He has been called many things: “The Candidate Who Came from Nowhere,” “Not Your Typical Politician,” “A Literal Newcomer to Elective Politics,” and of course, “One Tough Nerd.” Whatever the title, Rick Snyder was the right person at the right time as Michigan voters chose a replacement for outgoing governor Jennifer Granholm in November 2010. As Michigan grappled with the economic devastation wrought by the Great Recession of 2007-2009, the tax accountant and former Gateway executive shuttled around the state in his trademark “Nerdmobile” promoting “Rick’s 10-Point Plan to Reinvent Michigan.”.
Michiganders, jaded by a decade of economic stagnation and political squabbling in Lansing, were intrigued by the soft-spoken Republican’s “One Tough Nerd” campaign and seemed to relish the prospect of a technocrat in the governor’s office. On November 2, voters elected Snyder the 48th governor of Michigan in a 58% to 40% landslide over Lansing’s fiery Democratic mayor, Virg Bernero.
Now three and a half years into his first term, Governor Snyder is asking voters to give him more time to implement his plan. Re-branded “Michigan’s Comeback Kid” by his campaign, Snyder has led the state through a modest economic recovery chanting his mantra of “relentless positive action” every step along the way. However, he was also at the helm during contentious political battles over right-to-work legislation, the Detroit bankruptcy, and the Affordable Care Act’s Medicaid expansion, often taking positions that angered Democrats and Republicans alike. Still, he is unceasingly confident that he will come out on top when evaluated against his latest opponent, former Democratic Congressman Mark Schauer.
As part of that evaluation, a re-examination of “Rick’s 10-Point Plan” is warranted. Point by point, I will assess the Governor’s progress toward his initial promises to the people of Michigan in the following discussion.
1. Create More and Better Jobs
“Rick believes that Michigan needs to cultivate a thriving and globally competitive economy with a diverse business base, enabling job growth and prosperity. His entrepreneurial experience, management over the growth of Gateway and leadership in economic development programs, such as Ann Arbor SPARK and the MEDC, make him uniquely qualified and positioned to lead this state in creating more and better jobs. “
Governor Snyder appears to have followed through on the “more” part according to the Bureau of Labor Statistics. When Snyder took office in January 2011 Michigan’s unemployment rate had already declined to 11% from its 2009 Great Recession peak of 14.2%. As of April 2014, it is 7.4%. The Snyder campaign is quick to take credit for the significant decline, claiming that, under the Governor’s leadership, “Michigan gained 220,000 private sector jobs” as a direct result of policies that have “created a better environment for job creators” (Cohn, 2014; Skubick, 2014).
Snyder’s critics are quick to note the concurrent fall in the national unemployment rate from 9.1% to 6.3% over the same period. Specifically, they argue that Michigan’s economic recovery is tied directly to the robust turnaround of the U.S. auto industry—something that may not have occurred without the Obama Administration’s 2010 “bailout.” Moreover, fact checkers have dinged the campaigned for the job creation figure noted above (used in TV ads), saying it was based on a forecast not available to the public and fails to mention that employment is still half a million jobs behind pre-recession levels (Skubick, 2014).
As for the promise of “better” jobs, Michigan has indeed experienced its fastest employment growth in the higher-wage professional, business, and manufacturing sectors according to analysts. Again, Snyder’s critics refute any causal link between growth in these areas and the Governor’s policies, arguing instead that “it has everything to do with the assistance the federal government has provided to the auto industry.” Nonetheless, the Administration touts the controversial right-to-work law passed in 2012 and its pro-business tax policies as key to “encouraging entrepreneurship and spurring more investment in Michigan” (Daum, 2014). Those tax policies are the subject of Rick’s next point.
2. Reform Michigan’s Tax System
“Rick believes that we need to reduce the tax burden on families and businesses in Michigan. Rather than advocate for short-term solutions, Rick wants to reform Michigan’s tax system so that it facilitates economic growth by being simple, fair, competitive, and efficient.”
Tax reform has been a major initiative of the business-savvy Snyder from Day 1, and thanks to the Republican legislative majority, most of the Governor’s tax plan was implemented during his first few months in office. Few would argue that these changes constitute a major reform of Michigan’s tax system, yet there is wide disagreement about who is reaping the benefits.
One of Snyder’s first legislative victories was the elimination of a tax that he says was “fundamentally stupid” and “killed jobs.” The Michigan Business Tax (MBT)—passed during the Granholm Administration to replace the reviled Single Business Tax—was itself widely unpopular due to its complexity and perceived unfairness to small businesses. The replacement 6% corporate income tax constitutes a major simplification of the business tax code and a $1.7 billion per year reduction in the amount of tax businesses pay (Daum, 2013).
To fund the massive business tax cut, individual income taxes were increased by $1.4 billion per year. A large portion of this increase is the result of eliminating Michigan’s generous pension exemption from the state income tax code (Michigan was previously among 10 states that exempted all pension income from taxation). While the Governor defends this move claiming that it’s “much fairer,” Democrats argue that it “shifted an incredible tax burden from businesses to individuals” with little to show in terms of job creation (Daum, 2013). Moreover, seniors’ advocacy groups like the AARP say that, while they can appreciate shared sacrifice, “every single penny of this increase” will go directly to business (Preddy, 2011).
Another group tapped to pay for the business tax cut was recipients of the state Earned Income Tax Credit. The state EITC benefited working families by providing a tax credit equal to 20% of the federal version of the credit, averaging about $430 annually for a qualifying family. The credit was cut to 6% of the federal version, or about $140, for the 2012 tax year (Associated Press, 2011). This change was decried not only by advocates for the poor but also by economists, who prefer “wage subsidies” like the EITC over the minimum wage which may have adverse effects on employment (Ballard, 2010).
Far less controversial was Snyder’s push to phase out Michigan’s Personal Property Tax (PPT) on industrial machinery and small business equipment. The PPT is an important source of revenue for communities with large manufacturing bases, yet officials in those same communities have complained that it saps competitiveness and “penalizes businesses willing to expand and invest in new equipment” (Oosting, 2014). Indeed, business owners lament having to pay an annual tax on their equipment after paying the 6% sales tax at the time of purchase. With the governor’s encouragement, a bi-partisan group of lawmakers approved a PPT reform bill in late 2013 that would phase the tax out completely by 2023 and replace lost local government revenue by redirecting a portion of Michigan’s 6% use tax (Oosting, 2014).
The Governor’s tax reforms have indeed coincided with job growth, as noted above. However, it is difficult “to separate the effects of tax changes from the effects of all the other things that are going on,” according to Michigan State University economics professor Charles Ballard. Despite the difficulty of establishing a causal link between tax policy and job growth, it appears that Snyder’s reforms have achieved his objective of improving Michigan’s “business climate.” Indeed, the state has improved its standing in several “business friendliness” rankings, including CNBC’s “Top States for Business” in which Michigan has gone from 41st in 2010 to 26th in 2014 (Cohn, 2014).
3. Fix Michigan’s Broken Government
“It’s time we reinvent state government so that it runs efficiently and serves its citizens as customers. Rick wants to restore ethics, accountability and transparency to state and local government. Rick believes we need a new approach to governing that is not politically motivated, but solution oriented. Rick wants to replace an antiquated bureaucracy with a government that gives taxpayers results for their tax dollars.”
Governor Snyder has enjoyed a Republican legislative majority throughout his first term, making it relatively easy for him to implement his Conservative agenda. To the typical Michigander, this cordiality is a stark contrast to the constant inter-party warring of divided government during the Granholm years. The friendly legislature notwithstanding, Snyder has in fact implemented several measures to improve transparency and accountability in Michigan state and local government.
The Governor often reminds us that he is an MBA and accountant by training, and as such, he promised make policy decisions based on metrics rather than politics. Thus, one of Snyder’s first initiatives was the development of Mi Dashboard, a website that provides state performance measures in the areas of economic strength, health and education, value for money in government, quality of life, and public safety. He then extended the dashboard concept to all state agencies and, in a controversial move criticized by local governments, signed a law requiring counties and municipalities to establish online dashboards as a prerequisite for state-local revenue sharing payments.
4. Create an Environment that Will Keep Our Youth – Our Future – In Michigan
“Rick believes that we need to create opportunities, networks, programs, and environments across Michigan that will cause our young people to want to stay in this state. His experience as an entrepreneur and mentor has given him an understanding of how Michigan can retain and attract young talent.”
The Governor’s critics have accused him of furthering Michigan’s “brain drain” by slashing college and university budgets and cutting college scholarships awarded to college-bound high school students (education is discussed in detail below). However, one Snyder initiative announced in early 2014 is being applauded for offering a unique solution to bolster Michigan’s talent reserves.
Governor Snyder plans to attract 50,000 skilled immigrants to Detroit over five years using a special visa program aimed at those “with advanced degrees or exceptional abilities in the sciences, arts, or business.” The goal is to infuse new energy and entrepreneurial talent into the city to hasten its recovery. Immigration reform may have stalled at the federal level, yet Snyder is pushing ahead with his own smaller-scale plan to attract talented immigrants to Michigan. Indeed, he has been in talks with federal immigration officials and recently attended the opening of the newest state agency—the Office for New Americans—in Detroit (Gray and Helms, 2014).
5. Restore Cities and Control Urban Sprawl
“In order for Michigan to truly reinvent itself, its cities and communities must become more vibrant. Rick will work to improve the state’s city centers and create attractive living and working environments for its citizens. Rick believes infrastructure and transportation funding must be prioritized and also supports the establishment of a proper mass transit backbone in the state.”
Depending on who you talk to, the Governor’s leadership on urban affairs has been either strong and courageous or heartless and autocratic. At his urging, the legislature passed a new, tougher version of Michigan’s Financial Emergency law early in 2011 that strengthened the hand of Emergency Financial Managers appointed by the Governor to “fix” the balance sheets of cities under severe fiscal stress.
The controversy arises from the provision that gives an unelected EFM legal authority to supplant elected officials and strip them of all decision-making capacity in order to “fix the financial damage without being beholden to local political interests.” Once in place, EFMs are tasked with making unpopular decisions that often involve cutting services to already disadvantaged populations. It has been called the toughest law of its kind anywhere in the country (Holeywell, 2014).
Critics argue that the “dictator law” subverts the democratic process by installing managers who are not accountable to city residents. Moreover, charges of racism have stemmed from the fact that five out of six cities controlled by EFMs in 2013 were majority African American. A staggering 49% of Michigan’s black population resided in EFM-run cities following the appointment of Kevyn Orr as Detroit EFM in 2013 (Abbey-Lambertz, 2013).
At the extreme, some residents and elected officials have accused the Snyder Administration of attempting to “systematically dismantle urban communities and promote a regionalized approach that favors counties.” They point to the Governor’s support for PA 4 and dramatic cuts to state-local revenue sharing which were passed within months of the business tax cut discussed above. Meanwhile, the state was on track to end 2011 with a $450 million surplus (Holeywell, 2014). To these critics, the Governor’s policies represent a betrayal of the promise made in Point #5.
Snyder and Republicans in the legislature refute such criticism arguing that the EFM law is merely “protection for taxpayers” because “if a locality declares bankruptcy, taxpayers statewide could be left holding the bag.” Thus, a manager with wide decision-making latitude is necessary to make difficult choices that a democratically elected official is unwilling or unable to make. For example, EFMs have the power to void union contracts (another source of criticism) while mayors and city managers do not (Holeywell, 2012).
The EFM law has held up to multiple court challenges and—fueling even more controversy—a 2012 ballot initiative in which voters repealed PA 4. Following the repeal, the legislature promptly passed PA 436 which reinstated much of the old law but gives local governments the option of choosing an EFM, filing Chapter 9 Bankruptcy, consenting to mediation, or signing a consent agreement. It is also referendum-proof (Jeffries, 2013).
The controversy over EFMs has faded slightly since then, perhaps owing to the shock of Detroit’s Chapter 9 bankruptcy filing in July 2013. By the time EFM Kevyn Orr determined that the filing was inevitable, a good portion of Detroiters (41%, according to a March 2013 poll) had warmed to his appointment (AlHajal, 2013). Moreover, the Governor may have improved his standing with some former critics thanks to his major push for a $195 million “Grand Bargain” passed by the legislature in June 2014 that will minimize pension cuts for 23,000 city retirees (Oosting, 2014).
6. Enhance Michigan’s National and International Image
“Rick believes Michigan can become a global comeback story. He believes the state must encourage and support tourism, create a culture of entrepreneurship, invest in the arts, and protect and improve the quality of life for its citizens.”
There is little disagreement that Governor Snyder has worked diligently to enhance Michigan’s image, beginning with his support for the award-winning Pure Michigan tourism advertising campaign. Metrics-driven as he is, Snyder pushed for increased funding of Pure Michigan which has an estimated return on investment of about five dollars for every dollar spent. The international marketing campaign attracted approximately 3.8 million out-of-state visitors from the U.S., Canada, Europe, and Asia who spent more than $1.1 billion dollars in Michigan in 2012 (Sanchez, 2013).
In addition to tourism, Snyder has sought to build Michigan’s image abroad as a good place to do business. He completed his seventh international trade mission in March 2014, visiting German and Italian auto parts suppliers to persuade them to locate or expand operations in Michigan (three German suppliers have announced expansions since his March 2012 trip to that country). He has also traveled to Asia, Israel, and Canada to lobby for business expansions, and his lieutenant governor has made similar trade trips to the Netherlands, Brazil, and Mexico (Anders, 2014).
7. Protect Michigan’s Environment
“As a native Michigander, Rick knows that Michigan’s awe inspiring lakes, landscapes, and natural resources are some of its most valuable assets. Rick has served on the Nature Conservancy and believes that protecting the environment and growing the economy can be done simultaneously. Michigan needs to be a leader in the innovative movement toward alternative and cleaner energy.”
Though the Governor has not prioritized environmental issues in his first term, he spoke in late 2013 about plans to “reduce the state’s reliance on coal, increase the use of renewable energy and natural gas, and boost energy affordability while protecting the environment.” He also wants to work on reducing mercury emissions, acid rain, and air pollution that damage Michigan’s natural resources. Though environmental groups would prefer tougher regulations on the natural gas extraction method known as hydraulic fracturing (or “fracking”), Snyder believes that Michigan “is a role model for fracking done right” (Anders, 2013). Overall, environmental groups have given him good grades (MLCV, 2013).
8. Reform Michigan’s Educational System
“Rick believes that a child’s progress from pre-kindergarten through college and advanced degrees is the cycle on which the state’s efforts should be focused and coordinated. Rick believes that schools, teachers, and parents must renew their commitment to ensuring that each child is given the best possible preparation and education for life which is critical for future generations to be competitive and innovative.”
Governor Snyder’s education policies are decidedly Conservative, from his promotion of charter schools to his support for more rigorous teacher performance evaluations and tenure reform. His budgets have slashed university funding, and he orchestrated the state takeover of 15 struggling Detroit Public Schools that were organized into an entity called the Education Achievement Authority. Moreover, the controversial right-to-work legislation he signed in late 2012 significantly weakened the power of teachers’ unions in Michigan.
Snyder argues that these changes promote teacher accountability and effectiveness to better encourage “student growth.” Many educators and education activists, on the other hand, accuse the governor of using “fuzzy math to shortchange Michigan children” (Knight, 2014). This stems from the fact that, while K-12 education funding has actually increased during Snyder’s tenure, a good chunk of that increase was paid into the state retirement fund for teachers rather than being earmarked for classroom instruction (Oosting, 2014). On the topic of charters, Democratic Gubernatorial candidate Mark Schauer has questioned the motives behind Snyder’s insistence on strict oversight of regular public schools while backing away from requiring private charter management companies to open their books (Gray, 2014).
Despite these differences of opinion, all sides were on board with Snyder’s $65 million increase in spending on Michigan’s pre-K Great Start Readiness Program in each of fiscal years 2013 and 2014. That amount constitutes the largest increase in preschool funding nationwide in 2013 and will make Michigan a “no-wait state” for preschool seats (Smith, 2014). Also, in typical Snyder fashion, the Governor crossed the isle to embrace the national Common Core education standards welcomed by most educators but reviled by many Republicans.
9. Reform Michigan’s Healthcare System
“Every citizen should have access to affordable and quality healthcare. Rick strongly believes in prevention, wellness, and personal responsibility. He wants to move Michigan to a more patient-centered model to achieve large cost savings, promote wellness, and improve overall service quality.”
To the dismay of many in his own party, Governor Snyder advocated forcefully for the Affordable Care Act Medicaid expansion made optional to states by a 2012 Supreme Court ruling. While other Republican governors rejected the expansion for political reasons (even though it cost their states millions in federal funding) the pragmatic Snyder embraced it, saying that it’s “about the health of fellow Michiganders,” not politics. He was able to secure bi-partisan support for the “Healthy Michigan” bill which expands Medicaid to approximately half a million low income Michigan residents (Oosting, 2013).
10. Bring “Winning” Back to Michigan
“Rick believes that it is time for this state to create a hopeful, positive culture and attitude where personal responsibility and collective determination introduce us to a new era. Rick also believes in the importance of embracing our racial, social, and geographic diversity to reach common goals for the state.”
Rick’s final point is more of a campaign slogan than policy prescription. Nonetheless, the Governor repeats a version of it in nearly every press conference when he calls for “relentless positive action.”
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