MACKINAC ISLAND – Michigan needs to restructure its tax system to help bring about economic growth again, five candidates for governor said Thursday at a forum at the Detroit Regional Chamber’s Mackinac conference.
Most said a new tax structure is more important than promising to not raise taxes, though Attorney General Mike Cox pledged he would not raise taxes, and in fact has proposed cutting business taxes by $2 billion.
Appearing at what was described as a discussion, rather than a debate, among potential candidates were Mr. Cox, U.S. Rep. Peter Hoekstra (R-Holland), Rep. Alma Wheeler Smith (D-Salem Twp.), Sen. Tom George (R-Kalamazoo) and Secretary of State Terri Land.
In addition to taxes, they covered issues such as the wisdom of selling the governor’s residence on the island, accepting detainees at Guantanamo at an Upper Peninsula prison, the state’s budget mess, the value of economic targeted development incentives and a part-time legislature in exchange for extended term limits.
Among the four Republicans involved, little direct criticism was thrown the way of Governor Jennifer Granholm, though Cox did describe her as the state’s captain who has failed to steer the ship of state, and took a dig at Lt. Governor John Cherry, also a Democratic candidate, for not showing up at the event. Also not appearing was Ann Arbor business executive Rick Snyder, who is considering a bid for the Republican nomination.
Land, George, Hoekstra and Smith all said they would not sign a pledge to not raise taxes, something that Cox said he would definitely sign, favoring instead a wholesale restructuring of the tax system.
Land said a review of the tax structure is warranted, suggesting she would embrace a broader base that may mean higher taxes on some segments as the overall rate is brought down.
Smith also favored restructuring of taxes, saying, “Until we raise the dollars in order to provide the services citizens desire, we’re just spinning our wheels.” She said a review is warranted of tax expenditures and exemptions so the state is no longer picking “winners and losers.”
George said he would not sign the pledge because “we don’t know what the future holds.”
Cox said signing the pledge is not irresponsible fiscal policy. “It’s about getting a better product to sell nationally,” he said.
“We cannot cut our way to prosperity,” Hoekstra said. “The bottom line is we’ve got to take a look at what makes us competitive and what will bring us back.” Growth, he said, will enable taxes to be cut at a later time.
He said a better environment will allow the state to use the incentives under the Michigan Economic Growth Corporation “in a limited and strategic way. We need to create an environment where different industries can be successful,” he said.
George said it would be a mistake to unilaterally disarm the state in an environment where other states offer tax incentives to lure business expansion. “We can pull back a little bit, but we can’t disarm,” he said.
Smith said the incentives do not work, but also would not get rid of the MEDC. However, she preferred to swap the incentives for better education support as one way to improve the state’s quality of life.
Cox said the state stands a better chance of turning around with a broad-based tax cut for all taxpayers rather than targeted exemptions.
The candidates generally said they could support the release of 3,400 inmates, something Granholm has proposed as way to trim corrections costs, but said it should not be done as a budget matter.
Hoekstra said the decision on whether persons are serving time who do not need to be in prison should be made independent of budget considerations.
Cox simply opposed the release of prisoners the way the Granholm administration has proposed, saying it will place an additional and unwarranted burden on Detroit where most will relocate. He said if savings are realized in corrections, the money should be directed to law enforcement.
George, along with Smith, were the candidates most open to a proposal to bring Guantanamo detainees to a vacant UP prison. To concerns raised by Mr. Hoekstra that it would mean moving 400 “of the most dangerous” persons to the UP, he said the plan is not “about releasing them into the woods.”
Several said selling the residence would be symbolism that would do nothing to address the state’s problems, and Ms. Land said it should be kept as a state asset perhaps as part of the park system and available for general use.
Cox, saying there are a “lot bigger issues” facing the state, said, “The discussion should be on what kind of Michigan will attract and retain jobs.”
George and Smith found themselves in agreement that the real focus in dealing with the budget has to be on where significant money is spent, though George said that means targeting health care and Smith said corrections is the biggest drain on the treasury.
Hoekstra said he would absolutely pursue selling the residence, saying the governor cannot have credibility in seeking sacrifices elsewhere if the perks of the office remain off limits.
The real question is whether he is willing to put everything on the table, he said, adding he would look at tax simplification, reexamining Proposal A and how education is funded and the state bureaucracy.
Cox said he would go beyond symbolism in ways such as increasing the portion of health care benefits that state employees pay from 5 percent to the national average for public employees of 23 percent, a move he said would save $89 million a year.
The candidates exhibited little taste for a part-time legislature, even if linked to relaxed limits, a policy that Mr. Hoekstra supported but now has changed his mind and favors longer term limits. “A part-time legislature may be nice to talk about but it’s not going to create a job or provide economic opportunity in this state,” he said.
Smith said a part-time legislature would put more distance between people and state government decisions by putting more power in the hands of the governor.
Land said it is more important for the Legislature to have a “drop dead” date to complete its work, which would also provide businesses with the certainty that policy issues have been completed for the year.
George offered the clearest support for a part-time body, saying it is what most states have and would allow citizens to continue to have a hand in another career.
But Smith said when the Legislature was part-time, it meant more influence from business and labor but few individuals who were able to get a three-month leave from their job to serve in the Legislature.
SNYDER: Snyder, who circulated in the Grand Hotel lobby following the gubernatorial event, said he was a little disappointed. “I didn’t hear a concise vision or a clear plan,” he said of the candidates.
Asked if wished he had participated, Snyder reiterated that he is still in the listening phase of his exploration for governor. “A lot is getting feedback,” he said, adding that he is nearing an announcement on entering the race.
Snyder said state government needs to be restructured from the ground up, including its regulatory structures, with a view to treating residents and businesses as customers. “State government needs to be faster and cheaper,” he said.
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
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