September 27, 2007 (LPAC)--On Monday, Oct. 1, parts of the Michigan state government will be closed if lawmakers and Governor Jennifer Granholm (D) fail to reach agreement on contingency arrangements in the absence of a state budget for FY 2008. Michigan's new fiscal year begins on Oct. 1, and so far there is no resolution. Frantic, closed-door sessions have been proceeding this morning; Granholm has announced that she will give a live address at 6:06 p.m. today, if the negotiations fail to produce a resolution.
The immediate issue is that Michigan faces a $1.75 billion projected budget shortfall, while its constitution requires a balanced budget in order to allow the state government to spend money. Granholm's administration has already identified a hit list for what could be closed, including state parks, Secretary of State offices, and state liquor stores, as well as gambling operations in the casinos and lotteries.
On the surface level, the legislative battle has been over raising taxes or not. The Republican State Senate Majority Leader Mike Bishop (R-Rochester) is demanding cuts and what he calls "reforms" in spending, not raising taxes. Granholm and lawmakers on the Democratic side, who control the lower chamber, have various proposals to increase taxes.
On the deeper level of the underlying condition of the economy, the Mid-West agro-industrial sectors have been so de-structured in recent years, that the tax base itself and government functioning are in question. The home foreclosure crisis is spreading throughout the state. The Detroit/Livonia/Dearborn metropolitan area ranks number two in the nation for home foreclosure filings, with a rate of one in every 29 homes as of August 2007. Elsewhere in the state, the Warren/Farmington Hills/Troy area has one foreclosure filing for every 80 homes--ranking it 25th nationally.
The LaRouche Youth Movement has been in Lansing, circulating the LPAC Federal draft legislation, "Homeowners and Bank Protection Act," as the urgent emergency approach for a firewall to protect citizens, while the credit system and economy is re-started through an economic recovery plan. The LPAC "Economic Recovery Act of 2007" lays out re-storing the auto-machine tool-heavy industry capacity of this very region.
