At NanoBio Corp., a small Ann Arbor company working on products to treat and prevent serious infections, executives have hired six former Pfizer employees. It has another eight jobs to fill and is interviewing Pfizer workers....

For now, it's too early to say how many workers will stay in the Ann Arbor area or the state. So far, half of the 1,000 employees offered out-of-state job transfers with Pfizer have accepted them, but that number is likely to rise...

And lets not forget the spin-off losses that occur when a company decides it can't do business in Michigan and starts transferring thousands of families out of the state, firing thousands of other.  Sure, the city will lose a lot of tax revenue (though I'm sure they more than made up for it with those 1,000 Google phone bank workers, right?) but the local economy also gets hit with a devastating blow.  Local restaurants, hotels, bowling alleys, bars, quick-lube stations and even dry cleaners feel the pinch.

The Pfizer closure couldn't have arrived at a worse time. Business at (Hick's Cleaners') three stores in the city has dropped 40% over the last five years.

To cope, he's reduced his workforce to 17 employees from as many as 50. And he and his wife now do everything, from pressing clothes to driving trucks.

"We've got to do what we've got to do," he said.

We could go on like this all morning, sadly.  The last numbers nationwide put Michigan again at the bottom of the pack with a 7.1% unemployment rate, the highest in the nation, and with no immediate savior on the horizon.  That's where we are.  Now how does that inform the good people in Lansing and affect what they're looking to do with the upcoming budget deficit?  Depends on which side of the aisle you're sitting on.

There's still lots of talk about reforms and spending cuts but Granholm and Speaker Andy Dillon in the House continue to beat the tax-hike drum.  A $2 billion budget deficit could easily be made up, they reason, by $2 billion in new revenue.  And their friends in the liberal press are starting to accept as a certainty the assumption that they've got the stones and the political capitol to push a massive tax hike through the House and the Senate.  Though one could ask, if Dillon has unanimous support from his caucus, why haven't they voted on a tax increase yet, but I digress.

What the Taxocrats and so many of their reporter friends continue to ignore is the fact that tax increases stagnate economic growth.  

I'm thankful every time I hear an elected official address the problem as it is and not as it appears to be.  Representative Tom Pearce is great at pointing this out (and I've heard him say it more than once)... the issue facing Michigan isn't a budget crunch or a fiscal deficit, it's a stagnant economy.  And the solution isn't going to be found in balancing the books.  That's a necessary step... it controls the bleeding... but the solution is in patching the wound.  In getting this economy moving again.  So it becomes even more important to remember the old axiom, if you want less of something, tax it.  

A tax increase will drive employers out of the state, it'll send retirees scrambling even faster for Florida, it'll push families who're sitting on the edge right over the borders and it'll send the signal to investors and job makers in forty-nine other states that not only is Michigan in the worst economic shape in the nation but it's also the only state where they won't be safe from one fiscal year to the next.  

Bad form.

So what to do?  Well, let's start with what NOT to do.  Great example in the Lansing State Journal this morning.  Don't throw away a $1 (yes, 100 pennies) a year lease on the Michigan State Police Headquarters in East Lansing to move into a new multi-million dollar building a couple miles away.  A new building that'll cost taxpayers $6 million more than the current building.  Is that the right signal to send to investors and job makers and families in the middle of an economic crisis?

Especially when the Governor just tried taking 29 troopers off the street and has now forced MSP to limit mileage for troopers to as little as 40 miles a day?

Pesky details, I know.  And believe me, they aren't getting in the way of the administration's attempts to spin this.  Their latest approach is to paint it in New Deal language.  LSJ reports a Department of Management and Budget official had this to say:

"More importantly in terms of the financial, I think the bigger issue here is the construction jobs in terms of downtown Lansing and stimulating economic growth as well as creating accessibility to government services and decreasing urban sprawl."

(Edward ) Woods (III, DMB) said the project will create 540 jobs during construction. The current building will need at least $16.2 million in repairs over the next several years, he said.

Still, according to a Senate Fiscal Agency analysis using State Budget Office data, the new building will cost the state almost $6 million more over an 11-year period.

Is that what Michigan is reduced to?  Our economic situation is as bleak as the Great Depression?  We're going to go back to solutions from the 1930s?  Why not take 540 folks from the nearest unemployment line and hire them to plant trees or sweep the streets with toothbrushes?  That'll create 540 new jobs and more importantly, in terms of the financial, I think the bigger issue here is that that'll help downtown Lansing by stimulating economic growth and beautifying the city.  I mean, if that's our standard and that's the type of language we're using...

Oh, yeah, we've cut to the bone up there in Lansing.  Can't afford to cut another dollar from the budget.  Except maybe we can.

And the Detroit News hits again on one of the biggest and brightest areas for real substantive change in the way this state does business with taxpayer dollars.  

The Hay Group, a private consulting firm hired by the Legislature, in 2005 proposed putting all school employees in a statewide pool offering a set amount of benefits. It estimated at the time that savings to school districts could rise to more than $400 million a year.

Teacher health care costs are expensive even when compared with those of other public employees. Figures produced by the Hay Group and the state Senate indicate the average insurance cost for a school employee is $11,362, or $2,000 more than the average state worker.

And that $400 million is before addressing the $2,000 per-teacher difference in benefit levels.  There are tens of millions of dollars a year, maybe more, that could be saved by changing those benefits without necessarily even bringing them down to the level of other state employees (alone a fairly generous package).  

Then lets not forget our other options.  Prison privatization, capping welfare at four years for able-bodied adults (we're the only state in the Midwest without a limit and four years would be the most generous limit in the region) and eliminating the office of the first gentleman.  I know, that last one isn't that big a line item but when you're trying to live within your means you start by cutting the peripherals.  Translate the OTFG into household terms... Dan Granholm Mulhern is the cable-TV of Michigan's budget.  Kinda nice to have around if you've got the extra cash, usually going to leave you dumber than before you turned him on, more likely to waste your time than to teach you anything at all and the first thing that has to go when you're scaling back on expenses.

Mix it all together and you've got a budget deficit made even more dangerous by tax-and-spenders whose big-government answer to every problem threatens to devastate the state's economy for Michigan's next generation... assuming their parents stick around.  When you put it in those terms it makes for an exciting week in Lansing, doesn't it?