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Parting Shots

By Wm. R. Lowry
Editor & Publisher, MiBiz
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note-able quote

“We are seeing the creation of positive net growth next year — but at a very modest level.”

— George Fulton, Director of the

U-M economics seminar

the trick 4 Rick

The annual state projections from the U-M’s Research Seminar in Quantitative Economics says the dust of the great recession is just now settling for Michigan.

According to their model, the state next year will add 24,500 jobs before the economy starts to gather strength and gain another 63,000 jobs during 2012. The state will nonetheless remain smaller and poorer, having lost nearly 850,000 jobs since 2000.

George Fulton, director of the U-M economics seminar and his forecast co-authors estimate that the state’s unemployment rate still won’t drop out of the double-digits by the end of 2012, when they predict the state’s annual average jobless rate will hit 11.5 percent.

As weak as Michigan’s recovery may be, there would be none without the rapid turnaround in the state’s dominant industry since GM and Chrysler Group filed for bankruptcy last year, Fulton said. The auto manufacturing segment of the state will have added 6,000 jobs between the end of last year and the end of this year. GM announcements in late November pledged another 1,000 engineering positions for the state, and numerous Tier 1 suppliers are again on the grow.

Therein lies the Snyder dilemma. An avid promoter of entrepreneurism and the economic gardening approach to economic development, our new governor will need to resist the temptation many of his predecessors fell victim to across the years — preaching diversification but not leading diversification. The trick for Rick will be to balance economic development funding and activities to foster entrepreneurism while supporting manufacturing growth.

note-able quote

“I congratulate Rick Snyder on his election and have pledged that my administration will help facilitate a smooth transition as he prepares to become Michigan’s 48th governor. My administration stands ready to do everything necessary to ensure that Governor-elect Snyder and his team receive full cooperation and the administrative and technical support necessary to take up the mantle of governance starting January 1.”

— Gov. Jennifer M. Granholm

midnight ride

One very sensitive, yet obvious target in Lansing’s quest to achieve a balanced budget — now that it must do so without the benefit of federal stimulus or tobacco settlement dollars — is the state workforce.

While Governor-elect Rick Snyder has pledged to address this tender topic with compassion and understanding, the elephant in the room is that taxpayers cannot continue to support the current head count, pay rates, benefit costs and pension payouts now showered upon our public employees.

Jennifer Granholm’s parting shot to Michigan, and “welcome aboard” gift to Snyder may well be her midnight appointment of Robert W. Swanson Jr. to the state’s Civil Service Commission for a term beginning January 1 and running through December 2018. A Lansing Democrat and former director of the Department of Labor and Economic Growth, Swanson holds the power to effectively promote the status quo despite a November citizen’s mandate that swept Snyder as well as House and Senate Republican majorities into leadership.

Under the state constitution, the CSC has the responsibility for overseeing the state’s workforce of over 52,000 people. A bipartisan entity, the CSC classifies positions in state classified civil service; fixes rates of compensation; approves or disapproves disbursements for all personal services; determines based on merit, efficiency, and fitness the qualifications of candidates for positions in the classified service; regulates all personnel transactions; and regulates all conditions of employment in the classified service.

By virtue of serving two terms, and with this last minute appointment, Granholm appointees make up the entire four-person CSC. Snyder’s first appointment opportunity will not arrive until the end of 2012.

Snyder has promised “customer oriented” government. To successfully reduce state employee costs and influence how state employees do their work, he will need to win this panel over to his side.

While we should insist on the CSC’s earnest assistance to enact desperately needed reforms, Granholm’s final act of “full cooperation” as she rides off into the night may well stymie the inevitable overhaul in the Capitol City.

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