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Why Illinois Beats Michigan - For Now

10/6/2009

by Jerry Agar 

When the going gets tough, the tough get going...to anywhere they can find that is better for them and their family.  Who gets left behind?  The not-tough, that's who.  The unemployed, perhaps unemployable people, are left behind.  Some people are begging to leave Detroit, with its nearly 30 percent unemployment rate.

Even if you assign no blame or responsibility to those who can't find work, which group do you honestly think is better for the future of a state economy?

Michigan is dead last in economic performance according to this index.  Can we in Illinois learn anything from Michigan?

Yes, the auto industry has been a very large egg in the Michigan basket, and that egg is cracked.  But how should a state government react to that problem?  By raising taxes on everyone else?  That is what Michigan did two years ago when they put a 22 percent surcharge on the business tax and raised income taxes 11.5 percent.

How did that work out for them?  Predictably, that's how.  The state loses a family every 12 minutes, and those are the very same young, well educated, motivated people I was writing about at the start.

Michigan has the exact same budget hole this year as they had when they upped the taxes two years ago.  And today the legislature is working to find new ways to raise taxes and fees.  Do they want to lose a family every 10 minutes?  Is that the goal?

Keep in mind that a large out-migration of people seeking work serves to keep the unemployment figures artificially low in a state, even when those numbers are painfully high as it is.  All that does it mask the problem.  As the national number rises, offering less opportunity for those willing to move, Michigan's is ready to explode.

As Jack McHugh, Senior Legislative Analyst at Michigan’s Mackinac Center writes, “It's not really all that hard to cut state government spending — if you're willing to think outside the box and if you reject, "But that's not the way we've done it in the past!" You also have to be willing to anger certain special interests (including government employees and their unions) who benefit from the status quo.”

An example of the counter-productive influence and policies of unions is that of the teacher's union in Michigan.  Despite the state's economic travails, teachers in Michigan are the fourth highest paid in the nation.  Kenneth Braun points out that by paying teachers in the state at the national average, Michigan would save $1.34 billion annually. 

It is understandable that teachers would not like to lose $12,000 a year - who would? - but they are also fighting a cut to the system of $218/student.  And they will keep fighting that fight until all the students have moved out of state.

Michigan is bleeding, and politicians of all political stripes fight to keep government large, and run to do the self-serving, but destructive, bidding of the unions.

Sound familiar?

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