Michigan Ag Connection - Granholm Hits Mark in Streamlining, But Disregards Ag Successes

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Granholm Hits Mark in Streamlining, But Disregards Ag Successes
Michigan Ag Connection - 02/08/2010

Michigan Farm Bureau (MFB) members do agree with Gov. Jennifer Granholm that Michigan's "budget process is broken" and the state "must do better."

As Granholm said in her State of the State address Wednesday evening, "the old Michigan economy is gone," and fixing Michigan's broken budget demands "urgency, common sense and courage" on the part of elected leaders. These are some of the same conclusions reached by MFB's Government Streamlining Committee.

But Granholm missed an opportunity to highlight the agriculture industry's vital role in helping Michigan stay afloat during these difficult economic times - and the even greater role the industry will play in Michigan's comeback, said President Wayne H. Wood. And she didn't go far enough in proposing reforms that reflect where state cuts must be made, namely three major areas: corrections, human services and education.

Where the Governor got it right

Granholm did hit the nail on the head in her call to "streamline state government and reduce its cost," said Wood.

The MFB Government Streamlining Committee was probably most surprised to learn that 86 percent of Michigan's general fund is currently spent on corrections, human services and education. So unless major reforms are made to these areas, cuts to other state departments will have little to no effect on the bottom line. In fact, the state could eliminate every other department outside of corrections, human services and education and still not have enough money to solve the state's $1.8 billion budget deficit.

"If you eliminate every other state department outside of corrections, human services and education, you'd only shore up enough money to operate the state for less than two months. The administration and Legislature must concentrate on the 86 percent which represents the biggest and costliest chunk of the pie. Otherwise, they're just spinning their wheels and not getting to the heart of the major spending areas," said Wood.

Just what those reforms should look like is less certain.

"The Michigan Farm Bureau does not claim to have all the answers on how best to streamline state government, and we're not naïve to think there's a silver bullet," said Wood. "But we do know that Michigan's spending is based on a manufacturing economy that no longer exists. The current situation is unsustainable and demands major reform and restructuring in how the state spends money."

Where the Governor missed

Despite being the state's second largest industry and one of the clear growth sectors, agriculture was only mentioned once in Granholm's address.

The agri-food, agri-energy and supporting businesses collectively contribute $71.3 billion to Michigan's economy annually and employ 1 million Michigan residents, roughly a quarter of the state's work force. In fact, agriculture has been growing at a rate five times faster than the growth rate of Michigan's general economy.

"We appreciate Governor Granholm recognizing Michigan's 'diverse agriculture' as a unique attribute that gives the state a competitive advantage, but we were disappointed that agriculture was left out of the business success stories she shared from around the state," said Wood.

"Agriculture generally doesn't have the glitzy ribbon-cutting and groundbreaking ceremonies like some other business sectors, but everyday people are investing in their farms, employing their family members and neighbors, and diversifying their product offerings to provide a better future for their family, local community and the state as a whole."

Even in Granholm's call for the Legislature to fund Pure Michigan tourism advertising, she referred to "hotels, restaurants, ski resorts and golf courses" but overlooked the booming agritourism sector which continues to gain popularity as the "buy local food/support local farms" movement gains traction.

At one point, Granholm focused on the "clean-energy sector" of Michigan's economy - one of six "new" economic sectors she identified.

"In talking about the 'clean-energy sector' the Governor mentioned taking Michigan 'from the rust belt to the green belt,' but I'd argue Michigan already has a 'green belt;' it's called agriculture," said Wood. "Agriculture has been Michigan's green belt from the state's beginning and will continue this legacy with proper support from state government."

Looking forward

MFB looks forward to seeing the details of Granholm's budget proposal next week. In the meantime, the organization has been reviewing the many reform proposals brought forth by coalitions representing a variety of business sectors, and encourages the administration and Legislature to also give these plans close thought and consideration as they have many ideas in common for moving Michigan forward.

From MFB's standpoint, one thing is certain. The organization must expand its scope of concern and look beyond agriculture to every other arm of state government, including corrections, human services and education, said Wood.

"It's imperative that Michigan look for increased efficiencies in government, prioritize cuts, reform where possible and increase taxes or fees as a last option," he said.