State financial crisis

[skyl4rk]

Why does it seem that discussions at the state level are always trying to focus on cities, when the real problem is the morbidly obese state bloatocracy?

Many of the problems that cities face are caused by the state taking money from the cities to keep its bloatocracy well fed.

Now the prescription for the current government funding crisis includes consolidating cities and public services, allowing the state to take over with EFMs, cut public employee pay and generally badmouthing cities as if they were the problem. [[Note, I support some of these efforts, the point is that the state is avoiding the real problem which is their own budget problem).

Just another comment, the proposal to cut all public sector salaries by 5% is like accepting the fact that the elected officials are completely incapable of managing their organization. They should be deciding which government programs to keep and which to get rid of, and then cut programs. That means layoffs. The state should be trying to keep the best state employees, because they are the only ones that can get the state back on track, because the elected officials have shown they are not capable of fixing any managment problem. So dump the crappy employees and keep the good ones, that is management 101. And choose the programs to get rid of and which ones to keep based on what services the people of this state really need.

What do you think of the states response to its budget crisis? Do you have any hopes for the Snyder plan which will be presented on Thursday at 11am?

[Novine]

The state has something like 11,000 less workers today than it did in 2001. Michigan has one of the lowest, if not the lowest, number of employees per capita in the country. That makes it hard to accept your claim that state government is bloated especially when you provide no specific examples to back that up and the facts run counter to your claims.

[bailey]

The state has something like 11,000 less workers today than it did in 2001. Michigan has one of the lowest, if not the lowest, number of employees per capita in the country. That makes it hard to accept your claim that state government is bloated especially when you provide no specific examples to back that up and the facts run counter to your claims.

That's great. It's good to see Michigan getting it's per capita workforce more in line with what it can afford. However, Michigan is one of the small minority of states that does not tax the pensions of those workers when they retire. Allegedly ending that is one of the proposals in Snyders budget.

[belleislerunner]

Largely because editorials in the Freep/Det News love to run over sensational reports of how the impacts will affect one targeted group. Money is down. Times are tough. Just make the budget cuts/salary cuts and be done with it. The continual whine over the past eight years is what is maddening. You can make huge structural changes in one-two years and grow from it - or you can have "accounting changes" and random service fees and other fill/gap solutions that never address the underlying issues for 10 straight years. This is where the governor/House/Senate need to just do what has to be done and not listen to the media.

[skyl4rk]

The state has something like 11,000 less workers today than it did in 2001. Michigan has one of the lowest, if not the lowest, number of employees per capita in the country. That makes it hard to accept your claim that state government is bloated especially when you provide no specific examples to back that up and the facts run counter to your claims.

Point well taken, I assumed that the budget deficit was due to overstaffing, which apparently is not true. I still maintain that cutting programs is a better strategy than focusing on employee wage cuts.

[Hermod]

Point well taken, I assumed that the budget deficit was due to overstaffing, which apparently is not true. I still maintain that cutting programs is a better strategy than focusing on employee wage cuts.

Bloatocracy in government [[any government) is due to parkinson's Law which shows that any bureaucracy is always undergoing a natural rate of annual increase without regard to workload.

Joe Bureaucrat has eight employees in his office and is paid as a first line supervisor. He submits a scheme for reorganization of the office into two four-man branches. Now tow of the guys get promoted to first line supervisor and Joe gets promoted to second line supervisor. This goes on constantly in government.

Another ploy is job descriptions. Sue Secretary works for Joe and does [[in his eyes) a decent job. She is at the top of the pay scale for secretary and already has more "Exceptional Service" plaques than her cubicle wall will hold. Joe rewrites her job description as "Administrative Assistant" and, presto, big pay increase. A couple of years later they have to hire another secretary because an admin assistant shouldn't do menial work.

The politicians don't want to hack off the workers, so they go along. As long as times are good and increased taxes roll in every year, there is no problem. When things slow down, there is no reserve and cuts have to be made. The bureaucracy always proposes cuts that hurt the voting public most rather than in cutting the built up fat.

Turn me loose in any department of education with a copy of the org chart and a stack of non-recourse pink slips, and I can save 25% without cutting a single teacher. The same is true of any other office in government. I could cut 25% without firing a single frontline worker.

[Danny]

The NERD better not take that film incentive away. I'll be marching into Lansing and pound at his office door.

[skyl4rk]

I have been watching the hearings on internet tv, every time they talk about a tax, the state is taking all the money and not using it for what it is supposed to be used for. For example, gas taxes are not going to roads but to the bloatocracy.

http://www.mgtv.org/video/live-programming/

[Novine]

"For example, gas taxes are not going to roads but to the bloatocracy."

Try citing some examples. Otherwise, you sound like one more uninformed radio talk show host.

[slick]

and to add to the bloatacracy,

all of Snyders new appointees came in with salaries higher than Granholm was paying her appointees. There was an article on the new salaries in the Freep in January.

[skyl4rk]

I saw someone from MITA [[ http://www.mi-ita.com/ ) testify today that on a $3 gallon of gas, 19 cents goes to a gas tax, 18 to Federal tax, and 18 to State sales tax. I heard him say that very little of that goes to road repair.

http://www.mi-ita.com/Legislative/Le...6/Default.aspx

It seems like gas taxes should all go to road repair. But instead they are being channeled elsewhere.

I thought the "bloatocracy" word was a pretty good description for a state budget that has a 1.8 billion deficit.

[Jason]

It's not the right word to describe it if the deficit is because the money is being spent on government programs, and not bureaucracy. As Novine said and you acknowledged, the state has one of the lowest state employees per capita, which means that the state is not outrageously bureaucratic.

That means that even if money from the gas tax is being shuffled around to other things, state money in general is mostly being payed on programs.

My take on the budget problem is that Michigan's economy is bad, so there is less income. Michigan's economy is bad because Michigan's citizens are bad at generating economic activity. The various programs in one way or another are meant to change that. Some programs might not be effective as others and some might not be performing well at all and should be canceled while others are great investments and should be expanded.


There's this myth that all government is bureaucratic and dysfunctional, all government programs are wasteful and counter productive, and all taxes are always too high.

But maybe the government is already reasonably lean, the programs are helpful and worthwhile, and the taxes are typical.

[EL Jimbo]

I saw someone from MITA [[ http://www.mi-ita.com/ ) testify today that on a $3 gallon of gas, 19 cents goes to a gas tax, 18 to Federal tax, and 18 to State sales tax. I heard him say that very little of that goes to road repair.

http://www.mi-ita.com/Legislative/Le...6/Default.aspx

It seems like gas taxes should all go to road repair. But instead they are being channeled elsewhere.

I thought the "bloatocracy" word was a pretty good description for a state budget that has a 1.8 billion deficit.

$3 a gallon has nothing to do with the first two taxes you mentioned. The Michigan Gas tax is set at 18 cents a gallon and does not change with the price. Whether gas is $1 or $3, it is always 18 cents. The same is true for the 19 cent Federal Gas Tax. It is a set tax and doesn't change. The only tax that changes is the 6% Michigan Sales Tax.

Of those three taxes, only the Michigan Sales Tax sees most of its money being used someplace other than transportation. That money is used predominantly for schools, but a small percentage goes to fun transit efforts across the state.

The Michigan gas tax is distributed between MDOT and other transportation agencies throughout the state based on the ACT 51 formula.

The Federal gas tax is sent to Washington and is redistributed to the states based on the formulas in the current authorization bill [[the repeatedly extended SAFETEA-LU bill that technically expired in 2009). When Michigan receives its portion, that money is again distributed between MDOT and other transportation agencies in the state based on Act 51.

Transportation in Michigan also receives funding from vehicle registration fees at the Secretary of State, the 6 cent Michigan Diesel Fuel Tax, the Federal Diesel Fuel Tax, as well as taxes on Av Gas and other smaller sources.

Quite a bit of money goes to road repair in Michigan. The problem is that it is still not enough. I hope this has clarified things a bit.

[Novine]

By your numbers, 2/3s of the taxes levied on gas go either to the state or the federal government in gas taxes. I don't have the breakdown for the federal gas tax but almost all of the state gas tax goes into funding for roads. Someone from MITA might have claimed that "very little" of that money goes to road repair but I don't think there are any numbers that back up that claim.

The other 1/3 in taxes goes to the state for sales tax. Sales tax revenues go almost entirely to fund schools or local governments. Those funds were never intended for roads so even if the sales tax were eliminated, it's not as if those dollars would now be available for roads. No one is going to cut funding for roads and schools to put more money into roads.

[EL Jimbo]

By your numbers, 2/3s of the taxes levied on gas go either to the state or the federal government in gas taxes. I don't have the breakdown for the federal gas tax but almost all of the state gas tax goes into funding for roads. Someone from MITA might have claimed that "very little" of that money goes to road repair but I don't think there are any numbers that back up that claim.

The other 1/3 in taxes goes to the state for sales tax. Sales tax revenues go almost entirely to fund schools or local governments. Those funds were never intended for roads so even if the sales tax were eliminated, it's not as if those dollars would now be available for roads. No one is going to cut funding for roads and schools to put more money into roads.

CURRENTLY, the ratio is 2/3 to transportation and 1/3 to sales tax. When the sales tax was last set at 6%, the ratio much less. At that time, gas cost closer to $1 a gallon so that 6 cent sales tax on gas represented only about 1/7th of the tax revenue generated on fuel.

As far as MITA, "little" is a relative term. MDOT spends 2/3rds of its money on the Highway program. Of course some of that money on the Highway side goes to things like guardrail, signal re-timing, ITS signs, etc, but of the nearly $1.4 billion scheduled to be invested in MDOT's highway program in 2011, about $878 million of it is going either repair or rebuild existing roads and bridges or expansion projects of roads and bridges.

[skyl4rk]

And another thing, aren't the Republicans supposed to for cutting taxes? Instead the proposals being discussed in the legislature are to eliminate a tax credit [[leading to increased taxes from the point of view of the taxpayer) and a tax on pensions.

Maybe this is necessary but cut the BS and call it a tax increase.

[skyl4rk]

Well the only mention of cutting state government was in regard to stating that the budget process would be based on providing value for the money. Which is a good statement. And appropriate because cutting government needs to be done with precision. So its not something you can lay out in a speech, but has to be done in committees with a lot of discussion.

All in all very positive speech. Hopefully the Republicans who control will not piecemeal it apart.

[gdogslim]

"Why does it seem that discussions at the state level are always trying to focus on cities, when the real problem is the morbidly obese state bloatocracy?
Many of the problems that cities face are caused by the state taking money from the cities to keep its bloatocracy well fed."

Actually Michigan has a smaller State government size than many states. It is the cities here that are over bloated. The pensions are killing states finances into bankruptcy all over the country

[skyl4rk]

Well, since I made up the word bloatocracy, I get to define it. A BLoatocracy is a government that is more than one BiLlion dollars in deficit.

[Jason]

Bloatocracy is a portmanteau of bloat and bureaucracy. Unless either of those caused the deficit, it doesn't really have anything to do with billion dollar deficits.

Michigan has a billion dollar deficit but it isn't a bloatocracy.

[skyl4rk]

Bloat + Idiocracy