Mark Hornbeck and Charlie Cain / Detroit News Lansing Bureau
LANSING — Gov. Jennifer Granholm wants to eliminate state funding for the 160-year-old Michigan State Fair, slash elected officials’ pay by 10 percent and slim down state government from 18 departments to eight.
The proposals, to be outlined in her seventh State of the State address Tuesday, underscore the gravity of Michigan’s budget crisis, and the impact of the national recession on this state.
“The governor will say state government can no longer be all things to all people,” Liz Boyd, spokeswoman for Granholm, told The Detroit News. “When the governor says these cuts will be painful, that comes from the heart.”
Lt. Gov. John Cherry will lead a year-long commission charged with reducing the number of state departments in future years, but Granholm will propose scrapping the 226-employee, $52.2 million Department of History, Arts and Libraries this year.
The state faces a $1.6 billion deficit for the budget year beginning Oct. 1, as state revenues dwindle due to the limping economy and a jobless rate of more than 10 percent.
Her short-term reform plan would end all state financing of the Michigan State Fair in Detroit, the nation’s oldest, as well as the Upper Peninsula State Fair in 2010. The State Fair — a showcase for Michigan’s $64 billion agricultural industry — is an agency of the Department of Management and Budget, and is held on state property. It’s supposed to pay for itself, but the state treasury has been covering shortfalls ranging from $50,000 to $1.3 million in recent years. Attendance has dropped 39 percent since 2000 and corporate support also has declined.
The demise of the State Fair would be a bitter pill for many.
“I’ve been going to it all my life,” said Paul Gloomis, 53, of Ferndale.
“I took my three daughters there, year after year. The one thing I have noticed is the prices have steadily gone up, up and up. With increased admission costs it also seems it costs a lot more to go on the rides. What used to cost you only one ticket, now costs two, three or more. It’s hard not to spend a day there without spending $100.”
Linda Lukofsky of Livonia has enjoyed taking her 88-year-old mother to the State Fair in recent years, and has noticed the event has “downsized” considerably.
But eliminating the fair “would be a shame” and a loss for the entire state, she said.
“They even have a Senior Citizens Day which everyone seems to look forward to each year — maybe because they grew up with it,” Lukofsky said. “It may not be the largest state fair in the world, but there is something for everyone and has become a tradition for a lot of families …
“Why is it we seem to eliminate all the things so many of us grew up on? Aren’t some traditions just worth keeping?”
Grounds could be leased
The state will consider leasing or selling the 164-acre State Fairgrounds at Eight Mile and Woodward Avenue in Detroit. The Granholm administration hopes that county fairs and the Michigan State University Agriculture Expo can fill the gap.
“A two-week fair cannot support the 164-acre asset. When you look at the priorities and the tough decisions we’re faced with, the question is, do we want to have clean water run out of faucets and clean air to breathe, or do you provide this form of recreation?” said Lisa Webb Sharpe, director of the Michigan Department of Management and Budget.
State Fair General Manager Steven Jenkins got the news Saturday night.
“I’m super shocked. I’m disappointed. I’m hoping I can work with the governor, the Legislature and the general public to explore options to somehow continue this 160-year tradition,” Jenkins said. “It may not be within state government, but I want to work so Michigan citizens are not deprived of this tradition.”
Pay cuts would save $1.3M
Granholm does not have the authority to slash the pay of elected officials. But by Tuesday, she will ask the panel that sets those salaries — the State Officers Compensation Commission — to cut them by 10 percent this year. These officials would include the governor, lieutenant governor, secretary of state, attorney general, legislators and Supreme Court justices. The earliest the pay cuts could come would be 2011. All told, the savings would total $1.3 million. Like the operating money to be saved by shuttering the State Fair, it’s a small amount that symbolizes the seriousness of Michigan’s situation.
Savings from the salary reductions would grow somewhat, since other judges’ salaries are linked to the Supreme Court jurists’ pay.
The number of departments under the governor’s purview would be cut from 16 to six over the long term, according to her reform plan, but she wouldn’t touch the constitutionally protected attorney general’s office and the secretary of state office.
“Six is a workable number,” Cherry said. “Most departments have their own budget office, purchasing office, personnel office. We intend to collapse some of those duplicative services and save money.”
Cherry said state government has lagged behind global changes and still has a budget built around an industrial society of the 1950s.
“Administrative organization ought to reflect people’s perspective about what our mission is,” he said. “It’s pretty clear the economy and the world have fundamentally changed. We must fundamentally look at how we structure government itself.”
Administration officials couldn’t say how much might be saved, nor how many government employees might find themselves surplus, as duplication of services is eliminated.
The 8-year-old Department of History, Arts and Libraries oversees operation of the State Historical Museum, the Library of Michigan, the Michigan Film Office, the Michigan Council for the Arts & Cultural Affairs and the Mackinac Island State Parks Commission. It’s not clear whether any of those facilities or functions would be eliminated, transferred to other state agencies or financed with private money. Presumably, the film office would stay open, because the state is doing a brisk movie business following the adoption of a 42 percent tax break for production here.
Boyd said there likely will be state layoffs proposed as part of the 2010 fiscal year budget, but she said the administration does not have a number.
“It’s difficult to imagine closing a ($1.6) billion budget hole without layoffs,” she said.
‘We need help’
On CNN’s “State of the Union” show Sunday, Granholm said she is optimistic the proposed federal stimulus package could help reverse Michigan’s severe economic downturn, adding it’s crucial the billions of dollars in U.S. aid come soon. An analysis by Mark Zandi, chief economist for Moody’s Economy.com, concluded the plan “would create over 150,000 jobs” in her state.
“We need help. We need it now,” Granholm said.
Granholm, who was a member of President Obama’s economic advisory council, called his stimulus a sensible mix of programs. “A third (would go) toward making sure people are not being hurt, a third toward investing in job creation and a third towards tax cuts,” she said. “That to me is a good balance.”
Granholm’s televised address on Tuesday will be a “no frills” message and “citizens will not hear the governor sugar-coat the challenges we face,” Boyd said.
Other proposals will include:
• A tuition freeze for state universities and community colleges. Those that hold the line on tuition would get additional money from the federal stimulus package.
• Restraints on residential gas and electric shutoffs. The plan is a reaction to the death of a 93-year-old Bay City man who froze to death when the local municipality dialed back his electric meter. The governor plans to ask the Public Service Commission, which oversees utilities, to issue a statewide moratorium on utility cutoffs and allow recently unemployed customers to pay delinquent utility bills over time.
The governor’s proposals must be approved by the Legislature. Granholm will present her budget blueprint Feb. 12.