"Wasteful and Wrongheaded"
Lawmakers fight unemployment with more government
The direct subsidy from all Michigan taxpayers to the Michigan Department of Labor and Economic Growth will increase sharply for fiscal 2009, under an agreement ratified by large majorities in both chambers of the Legislature and signed by Gov. Jennifer Granholm on July 17. While DLEG is financed primarily with fees and federal revenue, it also receives money from state government's general fund, the main discretionary pot of revenue that comes from Michigan business, sales and income taxes. The general fund contribution for DLEG will increase by 59.9 percent for 2009, to $75.9 million. More than half of the $27.5 million increase will be used to fund "No Worker Left Behind," another state job training program that did not exist two years ago.
The total DLEG appropriation enacted for 2009 will be almost $1.4 billion — the largest appropriation ever for this department, exceeding the amount enacted the prior year by 6.6 percent.
NWLB is primarily a free tuition program open to Michigan workers who have been laid off or terminated (recent high school graduates are not eligible.) According to its Web site (www.michigan.gov/nwlb), NWLB is a one-time offer to displaced workers and provides up to two years of free instruction at one of the state's community colleges or public universities. To be eligible, a person must pursue certification or a degree in a "high demand" field, an "emerging industry," or an "entrepreneurship program." The state determines the defini-tions of these terms.
Gov. Granholm first proposed the creation of NWLB during her 2007 State of the State Address. Shortly thereafter she introduced her 2008 Executive Budget which proposed the most expensive state government spending plan in Michigan history and what would eventually become a $1.358 billion tax hike to pay for it. A brand new $40 million general fund appropriation for her proposed NWLB program was included in the request. In the acrimonious political environment resulting from the tax proposal, some lawmakers did not welcome the prospect of creating brand new spending programs.
A spokesman for Senate Majority Leader Mike Bishop, R-Rochester, observed that asking "for new expenditures to pay for free college for some people while other families are being forced to pay higher tuition costs — that just doesn't make sense." He also noted that making the request for the money "just shows again that the state doesn't have a taxing problem, it has a spending problem."
State Rep. Jack Brandenburg, R-Harrison Twp., is a member of the House subcommittee that considered "No Worker Left Behind." Explaining his decision to vote against giving it $40 million from the general fund, he noted: "I truly believe this program should be left behind."
The governor's total initial funding request for NWLB was $77 million, $37 million of which was redirected federal dollars coming in to the state. In the end, reluctant lawmakers declined to approve any of the $40 million appropriation from the state's general fund, but did allow the reallocation of federal funding in the fiscal 2008 budget for the program's creation.
This year, in her 2009 Executive Budget proposal, the governor once again requested a $40 million direct subsidy from Michigan taxpayers for NWLB. The Legislature was more accommodating this time, allowing the general fund appropriation to increase from zero to $15 million. As noted above, this new spending item represents more than half of the $27.5 million general fund increase in the 2009 DLEG budget.
State Rep. Jack Hoogendyk, R-Portage, voted against the budget, in part because of the added NWLB funding. Laying some of the blame for Michigan's unemployment troubles on the growth of government and new programs, he calls NWLB "wasteful and wrongheaded," and akin to "trimming the front hedges while the house is on fire." Hoogendyk suggested that "hundreds of thousands" of jobs could be attracted and retained if the state instead overhauled its tax, regulatory and labor policies.
In the House of Representatives, Hoogendyk was one of 34 lawmakers — all Republicans — who voted against final passage of the 2009 DLEG budget. Seventy-three representatives, including 16 Republicans, voted for the proposal. Eighteen Republicans in the Senate and 16 Democrats voted for this budget. Only three senators, all Republicans, were opposed.
The MichiganVotes.org vote tally for House Bill 5809, the bill creating the 2009 budget for the Department of Labor and Economic Growth, is below. Find the contact information for all lawmakers at www.mackinac.org/9313.
For additional information and an opportunity to comment on this issue, please see www.mackinac.org/9795.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.