Skip to comments.Michigan must decide if it wants an extreme makeover
Posted on 01/29/2007 8:45:01 AM PST by Incorrigible
By PETER LUKE
LANSING, Mich. Michigan could use a big gulp of Zoloft, given last week's depressing announcement from Pfizer Inc. that it's following up its 2003 slashing of research operations in Kalamazoo by doing much the same in Ann Arbor.
The good news is that the anti-depressant is a lot cheaper now that Pfizer's patent on Zoloft expired on June 30. So there will be plenty of generic sertraline to go around in these shaky economic times.
Of course the times are shaky in part because Pfizer's U.S. sales of Zoloft plunged 88 percent between fourth-quarter 2006 and fourth-quarter 2005, from $653 million to $76 million, once the less expensive generic became available.
Still, for consumers the money saved by buying generic can go toward the purchase of a new Frigidaire refrigerator. Those should be cheaper, too, since they're no longer assembled in Greenville, but in Mexico.
Greenville and Ann Arbor don't have a lot in common, but now, to use Gov. Jennifer Granholm's phrase last week, they've both been "punched in the gut.'' No one is really exempt from what's happening, whether you're a high school graduate assembling freezer compartments or a university graduate crafting drug therapies.
And it's not going to stop. What's going on is economic change wrought by global-scale corporate decision-making.
The short-term response to the Pfizer announcement has to include state funding to support the viable business plans of pharmaceutical researchers who want to stay in Ann Arbor. The state did much the same in 2003 when it pumped $10 million into a new life sciences incubator at Western Michigan University after Pfizer scaled back research operations in Kalamazoo.
The money is available, through new venture capital, loan and grant programs of the 21st Century Jobs Fund, which will receive a fresh $75 million infusion of cash in fiscal 2008.
Now what to do in the long term?
The Pfizer decision is the latest reminder that the state, once and for all, has to settle on an economic strategy. State government can't reshape the state's economy. What it can do is decide how to address seven continuous years of net job loss.
Should Michigan be a low-tax, low-service state, as it's becoming? Or should its tax levels be marginally above the national average to fund the state services the public says it wants? That's the debate that has consumed Michigan politics for years, and it's about to be refreshed.
Michigan job losses commenced a year into an eight-year stretch of cuts in the state's two main taxes on income and business. Those tax cuts, according to the House Fiscal Agency, will cost the state some $1.3 billion in the current fiscal year. Tax cuts didn't cause the job loss. They didn't stop them either.
Now some Republicans are actively arguing that the Single Business Tax, which they eliminated last year and for which they have yet to offer a replacement, shouldn't be fully replaced. Do nothing and the tax cut would cost more than $1.2 billion next year.
Well, it will be replaced or lawmakers will have to start closing prisons, or universities. Take your pick. A post-election K-12 budget shortfall that could more than wipe out the pre-election funding increase for schools has been greeted largely with silence. Some say transfer the money from somewhere else. From where? Who knows?
What kind of state decides to cut its education budgets when work-force development is widely seen as the most critical step to securing its economic future?
What kind of state, moreover, seeks to attract business when for more than a year, it hasn't been able to tell those businesses what their tax liability would be because the Legislature voted to eliminate the main business tax without identifying a replacement?
What kind of state can't find the will to raise a gasoline tax that is stagnating in the face of rising costs to rebuild decaying transportation infrastructure presumably an important economic development feature?
If you're scoring at home, the answer to all those questions is: Michigan. You get what you pay for.
(Peter Luke is a columnist for Booth Newspapers. He can be contacted at pluke(at)boothnewspapers.com.)
Not for commercial use. For educational and discussion purposes only.
So the message is: raise taxes!
So this guy really thinks that the reason businesses are fleeing Michigan is because its taxes are too low?
High Taxes and Big Union = destroyed economy
As the Joker would put it, what Michigan needs is an enema.
Since it's the Moo Slime capital of America, I guess it already has.
How on earth can anyone call it a going down the road to a low tax, low service state?
This guy is a crackpot!
That one stumped me also. This writer has never heard of the SBT?
No such thing as 'free drugs'/prescriptions. . .when will they learn. Bite the hand. . .watch it disappear. If the 'hand' feeds too many; it disappears as well. Or the goods become even more expensive; because 'somebody' has to pay here.
He can be contacted at puke!(at)boothnewspapers.com.)
There, fixed it.
"GOOOOOOOOOOOOD MORNING, LANSING!!!"
Brain drain in action. States that were seeing too much of it dropped taxes and brought the businesses to them, works real well too.
Notice the author views tax cuts in terms of what they cost the state rather than tax hikes in terms of what they cost the people.
The problem is that the basis of Michigan's economy (big government, big union, big corporation, big pension) is no longer viable today.
Perhaps eliminating mandatory union membership...
The best thing to ever come out of Michigan is I-75 South!
Michigan has HAD an ongoing enema - it's called DETROIT.
No, Detroit is the thing an enema gets rid of.