Keeping the Engler Revolution on Track

Evaluating a governor's performance in office is, to a significant extent, a subjective exercise. The tendency is natural to make judgments according to preconceived notions and ideology. Some people rate highly a chief executive who sponsors programs and policies which expand the role and scope of government; others prefer an emphasis on smaller government and a more favorable climate for private enterprise and job creation.

If one of the benchmarks for appraising a governor is leadership, by which we mean fixing on a clear mission for the state and forcefully taking it in that direction, then people of all persuasions in Michigan might easily agree on this: John Engler is clearly a leader. At The Mackinac Center, we believe he has guided the state onto a new and generally positive path.

On November 14, 1990, The Mackinac Center released a twenty-point advisory document entitled "Road Map for a Michigan Renaissance." (Copies available upon request). In it, we argued:

"Michigan sorely needs a clean break with the past. No gimmicks, no empty rhetoric, no expensive promises, no flashy photo opportunities – just bold action and a new direction.

"The politics of special interests and vote-buying with public money must be curtailed. The spiral of rising government spending followed by new and higher taxes must be reversed. The private sector, burdened by the worst tax climate of the Great Lakes states, should be revitalized. State government must be downsized and streamlined so that Michigan citizens can once again enjoy an environment conducive to work, job creation, investment, entrepreneurship, good schools and safe streets."

Though we feel the administration has fallen short of its full potential in certain areas, we believe that substantial progress was made in 1991 toward advancing those objectives.

In handling the most pressing problem inherited from the previous administration – a huge budget deficit – we urged that Governor Engler not take his cue from either former Governor Blanchard or President Bush and raise taxes. That, we said, "would quickly expend the good will of the voters and injure the fragile Michigan economy as well."

For his achievement of a balanced budget without tax hikes, Governor Engler earns our highest marks. In a year when some 30 states legislated a record $17 billion in new taxes, Governor Engler opted instead to reduce spending. That, plus the Governor's pursuit of a ballot initiative to cut property taxes – coming on top of a legislated property tax "freeze" – shows that so far, he is not content to simply stop the growth of government in Michigan. He wants to reverse it – a long overdue objective we sincerely hope he doesn't abandon.

His fiscal accomplishments, along with a re-ordering of the state's priorities, legitimize the term, "Engler Revolution." The danger now, as we see it, is of the revolution sputtering and giving way to "business as usual." It is still very much an unfinished revolution, and one that is under steady assault from the bureaucracy, the big spenders in the Legislature, and their allied special interests.

The "Reagan Revolution" in Washington was largely a one- or two-year event with much fanfare but limited lasting results. The tax cuts of 1981 gave way to tax hikes starting in 1982. Departments and programs slated for extinction were still firmly in place by the time the president's fervent rhetoric had faded. Career bureaucrats and politicians hijacked the revolution and made sure that by the middle of the first Bush term, the federal establishment loomed as large and as irresponsible a facet of American life as ever.

We do not want to repeat that scenario in Michigan. Therefore, to keep the Engler Revolution on track, we advise the Governor to maintain and strengthen his vision of a smaller, leaner state government and a stronger, freer private sector. Proposals follow in this document to assist him in accomplishing that.

We urge the Governor not to shrink from the politics of confrontation, for surely his opponents willnot. That means keeping on the offensive with the Legislature, holding the feet of the big spenders to the fire. Make them explain and defend why Michigan should be a high tax state. Make them tell us why we should forget that tens of thousands of residents pulled up stakes and left the state in the 1980s, in great measure because Michigan's business climate had become overburdened by public sector intrusion. Make them account for every dime of misspent public monies in failed, wasteful programs. Make them justify why Michigan should pursue policies of welfare dependency, counterproductive regulation, and subsidized boondoggles while the rest of the world embraces enterprise, competition and free markets.

If the Governor wants to leave a distinct and permanent mark on his office and the state, he must continue to offer the people of Michigan a clear and unblemished vision. He must be prepared to take his case for less government past the din of Lansing and to the taxpayers themselves, more forcefully and convincingly than he has to date. Voters in next November's legislative elections should be presented with-to borrow a phrase from many elections ago-choices, not echoes. A policy of "go along to get along" will squander the gains of 1991 and erode the Engler constituency.

In reviewing the Engler record against the program advocated in our "Road Map" document, we find that 7 of the 20 points we raised have been implemented fully, 6 have been partially adopted, and only 7 saw no action at all.

• The Commerce Department, as noted above, has been largely gutted of its numerous wasteful subsidy programs.

• The Home Ownership Savings Trust (HOST) program has been scuttled.

• The Michigan Education Trust is under serious review, and no new contracts were engaged in 1991.

• The policy of regular bail-outs for Detroit has been scaled back as the Governor places more emphasis on creating favorable business climate conditions for urban revitalization.

• Limited schools-of-choice, charter schools, and some deregulation of education have all been pushed by the administration.

• Promoting volunteerism has become an Engler policy, spearheaded by the Governor's wife Michelle.

• The "enterprise zone" concept has been advanced, most notably by a bill the governor signed in December.

• The size of the bureaucracy including the Governor's office, as noted above, has been cut by 5 percent.

• Welfare reform is underway, with elimination of General Assistance for the able-bodied and employable the centerpiece.

Much more needs to be done, however. To that end, we submit the following recommendations for 1992 and beyond:

1. Establish a blue-ribbon panel, patterned after the federal "Grace Commission" of the 1980s, to scrutinize the state budget and all of the state's activities for the purpose of identifying a) waste and duplication, and b) opportunities for privatization. The panel should be made up of individuals primarily from the private sector and be privately-funded.

2. Support legislative efforts to deregulate Michigan intrastate trucking to save industry and consumers millions. There ought to also be a comprehensive review of all other existing regulations on Michigan enterprise and elimination of those which do not stand up to rigid cost-benefit analysis.

3. Implement privatization within the state's prison system and give county governments the option to pursue it within their own jails. Experience in more than 15 other states suggests this is just too promising a cost-saver for Michigan to ignore.

4. Begin to make organized labor more accountable to its membership and a more positive contributor to the state's economy by a) enforcing worker "Beck" rights, and b) repealing the Prevailing Wage Act. Under the Supreme Court's 1987 Beck decision, workers are entitled to refunds of union dues that go for political or other non-collective bargaining purposes. The Prevailing Wage law raises construction costs in Michigan by effectively mandating that projects receiving any state money employ union-scale labor.

5. Push for revision of the state's Constitution to allow state and local school funds to follow pupils to the schools of their choice, public or private. The Engler plan for educational choice currently falls short of putting meaningful choice and competition into schooling.

6. Propose a wide-ranging tort and legal reform package that would set strong but reasonable limitations on non-economic damages in liability cases; discourage frivolous lawsuits and excessive damage awards; encourage alternative dispute resolution mechanisms such as grievance hearings, arbitration and mediation; clarify and limit the right to sue for wrongful discharge; and make plaintiffs more responsible for their own behavior.

7. Alleviate the burgeoning health care crisis by reducing costly state-mandated health insurance coverages, relaxing rules that inhibit competition and raise prices within the health care industry, and introducing tax incentives for the provision of health insurance.

8. Stop unfair state competition with the private sector. State government competes head-on with private firms in a number of areas. Sometimes this involves such things as public sales of computers and recreational facility time by the universities, and in other cases it involves more direct state agency intrusions. Taxpaying firms should not have their tax dollars come back at them in the form of subsidized competition from non-taxpaying state entities.

9. Pursue further tax reform to help refurbish Michigan's business climate. High on this agenda should be abolition of the state's onerous inheritance tax and a reduction in the Single Business Tax rate. The administration must also resist the temptation now spreading in Lansing to disguise tax hikes through increases in so-called (but often misnamed) "user fees."

Insufficient progress on many of these nine issues in 1991 take some of the sheen off the Governor's record, but to his credit, he focused his time and efforts on many of the most important and pressing matters before the state. Also, few people could have anticipated the degree to which political partisanship over the budget slowed or prevented action in other areas.

On the first anniversary of Governor Engler's inauguration, evaluations of his performance are pouring forth from all quarters. A common approach is to assign a letter grade, from "A" to "F."

In that context, The Mackinac Center rates the Governor as having earned, overall, a grade of "B," though we consider that a grade for the first exam, not for the entire course. The "Engler Revolution," meantime, earns an "P" for "Incomplete."