Fundamentals are important.  While every 4th grader wants to learn how to run the fancy “Statue of Liberty” play in Pop Warner football, it’s the blocking and tackling that wins games.  Same thing for Coach Dale’s “four-passes-before-you-shoot” rule in Hoosiers.

When it comes to the economy, the fundamentals include fiscal discipline to encourage investor confidence; establishing a fair, competitive and predictable business environment; and making targeted investments in human capital – especially in education – to create the globally competitive workforce necessary to compete in today’s knowledge economy.  These aren’t the sexy, headline-grabbing announcements that politicians love; rather, they represent the nuts-and-bolts, behind-the-scenes hard work necessary to spur long-term economic growth and create jobs now.

The importance of fiscal discipline from government as a necessary precondition for overall economic growth cannot be overstated.  As Gene Sperling, a former National Economic Advisor, notes, “fiscal discipline creates confidence that helps maintain sustainable growth that in turn leads to more income, more revenue, and lower deficits – the so-called virtuous cycle.”  The increased investor confidence in a state’s credit worthiness that results from fiscal discipline also lowers the cost for the state to borrow money, which allows the state to do more with tax dollars when making important public investments.  On the flip side, fiscal recklessness and budget gimmicks have the reverse effect, a lesson we in Michigan learned all too well just two years ago.  As I have noted on multiple occasions, the Republicans who controlled the State House in 2006 chose the day after the August primary to vote to eliminate the Single Business Tax.  Here’s the problem: with no indication of how they would bridge the $1.9 billion hole in the state budget that move created (either through specific cuts or a specific proposal to replace the lost revenue), ratings analysts at both Fitch’s and Standard and Poor’s downgraded Michigan’s credit rating the very next day.  This increased the cost of public investments and made Michigan less attractive to private investors as well.  As State Representative, I will consistently oppose proposals that would put partisan advantage over the fiscal discipline we need from state government to turn our economy around.

To create a fair, competitive and predictable business environment, we need to strike a positive balance between taxes, regulations and long-term investments that will make Michigan an attractive place to do business in a global economy.  There is no doubt that business taxes are a central element of a competitive mix, and the recent Small Business Barometer from the Small Business Association of Michigan showing just 9% of Michigan small business owners feel that the level of business taxes is appropriate shows we have a lot of room for improvement in this area.  In addition to competitive business tax rates, business owners need predictability in what their tax will be (an issue I will deal with in more detail in a couple weeks).  Uncertainty kills business; the only thing worse than having a high tax bill is not knowing what your bill will be.  In addition, we need to review our regulatory framework to find the least burdensome alternative to businesses in protecting the people and places of Michigan.  We all can name regulations that don’t make sense, and simply continuing with some of these because it’s the way it’s always been done just isn’t good enough anymore.  I will work to streamline regulations while promoting health and safety to allow businesses to thrive.

Finally, we need to invest in Michigan’s people to ensure we have the globally competitive workforce necessary to compete.  These public sector investments are just as important to Michigan’s long-term economic prospects as creating a positive environment for private investment.  As former Secretary of Labor Robert Reich points out, “public investments in education, health care, transportation, and the environment are complements to private investments.  Businesses can’t be highly productive unless their employees are highly productive.”  Number One on this list is education, from pre-school to college.  Furthermore, it is the business community that is making the case for increased spending on education.  In a speech to the Michigan Chamber of Commerce last year, Knight Kiplinger, the editor-in-chief of the Kiplinger Letter, said that the state must “Invest heavily” in education to compete.  Others have called for increased investment in early childhood eduction, including Gene Sperling, the former National Economic Advisor mentioned above, whose book The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity includes a chapter titled “Take Universal Preschool Seriously, Please.”.   We also need to do much more to invest in higher education as called for by the Lt. Governor’s Commission on Higher Education and Economic Growth in 2004.  Unfortunately, Michigan continues to lag in this area, putting our economic competitiveness at risk.  A recent report from the Grapevine Project shows that Michigan ranks dead last – 50th out of 50 – in terms of state tax appropriations for higher education.  As State Representative, I will work to boost Michigan’s competitiveness through increased investment in higher education.  With an educated and skilled workforce a necessary condition of entry into the global knowledge economy, we need to recognize investment in education at all levels as a fundamental part of spurring economic growth in Michigan.

This follows on the heals of a report by the University Research Corridor – made up of the University of Michigan, Michigan State University and Wayne State – that shows that the activities of the URC created 68,203 Michigan jobs with a net economic impact of $12.8 billion in 2006. According to a review of the report, in addition to the economic impact, the URC also educates more students than any of the other research corridors studied, including Silicon Valley, the North Carolina Research Triangle, and the university communities in Boston, Chicago and Los Angeles. In touting the report, UofM president Mary Sue Coleman saw “limitless potential for the future,” and Wayne State president Irvin D. Reid noted that “When state budgets are tight, it makes sense to invest our limited dollars where they will produce the greatest return. No part of the budget produces a greater return on investment than education, and Michigan’s research universities have a unique role in fueling the state’s economic growth.”

All of this is a refreshing change from the budget stalemate coming out of Lansing. What’s needed is a vision for Michigan – a question that all of us need to answer of “What state do I want to live in?” “What kind of state do I want to pass on to my children?” – and then to develop a roadmap of how we implement this vision. We’re going to continue to stall as long as our elected leaders on both sides confine the debate to up-or-down votes on cuts or tax increases. Only when we broaden the debate to build a vision for Michigan’s future that we can all embrace are we going to be able to find a way out of the on-going budget mess, a path not just to a resolution, but a path forward. I think the insights of Knight Kiplinger and the University Research Corridor study show that step one on this path is a focus on education. It’s time to get Michigan moving again.

While I’ve been under the impression that the Governor and State House leadership want to invest in Michigan, and Mike Bishop and the Senate Republicans want to cut Michigan down, I now see I’ve been mistaken.

Both parties want investment. We just define it differently:

“‘If we invest this money into education for Michigan’s children, we are investing in Michigan’s economic future,’ said Sen. Alan Sanborn, R-Richmond.”

What’s this investment of which Senator Sanborn speaks, you ask? It’s the $15 million cut to education Republicans approved yesterday.

See, over in bizarro world, cuts = investment. George Orwell would be proud.

(cross posted at MichiganLiberal.com) 

Today, PRI’s program The World program featured a story on American philanthropist Greg Carr, who’s spending $40 million to promote eco-tourism in Mozambique’s Gorongosa National Park. In explaining how he’s been able to convince locals in this part of southern Africa, one of the poorest regions on earth, not to take the unsustainable and destructive approach of poaching and clear-cutting to feed their families, Carr tells the story of a young man who had learned English in order to be a paid guide for Americans and Europeans visiting the park. Carr explains that that young man’s goal now is to learn enough languages so that he can guide any European who visits the park, and that as a result, the young man will earn as much as 20 times as much as his father, who runs a small slash-and-burn subsistence farm. Carr uses this as an example of developing a skill and making it in “a knowledge industry.”

Also today, one of my favorite journalists, Jack Lessenberry, argued that Michigan’s choice is to “Fund education – or die.” Lessenberry writes that “our only hope, really, is to attract new high-tech, new-economy jobs.” How do we do that? Again Lessenberry has an answer: “We need to do everything we can to get more of our students in colleges and universities and high-tech vocational programs, or they will have no future.” In addition, “as important as higher education is, it means nothing if we don’t have decent lower education for everyone — kindergarten through high school.”

My only criticism of Lessenberry’s argument is that schooling should start even earlier – that a first step is to make a real commitment to early childhood education in Michigan. Tomorrow, by the way, the Michigan Early Childhood Investment Corporation is sponsoring a presentation by Rob Grunewald, an Associate Economist for the Federal Bank of Minneapolis, who will tell legislators and others that according to a recent report, the state gets $17 in benefits for every $1 it invests in quality preschool. One quote from Grunewald especially stood out: “In these times of budget shortfall it’s important to protect what investments are currently in place in those areas because ultimately investments in early education to pay back in the long run.”

It seems, however, that not everyone in Lansing is listening to this economist. Down in Lansing today, Republican Senate Majority Leader Mike Bishop and his GOP colleagues pushed through a series of devastating cuts after Bishop’s phony budget deal went nowhere. Included among the cuts are $25,500 to Early Childhood Education. What was that about investing in our future? Paging Federal Bank of Minneapolis Economist Rob Grunewald to the Senate chamber…

Senate Republicans also slashed nearly $18 million from Michigan’s community colleges, including $128,900 from West Shore Community College in Scottville and $534,100 from Northwestern Michigan College in Traverse City; $83,300 for screenings and treatment services for newborns (Welcome to Michigan!); $333,300 from Family, Maternal, and Children’s Health Services for their childhood lead program; $666,700 from the pregnancy prevention program (but don’t go looking to these “Pro-Life” legislators if you do find yourself with an unwanted pregnancy); $55,600 from a nutrition program for the elderly; over $97 million from higher education (nevermind, Jack Lessenberry, nevermind); $3.5 million of state aid to libraries; over half-a-million from the Department of Natural Resources; and over $90 million in revenue sharing to local governments. And don’t forget: Senate Republicans today voted to cut $15 million from the School Aid Fund, while robbing $300 million (subscription required) from the 21st Century Jobs Fund. (You can read through all the cuts here and here.)

So how do these things fit together, these three disparate strands all reported on the same day. It’s simple. If we don’t invest in Michigan, who will? That $25,500 cut in early childhood programs will end up costing Michigan over $433,000 in the long run. Robbing $300 million from the 21st Century Jobs Fund to cover the short-sighted irresponsibility of the Senate Republicans makes it that much harder for Michigan to get back on her feet. And the cuts to higher education, community colleges and the school aid fund – totaling $130 million! – makes Michigan’s turnaround that much more difficult, and that much further away.

That 16 year old young man in Mozambique understands something that Mike Bishop and his Republican colleagues do not and probably never will: that education and skills are the only true path to future prosperity. We can’t cut our way to a brighter future. We need to invest in it.

More than that, she deserves a legislature that will work with her on the priorities facing Michigan. It is well past time for our leaders to rise above petty partisanship and find ways of working together to address the key challenges we face.

Please join me tomorrow afternoon in welcoming Governor Granholm to Leelanau County and the 101st District. Here are the details:

Here are five good reasons why our governor deserves four more years:

1. She has been a leader in the fight to make Michigan a leader in alternative fuels and renewable energy. She has signed legislation to provide gas tax rebates on ethanol and biodiesel-based fuels, provided incentives to service stations that carry these fuels, and approved the creation of agricultural renaissance zones to jumpstart additional alternative fuel production.

2. She has invested $200 million in Michigan-based technology companies through the Venture Michigan Fund, a public-private partnership to spur growth in this exciting market sector.

3. She fought for, passed, and signed record investment in education in Michigan. Specifically, she applied essential pressure during the legislative process to protect and expand funding for early childhood education.

4. She has taken the lead in managing this difficult economic transition, something that should have been done 25 years ago and for which both parties deserve their share of blame. No transition of this sort is easy, but it’s something we’ve delayed for too long. She has promoted new investment through a $2 billion Jobs Today, Jobs Tomorrow economic plan that builds on Michigan’s strengths in manufacturing, tourism, and agriculture in ways that will allow our state to be competitive in the long-term.

5. She is still the only person active in the debate over replacing the Single Business Tax who has put a plan on the table. Her responsible course of action stands in stark contrast to the reckless behavior of the legislature, which through its actions added additional uncertainty to Michigan employers and led Wall Street to downgrade Michigan’s credit.

Those are five great reasons to support our governor. Join me tomorrow afternoon with her on the campaign trail to learn many more!

If we’re going to turn our state around, it’s crucial that we have local-based representatives that are willing to stand up to the Lansing special interests who have done so much to put us in our present economic situation. Working together, however, we can overcome these challenges. This plan is a start on the road to recovery:

1. Make Northwest Michigan a global center for renewable energy production and innovation.

2. Create a Michigan Tourism Investment Corporation, a public-private partnership focused on results, not partisan politics.

3. Connect local businesses to the global economy through an expanded broadband infrastructure.

4. Utilize our local strengths to differentiate local renaissance zones from others in the state. Creating a virtual port authority in Manistee is one example.

5. Foster a statewide entrepreneurial culture by providing incentives for workers whose jobs have been outsourced to create and replace the job they’ve lost

6. Promote Michigan Small Business. The Small Business Barometer shows just 14% of Michigan small business owners give the legislature a positive score.

7. Provide a predictable and competitive business tax environment. In replacing the Single Business Tax, we should be guided by the following four criteria: (1) stable revenue source, providing certainty and predictability; (2) minimize compliance costs; (3) competitive with other states’ business tax rates; and (4) encourage innovation, promote jobs creation, and reduce the penalties for adding jobs that exist in the current system.

8. Invest in education to build the best-educated workforce in the world.

By taking these shared local priorities to Lansing, I hope to help build a competitive business environment that enables Michigan entrepreneurs to create a 21st-century Michigan economy that is brighter than anything we’ve seen thus far. Will you join me?

I have worked hard to put forward a positive vision for the Michigan we can build together:

- Building on our strengths to bring good-paying, year-round jobs, creating a statewide entrepreneurial culture, investing in technology and renewable energy, and doing much, much more to promote the year-round opportunities for visitors to enjoy in our four counties.

- Providing greater educational investment to local schools, from universal pre-school to an affordable college degree, and ensuring our schools are funded as well as any in the state.

- Reclaiming our legacy as the most conservation-minded state in the country. From stopping Canadian and out-of-state trash to plugging the Nestle loophole that allows for diversion of Great Lakes water to providing more state resources for local-based recycling programs, we can do much more to live up to the legacy we inherited from Governor Milliken.

Together, we’ve done the work to put us in a position to win. Now we have just 25 days to finish the job.

How you can help:

* Talk to as many family members, friends, neighbors, and co-workers as you can, sharing your passion on our issues and letting them know the choice in this election.

* Go door-to-door in your neighborhood, helping with voter canvassing and leaflet drops to get our positive message out to the voters of Mason, Manistee, Benzie, and Leelanau counties.

* Volunteer in your local county Democratic headquarters or here in the Northport Campaign HQ (231-386-7000).

Finally, if you can, please click the “Donate” link on the left of the page and contribute on-line. Every single dollar helps us to get our message out and make sure we have the resources down the stretch to win!

25 days to victory!

While we have many issues that we will highlight over the course of the campaign, these are the seven issues the campaign launched during the press conferences:

• Create and protect jobs;
• Invest in schools and education;
• Make health care more affordable;
• Promote alternative fuels and invest in renewable energy;
• Protect Michigan’s land, water and way of life;
• Strengthen consumer protections; and
• Enact legislative reforms.

More details on all these themes will be laid out in the coming weeks.

This is simply unfair. To compete in the 21st Century, we need to ensure that every Michigan child receives a world-class education, whether they attend school in Bloomfield Hills or Benzie County. It’s gotten to the point that the Oakland County Press, whose schools get more supplemental funding than any other county in the state, is writing editorials on the unfairness of this discrimination.

Fortunately, things are starting to change. A new organization called Citizens For Equity has started to turn a spotlight on the issue, and local voices are starting to be heard in the news media (check out Glen Lake School Board member Jeff Smith’s excellent OpEd in the Detroit Free Press).

The case for local schools could not be any clearer, and we need to ensure that every single Northern Michigan representative is standing up for equity in educational funding. While public school finance issues are notoriously complex, the fairness issues in this case couldn’t be simpler. And for our local office holders, the choice is just as clear: you either represent the people of Northwest Michigan or you represent the Lansing status quo. Our children deserve better. We can’t afford less.

So, as the State House heads off for Spring Break, here’s a little homework…

1. If fixing the SBT is such an urgent matter (and I agree that it is), why put it off until next year? Instead, why not sit down, hammer out a solution, and phase it out right away?

2. For that matter, if it’s so urgent that we need to cut nearly $2 billion from the state’s general fund – the same fund needed to pay for schools, prisons and our state’s safety net – why did you not even consider the governor’s proposal to revamp the SBT when she proposed it last year?

3. If this is really about reforming the SBT – and not about partisan posturing – why didn’t you even consider the compromise put forward by Governor Granholm this week?

4. If the primary rationale behind eliminating Michigan’s Single Business Tax was to cut down on the SBT’s uncertainty, why did you add to the uncertainty by not even telling Michigan businesses and consumers what the new tax system would look like?

5. [Multiple choice] What are you going to do to replace the $1.9 billion you are taking away from the general fund? Are you going to:

a. Raise personal income taxes by $800 per family
b. Cut spending on essential programs – like prisons, higher education, the State Police, and community health and human services – by an average of 21.4%
c. A combination of both (but please don’t ask us the details before November’s election)

Right now, the Republican members of the State House fail this test. And until that changes, they are also failing their constituents and a state that needs real reform far more than it needs more political stunts.