Jennifer Granholm

Susan J. Demas: Snyder, Trump Loom Large in 2018 Election

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Rick Snyder is the eighth-most unpopular governor in the country. President Donald Trump’s approval ratings hang below 40 percent in Michigan.

And yet plenty of Republicans seem to be in denial about what an albatross these leaders could be in the 2018 election — which is now just nine months away.

It’s not completely unexpected. Michigan voters tend to tire of the party that’s been in power for awhile. The GOP has run the state since 2011 and has had total control of Washington since 2017.

And 2018 doesn’t seem to dissimilar to the 2010 election, which was a referendum on a term-limited governor and new president, who were both Democrats. In that case, Jennifer Granholm was less popular than Snyder is, but Barack Obama fared better than Trump in Michigan.

Republicans ended up winning it all in ‘10: the governorship, attorney general and secretary of state, as well as majorities in the congressional delegation, state House, state Senate and state Supreme Court.

Now things don’t look quite that rosy for Democrats in ‘18 (for one thing, the GOP’s mad redistricting skillz mean big advantages in legislative and congressional districts). But the Dems are certainly better positioned for gains than they have been since 2012, when Obama won re-election and carried the state by 9.5 points.

Trump-supporting conservatives can’t get over that the first Republican to win Michigan in 28 years could now be a drag on the party. He’s fired up the base and helped the GOP make gains in key areas like Macomb County and the Upper Peninsula. And to be honest, many hardcore Trumpers live in a Fox News-Breitbart-InfoWars bubble where the president is always winning, no matter what the polls say or how many people from his campaign are indicted.

But in politics, a couple years can be a lifetime. Obama won Michigan by 16 points in 2008, but his party went down in flames in the 2010 midterms. Trump only triumphed in Michigan by roughly 10,000 votes in 2016, so it’s not really unimaginable that the GOP gets wrecked this year.

Meanwhile, many establishment Republicans aren’t shedding too many tears over Trump’s stumbling. But it’s another story when it comes to Snyder, our CPA governor who made most of their business tax-cutting dreams come true.

Plenty of Michigan Republicans are deeply in denial that Snyder could be in the same role as his predecessor was during the 2010 election. After all, Michigan’s unemployment rate is 4.7 percent, down from 13.9 percent at the same time in the 2010 cycle. It’s obvious that Granholm was terrible for the economy and Snyder ushered in “Michigan’s comeback.”

But it would seem that voters aren’t quite buying the hype. Snyder is less popular than other Great Lakes GOP governors also elected in 2010, like Ohio’s John Kasich and Wisconsin’s Scott Walker. And the Detroit News’ latest polling shows 35 percent think Michigan is doing better than in 2010, 33 percent say it’s the same and 26 percent say it’s worse.

News editorial page Editor Nolan Finley seemed positively flabbergasted at Michiganders’ ungrateful response: “Just one-third recognize the remarkable progress Michigan has made during that period. In Detroit, the city Snyder saved, three-quarters think he’s done a terrible job. How could that be?”

Well, let’s start with the economy. Michigan has certainly rebounded from the Great Recession. But who gets credit? It’s been awhile since I’ve seen that question asked. It’s probably worth considering that Obama has polled better in Michigan than Trump or Snyder. In the city of Detroit, Obama and Detroit Mayor Mike Duggan fare far better than any Republican.

It’s also true that the the recovery hasn’t been even and people tend to gauge progress based on what’s going on in their own lives. The recession hung on in some corners of Michigan until 2013. From 2010 to 2014, the U.S. Census shows poverty shot up 17 percent and median household income dropped 8.7 percent. In 2017, Michigan only added 44,000 jobs (half of our 2016 total) and real disposable income only grew .8 percent.

Attorney General Bill Schuette, the GOP frontrunner to succeed Snyder, has identified another reason some Michiganders might be anxious. Many of us are actually paying more in taxes now than we did under Granholm (though Schuette is still using her as the boogeyman). Snyder’s ballyhooed corporate tax cut in 2011 was partially paid for by $1.4 billion in individual tax increases. So Schuette has made tax cuts the centerpiece of his campaign.

There’s also far more to running a state than just the economy. Snyder burned through a lot of goodwill when he cut education funding early on, gave in on Right to Work, signed anti-LGBT adoption legislation and dragged his feet in helping thousands of people falsely accused of unemployment fraud.

And then, of course, there’s Flint.

Finley scoffed that Granholm “had no clue how to manage a crisis. Everything she attempted made things worse.” But you could say the same thing about Snyder’s shameful handling of the Flint water crisis. Twelve people died of Legionnaires’ disease, lead-poisoned water had a “horrifyingly large” effect on fetal deaths and many of the 99,000 people who drank the water are still dealing with the impact of elevated lead levels, especially children.

Snyder waited halfway through his last State of the State address last week to even mention Flint and quickly returned to happy talk about the “comeback.”

You can pretend people don’t notice things like that. You can insist that they’re misguided or too stupid to realize how awesome things are now. But good luck winning elections that way.  

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Michigan Republicans Face Landmines with Trump Tax Hike

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Right before Christmas, President Trump signed a Republican tax bill that will raise taxes in Michigan by about $1.5 billion every year.

That’s because the law eliminates the personal exemption, which is $4,000 in Michigan. It’s true that blue states like California and New York have been gouged the most by the plan. That’s by design, as even The Hill declares that red states are using blue states “as their new piggy bank in the GOP Congress.”

But sadly, even newly minted Trump states like Michigan weren’t spared in the tax bill. So that’s left GOP Gov. Rick Snyder and the Republican-controlled Legislature to scramble to fix what the feds have done.

It’s somewhat unusual for Michigan Republicans to try and reverse their Republican brethren in Washington, but it’s a political necessity. The bill has consistently been unpopular, with a majority firmly opposed in several polls. The fact that the Senate rammed it through in the dead of night with handwritten changes scratched in the margins probably didn’t help. (Remember Republicans’ adorable cries of “Read the bill!” during the Obamacare debate?)

Arguing that people aren’t particularly swift and don’t get it probably isn’t a winning argument for the GOP in an election year.

But Republicans — particularly gubernatorial candidates Lt. Gov. Brian Calley and Attorney General Bill Schuette — have to do a lambada-like dance around the fact that their proposals are fixing what Trump has done.

Because if there’s one thing we know about the Trump voters needed to win the August GOP primary, it’s that they don’t take kindly to questioning anything that Dear Leader does. No matter how many times the president erratically speaks, threatens nuclear war over Twitter, or tries to meddle in the federal investigation into his campaign’s ties to Russia, the Trump diehards still support him, as we know from the countless media sojourns into flyover country. (The pro-Trump Michigan Conservative Coalition even deploys a Trump lookalike to cultishly trot around events around the state, which is definitely not weird).

On the surface, the tax fix shouldn’t be hard for Snyder, who refused to endorse Trump. But his No. 1 mission to salvage his badly damaged legacy after the Flint water crisis is to get Calley elected. And nobody is going to win a GOP primary by taking on Trump.

So while proposing his plan to restore the personal exemption in Michigan, Snyder made some references to Congress but has carefully tried to avoid the “T-word.” His treasurer, Nick Khouri, gave an assist by arguing that the exemption elimination was an “unintended consequence” of the GOP tax bill.

Snyder’s proposal is simple and makes some economic sense. But the politics are always trickier, so he’s sweetening the deal by increasing the exemption to $4,500 in 2021. That way, the GOP can bill it as a tax cut. And conveniently, any hit to the state budget will be a problem for the next governor and Legislature to solve.

Meanwhile, Schuette, who has won Trump’s endorsement and has sought to tie himself to the president’s hip, is taking the D.C. tax plan lemon and trying to make lemonade.

The centerpiece of Schuette’s campaign is that he’ll kill the Jennifer Granholm income tax hike. A few quick facts: The Democrat hasn’t been governor since 2010 and the tax increase passed the GOP-led Senate during her tenure. Furthermore, Michigan has had a Republican governor and Legislature for the last seven years. Instead of killing the income tax, they enacted in 2011 a $1.4 billion tax hike on individuals to help pay for an almost $2 billion corporate tax cut.

The Trump tax plan would seem to put Schuette in a bind and undermine his core message. But never underestimate the AG’s political skill.

First, he blithely celebrated Republicans for cutting taxes at the federal level. Then he pivoted by calling for Michigan Republicans to “finally eliminate the Granholm income tax increase.”

It’s a pretty ingenious play. Schuette doesn’t just manage to avoid criticizing Trump and congressional Republicans for their tax hike on Michigan. He actually turns this political liability into an opportunity to return to his campaign message of bashing the Granholm boogeyman. This strategy, of course, ignores objective reality, but Schuette benefits from an environment where many reporters fret that they’ll be accused of bias just for performing the simple act of fact-checking.

Schuette proposes rolling back the state income tax from 4.25 percent to 3.9 percent, which Khouri pointed out would disproportionately favor the wealthy (on top of what the congressional tax bill already did). Naturally, Schuette’s GOP allies in the Legislature think that’s a fine idea.

It seems clear that the tax cleanup debate will devolve into a proxy war between Calley and Schuette. So we can probably expect that politics will trump good policy.

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Michigan Becomes the Model for Washington Whiffing on Tax Cuts

“Well, at least I’ll get a tax cut.”

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This was the common refrain I heard on the campaign trail last year from reluctant Donald Trump supporters, those who tended to live in the suburbs and wouldn’t be caught dead in a cheesy red #MAGA hat.

They were uncomfortable with the “Access Hollywood” tape in which Trump bragged about sexually assaulting women and didn’t care for his racialized language, particularly about immigration (which only hardline conservatives care about in Michigan, a state that’s had little population growth in decades).

But a tax cut sure sounded appealing, especially since millions of Michigan families are actually paying more taxes now after seven years of Gov. Rick Snyder and Republican rule in the Legislature.

Yes, you’d never know it by listening to GOP gubernatorial candidate Bill Schuette’s ads, but it’s true. The attorney general casts former Gov. Jennifer Granholm as the liberal supervillain who singlehandedly raised your taxes a decade ago (somehow forgetting she struck a deal with the GOP Senate to end a government shutdown).

Schuette also manages to overlook that Republicans in 2011 raised taxes 23 percent for individuals ($1.4 billion a year) to cut taxes for corporations 83 percent ($1.6 billion). Why is that necessary? Because unlike the feds, states can’t run deficits. So with less money coming into the state from businesses, the shortfall had to be made up somewhere else. So in addition to cutting funds for schools, universities and local governments, Republicans also socked individual ratepayers with higher bills.

Most people assumed they’d be getting a healthy tax cut based on GOP promises (and the decades-long branding campaign of Republicans as the tax-cutting party). So plenty of Michiganders were shocked when they had to pay their first tax bill under the GOP “reform.” Deductions people had counted on for their homes, charitable donations, college tuition, retirement and even their children were gone.

In 2015, Snyder and Republicans hatched a half-baked scheme to fix the roads by raising gas taxes and Secretary of State fees. Tl;dr, Michigan’s roads are still terrible and your taxes shot up even more.

State tax increases have disproportionately hit the poor and middle class, while Michigan’s wage growth and per-capita income have lagged behind most states.

So it makes sense that Michigan voters would be eager for some tax relief from Washington, which is one reason why Trump won the state.

Because Congress doesn’t have to worry about balancing the budget, it’s pretty easy to hand out tax cuts like candy, even if the GOP’s top priority is giving them to the rich. I fully expected Trump and the Republican Congress to follow this playbook and devise a modestly popular tax plan.

But instead, they’ve used the Michigan model of catering to corporations and the wealthy at the explicit expense of the poor and middle class. The $1.5 trillion package speeding through Congress eliminates the alternative minimum tax benefiting those making over $200,000.

And it permanently chops the corporate tax rate from 35 percent to 20 percent (even though big companies already enjoy huge loopholes), while any middle-class tax cuts are temporary.

No wonder a Fortune columnist called the bill the “largest wealth grab in modern history.” Almost 40 percent will pay the same or more taxes out of the gate. Within 10 years, just 16 percent will see a tax cut of $100 a year or more.

Only 36 percent back the tax plan being rushed through Congress at breakneck speed in the latest Politico/Morning Consult poll.

It gets worse with the fine print, as even Trump economic adviser Larry Kudlow admits the plan will “hurt a lot of different people.” That includes 5.2 million seniors, the most reliable GOP voting bloc.

Millions in Michigan and nationwide take the state and local tax deduction (SALT) to offset some of their federal taxes. The Republican tax plan scraps it, which essentially means successful higher-tax blue states will be subsidizing low-tax red states.

You can forget about the student loan deduction, which is the only way millions of middle-class families can afford the exorbitant cost of college these days. The House-passed plan would devastate 145,000 graduate students who would see their tuition waivers taxed as income. In other words, they would have to pay taxes on $35,000 or $50,000, without ever seeing the money, which would likely cause thousands of students to drop out.

And it gets worse, with 13 million losing health insurance by axing Obamacare’s individual mandate. Because the bill is a budget buster estimated to balloon the deficit by $1.5 trillion over the next decade, Republicans are looking to chop Medicare, Social Security and other programs, which will devastate seniors even more.

The argument that making tax cuts so lopsided for corporations and the super-wealthy while leaving almost everyone else behind is that businesses will hire more people.

“Frankly, I think they are bonkers,” David Mendels, former chief executive officer of software firm Brightcove, told Politico. “It really doesn’t work that way. No CEO sits there and says, ‘When my tax rate goes down, I’m going to hire more people and pay them more.’”

But those of us in Michigan already knew that.  

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Republicans Would Like You To Kindly Forget They’ve Raised Your Taxes

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History, as we all know, is written by the winners. And in Michigan, Republicans have been on a nearly seven-year winning streak, controlling all three branches of state government.

So Republicans, led by Attorney General Bill Schuette, the likely 2018 gubernatorial nominee, have been spinning a pretty convincing horror story about the diabolical Democratic Gov. Jennifer Granholm tax hikes a decade ago. The only way to destroy them is to elect Schuette and Republicans next year, of course.

This is a very smooth talking point. Plenty of people will believe it just because everyone knows Democrats are tax ‘n’ spend fiends while Republicans despise taxes more than venereal disease.

There are just three big facts that annihilate this premise: The 2007 tax hikes were a bipartisan affair; Republicans under Gov. Rick Snyder raised taxes even more in 2011 and again in 2015; and the GOP has been in power for seven years and could have chopped your tax bill at any time.

If any of this is news to you, that may be because most of Michigan’s political reporters didn’t cover the ‘07 theatrics and plenty weren’t even there for Snyder’s ‘11 tax hikes. Most lawmakers from those sessions have been term-limited and even many knowledgeable staffers have departed the Capitol.

But facts are stubborn things and shouldn’t be forgotten. And as someone who has been around for all of this tax drama, I’ll volunteer to be the annoying voice of intellectual honesty.

Let’s start in 2007, a frenzied time of a short-lived government shutdown and all-night sessions when lawmakers (and even a few reporters) were reduced to sleeping on the Capitol floor. Michigan was dead broke, thanks to a recession that actually started on the watch of GOP then-Gov. John Engler.

Granholm struck a deal with then-Senate Majority Leader Mike Bishop (R-Rochester) to temporarily raise the state income tax from 3.9 percent to 4.35 percent. As the Senate was GOP-controlled, the plan had to have R votes to pass, and it did. So Bishop, now a congressman, can truthfully state he wasn’t one of them, but he certainly did sign off on the tax hike deal.

They also made a mess of the sales tax and eventually fixed it with a Michigan Business Tax (MBT) surcharge. Fun times.

So when Snyder was elected three years later, the Republican’s first order of business was to slay the MBT. Most economists agreed it was a terribly structured tax, so that was all well and good, but Snyder’s plan for a $2 billion corporate tax cut did have a rather big problem.

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You see, unlike the federal government, Michigan can’t run a deficit. So in order to make up for the $2 billion hit to the state budget, Snyder proposed budget cuts and — get this — a $1.4 billion tax increase on individuals. The income tax stayed locked at 4.35 percent the first year and then would stick at 4.25 percent.

But the real hit to taxpayers’ wallets was getting rid of tax deductions for basic things like owning a home, having kids, donating to charity, saving for retirement, and paying for kids’ college. Suddenly, plenty of people used to receiving tax refunds in April were socked with bills for thousands of dollars.

That was fun, too.

But because Snyder and Republicans weren’t ready to quit their tax-hike addiction, they followed all that up in 2015 with the first gas tax hike in 20 years. By upping the tax from 19 cents to 26.3 cents, Michigan vaulted into the top five states, per the nonpartisan Tax Foundation.

In return, we were supposed to get better roads and bridges. Now maybe you’ve met someone who thinks they’re driving on fewer potholes now; I’ve yet to interview anyone who does.

Since Jan. 1, 2011, we’ve had a GOP governor, House, Senate and Supreme Court. The GOP could have cut taxes for folks at any time. But even this winter, the Republican-led House failed to pass an income tax cut.

Now Schuette wants us to believe that Democrats somehow are to blame for all these tax hikes and only electing Republicans in ‘18 can save us.

Republicans have failed to protect taxpayers time and time again in the last decade. That’s their record. They can’t rewrite history.

If they want us to believe that things will be different this time around, they should have to answer for their record.

But they’re probably banking on a weakened and neophyte media and a demoralized Democratic Party to save them from tough questions. And to be honest, that’s not a bad bet to make.

Susan J. Demas is Publisher and Editor of Inside Michigan Politics, a nationally acclaimed, biweekly political newsletter. Her political columns can be found at SusanJDemas.com. Follow her on Twitter here.

Susan J. Demas: Republicans primed to raise taxes, Tea Party doesn't care

Lesson learned. The only time raising taxes is bad is when Democrats are in power.

 

That's really the only takeaway you can have from the utterly pathetic Tea Party Tax Day rally Thursday at the Capitol. Only 300 folks bothered to show up, in spite of the fact that Republican Gov. Rick Snyder has proposed far bigger tax hikes that Jennifer Granholm every dreamed of.

 

Not even Fox News superstar Dick Morris (best known for hating on Hillary Clinton and sucking hookers' toes) and GOP presidential hopeful Herman Cain (best known for pledging never to hire any Muslims in the White House) could turn angry right-wingers out.

 

Nor could Secretary of State Ruth Johnson and Attorney General Bill Schuette.

Days before, organizers at Americans for Prosperity were feverishly downplaying expectations, as is the norm for staged political events, not outpourings of grassroots furor. Michigan Director Scott Hagerstrom estimated about 1,000, maybe 1,500 would show.

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Susan J. Demas: Leave a legacy, Gov. Granholm

The worst kept secret in Lansing this year has been how much Jennifer Granholm wanted to skip town -- and how badly folks from both parties were dying for her to do just that.

After the governor was named to Barack Obama's economic transition team, most of Lansing's chattering class considered her a lock for a cabinet post. Evidently, the New York Times was convinced enough to run a cover story and all the networks came calling.

Around the corridors of the Capitol, Democrats could be seen crossing their fingers that the governor's name would be announced. And Republicans grumbled that although she certainly wasn't qualified for Labor or Energy Secretary, Granholm could sell anything.

The general sentiment among legislators was that they'd love to spend the next two years working with Lt. Gov. John Cherry, especially with the sorry shape the budget's in. And Democrats relished the idea of him waltzing into the 2010 election as an incumbent.

Read more.