News Story

Decorating the “Christmas Tree” Budgets

Congressman Gary Peters, Republican state lawmakers, and Lansing’s “laundry list of unnecessary pork”

Democrat Congressman Gary Peters of Bloomfield had a big target on his back last year. Tea party groups in Oakland County and across the nation wanted him out of Congress due to his votes to grow the federal government. But his spending ways didn’t start in Washington. As a member of the Michigan Senate in 1999, Peters voted for two budget bills so decorated with extravagant spending that one Lansing political newsletter compared them to a Christmas tree. Among the goodies was $10 million to buy office furniture for politicians. Future Senate Majority Leader Mike Bishop, R-Rochester, called one bill a “laundry list of unnecessary pork.”  

The next year, yet another budget Christmas tree would be decorated, and Peters would again vote ‘yes’ on all of the ornaments.

But Peters’ critics might be surprised to learn the name of a state representative from that era who matched him vote for vote: Rocky Raczkowski, the candidate Republicans promoted unsuccessfully to dislodge Peters from Congress last year.  And Rocky wasn’t alone: Most Republicans in the state capitol voted exactly the same way.

Much like the situation taking place today, this was a period when Republicans controlled the entire state Legislature and the governor’s office.  The decision to spend and how much was almost entirely theirs. If today’s tea party groups are looking to hold Republicans accountable for their deeds as well as their words, then they should take note and remember that Republicans running Lansing does not necessarily equal frugal spending.

Because he was in the minority in the Michigan Senate, Peters had little power to control the bills being submitted to him by the majority Republicans. He had only the choice to support or reject the spending bills being proposed. Raczkowski, on the other hand, was the majority floor leader in the Michigan House – literally the second-most powerful person in the chamber and one of those primarily responsible for the Legislation that came up for a vote and got sent along to the governor.

State government was then running huge surpluses, giving the politicians in charge – such as Raczkowski – the idea that they had boundless opportunities to spend it. Even though Republicans held a majority of the seats in the Legislature, just two of them voted against all of these Christmas tree bills. Few of them suspected the economic collapse that would swiftly take hold in Michigan as they were spending this surplus tax revenue.

Consider the 1999 spending bills: Senate Bill 68 and House Bill 4075.  When it was all over and these were enacted into law, Republican lawmakers in the House convened a task force on “government waste” and criticized themselves for at least $131 million in nonessential spending. The Gongwer capitol newsletter quoted the task force as follows: “Before members of this task force consider recommendations on how to reduce government waste, it is important to examine our own contributions to the problem.”

A few of their “contributions”:

  • $4 million for the Windmill Island Village project in Holland
  • $5 million for the Henry Ford Museum in Dearborn
  • $10 million for the Detroit Symphony Orchestra
  • $5 million for the Detroit Science Center
  • $35 million for the Detroit Institute of Arts
  • $2 million to restore a wall at Fort Mackinac
  • $1 million for the Museum of African American History
  • $10 million for new furniture to go in a new House of Representatives office building
  • $500,000 to demolish the old House of Representatives office building

When these bills passed, Gongwer said they were part of an agreement between “Republican leaders” and Gov. Engler to boost spending of taxpayer dollars by more than $500 million over a two year period, due to the “strong economy” that “bore its fruits.”

Most Republicans had their names all over the 1999 supplemental spending. Senate Bill 68 passed on a vote of 37-1 in the Senate and 101-1 in the House. House Bill 4075 passed 91-16 in the House and 31-7 in the Senate.

The only lawmakers to vote against both bills in 1999 were state Rep. Bob Gosselin, R-Troy; and state Sen. Dave Jaye, R-Washington Twp. Both lawmakers issued public calls for a halt to the spending spree before it continued into the following year.

“There’s so much taxpayer money in Lansing that we’re tripping over it in the hallways,” said Jaye in a news release picked up by the MIRS capitol newsletter on Jan. 1, 2000. “The $355.5 million state budget surplus is a direct result of excessive taxation, and I am formally requesting Governor Engler to return this surplus money to the taxpayers.”

But much of that advice went unheeded by June of 2000 when Senate Bill 968 was passed. What Gongwer again called “the brightest Christmas tree in many legislative sessions” and a “massive” spending bill was loaded “full of goodies” directly costing Michigan taxpayers an extra $460 million. With another $140 million kicked in from federal taxpayers, the full total topped out at over $600 million.  In March, Engler called a press conference to attack the Republican-led Legislature for porking an earlier version of SB 628 up to $435 million. He was annoyed because this total was already $117 million above his original request.

But then, by the summer, the bill grew another $170 million heavier still! At that point state budget estimators were projecting even higher surpluses, and this seems to have muted Engler’s criticisms. He signed SB 968 with a note thanking the Legislature for their work.

Once again, it had the support of both Peters and Raczkowski; and also massive support from Republicans. The bill passed 102-4 in the House and 29-9 in the Senate.

Yet again, Gosselin and Jaye were in opposition. Gosselin even offered up an amendment before the bill passed, asking the House to cut $220 million in spending from the bill and return it instead to the taxpayers as a refund. His amendment was defeated.

Some examples of the ornaments s on the “brightest Christmas tree in many legislative sessions” were as follows:

  • $10 million for the Detroit Zoo
  • $3 million for an aviation history museum in Kalamazoo
  • $11 million for arts and culture grants
  • $5 million for the Dept. of Management and Budget to demolish buildings
  • $500,000 for an iron museum in Negaunee
  • $15 million to assist public TV stations in their conversion to digital broadcasts

After he had specifically threatened beforehand to line-item veto the money for public television stations, lawmakers sent SB 968 to Engler with the $15 million appropriation still in it. He made good on his threat and zeroed out the digital conversion spending, but signed the rest of SB 968’s spending into law on Sept. 20, 2000.

Ten weeks later, on Dec. 1, 2000, Gongwer published a story alluding to the “slowing economy” and “tumbling stock market.” Not even a year after Jaye’s statements about “tripping over” the extra money in the capitol hallways, this was the first rumblings of what would swiftly become the decade of economic hardship that Michigan is still enduring.

The following September, one year after SB 968 was signed, Michigan had lost more than 100,000 jobs and its unemployment rate had grown  from 3.9 percent to 5.5 percent, topping  5 percent for the first time since 1995. From that point on, it kept going up. Michigan hasn’t seen unemployment as low as 5.5 percent since 2001.

Nothing has changed in the incentive structure inside Lansing that caused lawmakers of both parties to approve this spending. However, outside Lansing something has potentially changed. Today there is a social movement called the tea party that's capable of making politicians re-think their priorities. Whether it does so or not remains to be seen.

Because runaway government spending is the primary motivating concern of the tea parties, it seems likely that they would have balked mightily had they been around in 1999 and witnessed the decorating of these Christmas trees. It is entirely possible that their objections would have been enough to chop them down.

Eternal vigilance is the price of liberty. The lesson of the Christmas tree bills is that tea parties need to watch and reprimand Republicans just as much as they do Democrats - perhaps more so when the GOP is in charge of the whole state government.

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.