LANSING – As the self-described toughest year of her administration comes to an end, Governor Jennifer Granholm said Monday that the state had to be “relentless” and “obsessive” in its efforts to restructure the economy, and that despite all the struggles Michigan will be all right in time.
“We’re a tough state, a tough people, we’ll be all right,” Granholm said as she concluded her year-end press conference.
As she offered reassurance, Granholm also said she will see her term through, attempting to end any speculation about her taking a job in the upcoming Obama administration or accepting an appointment from President-elect Barack Obama.
“Given all the crisis” the state has endured, Granholm said, “it’s important to fulfill my remaining two years. There’s a lot of work to do. … It’s important for me to stay in this chair.”
She also said she would not propose a tax increase in 2009, including a gas tax increase, as the state prepares to keep the current budget balanced and builds the 2009-10 budget.
She said the saga of former Detroit Mayor Kwame Kilpatrick, and now that of Illinois Governor Rod Blagojevich, should serve as instructional tales to anyone, especially younger people, who are thinking of elective office. Once one comes into the public arena, everything he or she does is open to the public, she said.
Officials like Kilpatrick, who finally resigned office in September as part of a plea agreement and as Granholm was holding hearings to determine if he should be removed from office, and Blagojevich should know that if a circumstance makes it impossible for a top elected executive to govern, then that person should leave office, she said.
While 2007 was tough “under the dome” as she struggled with the Legislature over a tax increase proposal, 2008 was a harder year because of the worsening struggles the state faced in the economy.
The low point of the year came in the last several weeks as the auto industry was dragged through the mud in the effort to win federal assistance to keep from going bankrupt, she said.
The struggles continue, she acknowledged, as she had reviewed notices since November that would mean another 15,000 workers would be laid off. Most of those jobs are manufacturing related.
“There’s no question 2009 will be a tough year,” she said several times during the press conference. While she hoped in 2010 the state would finally see an increase in jobs, that could also be a tough year.
She did not try to soften the reality of the state’s economic situation, saying Michigan is “in the eye of the storm” of the national recession and that the state is undertaking a “wrenching economic change.”
But she said there were still hopeful signs that the state was making the needed changes to turn the economy around. While far more subdued than her now famous assertion in 2006 that the state would be blown away by the changes to the economy in five years time, she nonetheless said the state was starting to see results from the chances enacted.
She praised the Legislature for approving all 12 of the economic development initiatives she had called for in her State of the State address. In the long difficult toll of 2008, the best time came when the Legislature approved a proposal to create a renewable energy portfolio standard. That has allowed at least two wind turbine manufacturers to come into the state, she said.
It is also part and parcel of the efforts by companies like Ovonics, Hemlock Semiconductor and Dow Corning to expand their alternative energy businesses in the state, she said.
With action last week by the Legislature to approve a measure to provide major tax breaks to development and manufacture of advanced batteries to power new hybrid cars and electric vehicles, Michigan could be in a position to not only lead the nation but the world in the development of those vehicles.
Creating an economy that is focused on alternative energy will take on greater importance when Obama takes office since he has made getting 1 million electric vehicles on the roads in a decade and to eliminate any U.S. reliance on Middle Eastern oil in the same time frame.
Those factors will help signal a resurgent auto industry, Granholm said. But the state cannot once again count on the auto industry to recuperate and restore its economic fortunes, she said.
No superhero will fly in to save Michigan, she said; restoring the state’s economy will take all persons working together.
She also praised the efforts of the Michigan Economic Development Corporation to boost the state’s economy, saying that by 2008 it had provided assistance to companies that had created 105,000 jobs.
Building a new economy will continue to require education and retraining for workers who have lost their jobs, and younger people attending college, Granholm said. She criticized suggestions of cutting funding for college scholarships, saying the state cannot let up on efforts to boost the number of college graduates as part of building the economy.
Granholm was not asked many questions about ongoing efforts to keep the budget balanced. She did say there were some services that the state would likely not be able to offer, but that those would be revealed as part of the budget release in February.
She also said that reforming the Department of Corrections was critical to achieving long-term budget savings. That department was the “lowest hanging fruit” still available to harvest for savings, she said. While she has called for departmental changes in the best, she thought the fact that the Council for State Governments was going to make recommendations on prison changes relatively soon would give a new impetus to making the changes needed to meet budget savings.
She emphasized that she would not call for any tax increases in 2009, not even a gas tax increase.
Asked how she would help boost renewal of the state’s roads and bridges, Granholm said that she has backed taking the state fuel cuts off a flat rate per gallon to a floating rate, so long as the change did not result in an immediate tax increase.
But she wasn’t sure that tax changes would be needed immediately to boost funding for road and bridge repair and construction. She said there were indications from the incoming Obama administration that an economic stimulus plan would include significant funding for a whole array of public construction projects, that would include assisting schools as much as much as roads and bridges.
Because all the states are facing economic difficulties, the states have urged the federal government to issue the funds without corresponding requirements for increased match funding, she said.
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