Survival of the Disciplined

Michigan’s state government has survived the crisis brought on by depression in the auto industry and emerged from a decade of debt. Democratic Gov. James J. Blanchard declared “Solvency Day,” and sent letters to Wall Street credit-rating specialists certifying the state’s new black-ink status. So, like New York City, Michigan has demonstrated the survival not necessarily of the fittest but of the disciplined.

Discipline, in Michigan’s case, also meant a 38% increase in the state income tax, raising the rate to 6.35%. With the easing of the crunch, this has been scaled back to 5.35% and is scheduled to decline to 5.1% on Dec. 1 with the removal of a debt-reduction surcharge.

Conservatives, of course, did not like the tax increase--first imposed by Republican Gov. William Milliken, one of Michigan’s most popular chief executives, near the end of his third term. They managed to recall two Democratic state senators who voted for higher taxes (giving the GOP a Senate majority), but failed to win a Proposition 13-like tax-limit measure.

Next year’s battle for governor will focus on taxes. Blanchard will argue that he brought the state through crisis and then cut taxes. Opponents will argue that taxes were raised too much and still are too high--although the top income-tax rate still is less than half of California’s, for example.

Others may notice that a Democratic governor supported higher taxes, got his state out of debt and then lowered taxes while a Republican administration in Washington lowered taxes and watched the nation plunge from $1 trillion in debt to $2 trillion, with only dubious prospects for a reversal. We tend to like the Michigan way.