By RUSS HARDING
In response to Michigan’s depressed economy and sinking state revenues, Gov. Jennifer Granholm announced in the State of the State address her intent to reduce the number of state agencies from 18 to eight. While the governor’s goal to make government more efficient through department consolidation is laudable, it is likely to achieve little in savings and may make it more difficult for residents and businesses to benefit from timely decisions. Government reorganization seldom addresses the real issues of what functions government should perform. Rearranging the deck chairs of government functions is not the same as reducing or eliminating programs that are not essential to the safety and welfare of Michigan taxpayers.
I spent much of my career trying to make government more efficient as a manager of state natural resource and environmental programs for 35 years in four different states, culminating as director of the Michigan Department of Environmental Quality from its beginning in 1995 through 2002. I have come to the conclusion that while well-intentioned, most of my efforts to bring efficiencies to state government programs were wasted. My basic premise was wrong. While government certainly could be more efficient, what it needs most is downsizing. Eliminating unnecessary government programs is much harder work than shuffling programs between state departments. Perhaps that is why the governor and the Legislature continue to offer stopgap measures such as reorganization rather than real structural reform of state government.
Expanded and new government programs quickly acquire a political constituency that lobbies for their continued existence and often argues that programs need to be larger. These political constituencies vary from businesses that want incentives or subsidies to groups that want the government to support their particular agenda. Once government programs are in place it’s very difficult to get rid of them when they underperform or fail completely to realize their intended goals. That is why as director of a state agency I was often reluctant to accept new federal money that invariably had strings attached to it. The Washington Post reports that a number of banks have refused to accept or are considering giving back federal bailout funds for that very reason.
If the governor wishes to effect meaningful government streamlining and savings, she need look no further than her own stated goal to return the state’s wetlands program to the federal government, which is closer to actual government reform than is her plan to reorganize state departments. Wetland permitting is not a function that the state needs to perform. The federal government does wetland permitting in 48 other states and is capable of performing that function in Michigan. Granholm should stay the course she announced on the wetlands return as she will surely face opposition from special interest groups more interested in their particular cause than the overall good of the state.
Most taxpayers do not care how state government is organized, but they do care about what functions it performs. It is particularly critical that state government lives within its means at all times, but especially during an era of double-digit unemployment (Michigan is now at 12 percent, worst in the nation). It is impossible for Michigan to get its spending in line with projected state revenues without eliminating functions and programs.
While consolidating state departments is not a bad idea, the monetary savings will simply not be enough to balance the books. Relying on one-time federal stimulus dollars that raise expectations will only make the long-term problem worse when those funds disappear.
Granholm should follow the lead of other state governors who have wisely decided not to accept some federal stimulus funds. The time for substantial state restructuring is now. Lawmakers should review every state program to determine if it is essential to the safety and health of Michigan residents, and eliminate those programs that fail to meet these criteria. The alternative to reduced state spending is additional tax increases, which will only depress the state’s economy more. What our byzantine and gargantuan state government needs is a demolition crew, not another interior decorator.
(Russ Harding is director of the Property Rights Network at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland.)