions. Budget work must be submitted at the beginning of the session.
The Voter Tax Repeal is an automatic referendum on tax laws, which also applies to the 2007 Michigan Business Tax, income tax, and any other recent tax. It requires all tax acts be subject to voter repeal at the next general statewide election, except the first special tax referendum will be May 2009. With taxes regularly being renewed and amended, special tax referendums will become a regular fixture in statewide elections, and focus campaign issues on taxes.
No crisis of under funding would be caused because unlike regular referendums, which suspend the law until the election, the tax law subject to special tax referendum can take effect until the election.
After a tax is repealed at election, the legislature is legally free to replace the revenue, but will be politicall y constrained by campaign promises and the need to get a 2/3 vote immediate effect.
The result will be an emphasis on responsible cost controls.
What for more on this in future issues of The Review. Organizers have a goal of 450,000 signatures by July 2008. Both petitions are available for review at www.parttimelegislature.com
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THE NEW GILDED AGE (Part 2)