Thank you for providing this opportunity to address Right Michigan.  I appreciate your work and dedication.

First week back after the Democrats decision to take a little two week siesta in the middle of a budget crisis.  Readjusted?

Readjustment was not necessary.  I remained in district or in Lansing during the last two weeks, going door to door and meeting with constituents in Livonia or using the time in Lansing to more thoroughly prepare for our upcoming budget discussions.  Our budget is complex, hemorrhaging a loss of $5 million a day, and the $7 billion in stimulus funding headed Michigan's way is full of strings and requirements that have the potential of creating ongoing funding requirements that we can't support.  Individually and as a member of the House Republican caucus, I wish to be as prepared as possible as we progress with the budget.

We cannot spend our way out of the structural deficit Michigan has been battling since 2001.  A massive cut in government spending is required, so massive every citizen will feel some pain in the level of service provided by the state, a regrettable necessity that has been deferred for far too long.  If done now, and correctly, I believe we can place Michigan on a sustainable road to recovery.

That'd be a switch.  And I know you've been hard at work.  I wanted to ask about an issue you were discussing earlier this month, because its something that I think a lot of our readers are passionate about on a variety of fronts.

You worked hard to help move House Bill 4515 which expands a tax credit to businesses who manufacture battery cells.

I guess, first of all, why was it important to take such a big, leading roll on this issue?

Michigan's experienced business community and labor force, as well as its infrastructure and educational system, make the state ideal for hosting the design and manufacture of fuel cells.

The incentives provide additional reason for companies to invest in a state that presently has a higher cost of doing business.  While I would prefer to work on lowering the tax and regulatory burden, we do not have the luxury of time when it comes to the rapidly consolidating automotive industry.  From a national perspective, I am quite supportive of efforts taken to assure that the U.S. gains greater control over energy technologies.  I don't want to complain about foreign dominance in cell technology 15 years from now.

Now, there's a flip side to HB4515, too.  Essentially, the MEDC, you, the legislature and the governor, you're picking winners and losers, aren't you?

You are right, and the downside of any incentive or selectively favorable regulation is the government can find itself in the business of picking winners and losers.  But there are justifications, as I stated previously, when the timing or need is so critical that we are, as a legislature, willing to grant incentives.  Based on my experience in business, law, and government, I believe that even if Michigan had the best tax and regulatory structure, incentives would, from time to time, be required to compete against other States and other nations that use incentives to lure businesses to their environs.  Many industries understand a fine working environment when they find it, but can still be persuaded by the "shining object" offered by another State or nation.

Everything tends to circle back to jobs these days, doesn't it?  Or at least, folks in Lansing on both sides of the aisle claim they're all about jobs.  But if tax breaks lead to job retention and creation, and if those new jobs lead to additional economic activity and tax revenue, why does the House continue to stonewall the overwhelmingly bipartisan Senate Bill 1 which eliminates the MBT surcharge?

An intriguing and perceptive question.  Our government enterprise has, regrettably, grown dependent upon any and all tax income in the absence of meaningful budget cuts.  I have co-sponsored legislation in the house to eliminate the MBT surcharge, without replacement revenues, because I believe we can and must do better when spending taxpayer money.  I receive input from Livonia citizens and business that the surcharge is driving them out of business and/or out of this state.  That means fewer jobs for our citizens.  In a more general sense, I have found a disconnect in the understanding by some Democrats serving in the house that higher taxes can only mean less jobs.

Of course, no matter how Lansing addresses the tax climate, there will be at least a short term need to make some budget cuts to balance the books.  You've already earned a reputation in the caucus for how seriously you take fiscal responsibility.

Where can we find taxpayer savings?

The legislature shouldn't even consider a tax increase of any kind until we have reformed our government and its spending habits to a responsible and productive size reflecting the State of Michigan in its present condition.  The use of one time stimulus funds to paper over a deficit, or an increase in taxes, only rewards poor decisions and bad spending habits.

That being said, the House Republican Caucus has identified more than $400 million in savings, and we're still working to find more.  A 5% reduction in salaries paid to the thousands of individuals employed by the State would create a significant savings, and reflect the reality that many of our citizens have faced in the private sector.  We've voted to cut elected official pay by 10% to help with the budget and to provide the governor with an example of leadership as the administration negotiates with state employees.  Changes in the prison sentencing guidelines for non-violent offenders and the privatization of services in the Department of Corrections can generate in excess of $200 million in savings.  These are just two examples.  And while there is nothing pleasant in the reduction of pay or a change in services delivered, the changes are absolutely necessary.

Could government transparency play into that goal?  And if so, how?

Transparency will certainly play a roll, regardless of the number of citizens that may or may not take advantage of information that could be easily available to them because decision makers will, I think, behave in a more responsible fashion when the opportunity for verification exists in the citizenry.  In addition to holding public servants more accountable, transparency can also provide those very same servants with verifiable justifications for the difficult decisions we sometimes have to make.  I have found that even the most objectionable vote can be accepted as necessary when citizens truly understand the issues at hand.  Moreover, citizens may well have suggestions that can help with a particular matter once the details are made available to them.  I never underestimate the intelligence, creativity, or commitment of our citizens.

Would certainly seem to play into the Democrats' stated goal of focusing only on the budget.  Interesting, though, that they're also working on repealing Michigan's FDA defense laws.  Empowering trial lawyers and forcing life science jobs out of the state doesn't seem like a particularly good or relevant way to balance the budget but maybe I'm missing something?

You've missed nothing in your statement.  The budget should be priority one, and our failure to remain focused will cause unnecessary strain and, perhaps, misunderstanding, later in our session.  That being said, we do have the capacity to fulfill numerous responsibilities as legislators, both with regard to various bills as well as working with our constituents.  The budget is a huge issue, but our responsibilities do not end there and we must continue working on other matters of importance to our citizens, our state and our districts.  What is important to the 19th District and its citizens may have absolutely no importance elsewhere, but my efforts should continue.   Again, I think we have the capacity to handle the budget and our various other responsibilities, but remain concerned that the attention House Democrats have thus far paid to the budget has been negligent.

I think we've just about covered the big issues you guys are facing in the House.  What are you hearing and what sort of issues are on the minds of your constituents back in Livonia?

Livonia citizens are concerned about the economy and the future of our state, no doubt about it.  Thankfully, Livonia has a tradition of good management, and boasts an unemployment rate far below the State's.  Lessons learned from the citizens and the municipal government of only spending what you have, assuring value for every dollar spent, and preparing for the future, are lessons I hope to apply as a legislator.

Is there anything else you'd like to cover before I let you go?

Again, thank you for your time.  While certainly elected by the citizens of Livonia, I do wish to remind everyone that I represent all citizens of this great state, and remain open to their contact.  While mired in a troublesome time on so many fronts, let's not forget that we remain one of the most resource rich and beautiful states in the U.S., with talented and hard-working employees and brave entrepreneurs.  If we focus on that, and the government provides a stable and promising environment for citizens and business, we can make Michigan even better than its successful past.

Representative Walsh, thanks again for taking the time!