OK, folks, here's the deal.
From the standpoint of state government finances, we are moving into the worst times in anyone's memory.
Unemployment rates are the highest in the nation and continuing to skyrocket. The jobless rate is at Depression-era levels in Highland Park (29 percent), Pontiac, Flint, Port Huron and Detroit.
Many are holding their breath, waiting to see if Chrysler or General Motors or both declare bankruptcy. Not surprisingly, money flowing into Lansing through tax collections has fallen alarmingly. State government is now looking at a combined deficit over the next two fiscal years of at least $3 billion, and counting.
Normally, that would be cause for despair. But at the same time, it is also Christmas in Lansing. Michigan has just received $18 billion in federal stimulus money. Actually, only $7 billion is in cash; the rest is tax credits.
And while our lawmakers may have their flaws, they are good at spending money, especially money dropped in their laps. Last week, they rushed through a bill authorizing $873 million for road improvements. On Monday, the governor signed a bill authorizing another $1.9 billion in stimulus spending.
Nearly half of that was earmarked for education. The rest was roughly divided four ways: A quarter billion for water and sewer improvements to shore up the state's crumbling infrastructure; another quarter billion, or a little less, for worker retraining programs, like No Child Left Behind, and a similar sum was allocated for weatherization programs meant to help create jobs and save energy; the rest was devoted to community and food assistance programs, plus $48 million for public safety.
Gov. Jennifer Granholm vowed to "move quickly to get these dollars into communities," so that people can be hired and money can start flowing.
Despite Michigan's bitter partisan divisions, there isn't too much controversy about most of this. Both parties agree government ought to fix the state's notoriously pitted and crumbling roads.
But the real stimulus battles lie ahead. The governor and the Legislature have an almost impossible task: plug the enormous and growing deficit gap without seriously damaging Michigan's schools or universities or quality of life.
State budgets, by law, have to be balanced. The books for the fiscal year ending Sept. 30 have a deficit that is now approaching $1 billion. The deficit for the next year is now estimated at double that, and growing. If an auto bankruptcy occurs ...
Finally, last week, State Budget Director Bob Emerson said what many had been thinking, that some stimulus money -- combined with budget cuts -- was going to be needed to cover the deficit.
Republicans, who control the Michigan Senate, earlier had resisted that idea, but now are reluctantly admitting that, yes, some of the stimulus will probably have to be used -- though they still insist that most of the shortfall can be made up with deep budget cuts.
What's likely to happen?
In the end, there will be some spending cuts, to be sure, though three years of scarcity means most of the "fat" was trimmed long ago.
Prison costs remain the one area ripest for reform. Yet human nature being what it is, the odds are that, in the end, the lawmakers, after some quarrelling, will plug as much of the deficits as possible with stimulus funds. While that clearly was not what President Obama intended states do with the money, that almost certainly is what will be done. Cutting spending is hard and painful.
And the stimulus funds are sitting there. That may get Michigan through the next couple years. But eventually, say by 2011, the stimulus money will all be gone, the cupboard will be bare, and the state will be facing yet another sizable deficit.
When that happens -- and it is virtually certain to happen -- lawmakers may finally no longer be able to put off till tomorrow the hard decisions they should have made, long before yesterday.
Smoking Ban Update: Whatever happened to Michigan's smoking ban? Well, both parties agreed this week to put off further consideration till the summer, saying they now needed to concentrate full-time on the economy and state budget matters.
Republicans insist on an all-or-nothing ban. Democrats want an exemption for casinos and cigar bars. Postponing this was opposed by Sen. Ray Basham, D-Taylor, who said lawmakers should be able to work on more than one issue at a time.
After announcing they had no time to deal with this question, lawmakers then took a two-week Easter vacation.
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