Detroit-ification of Michigan

Granholm's Tax Warning


Michigan is now in the 18th month of a state-wide recession, and the unemployment rate of 6.9% remains far above the national rate of 5%. Ms. Granholm blames the nationwide mortgage meltdown and higher energy prices for the job losses and disappearing revenues, but this Great Lakes state is in its own unique hole. Nearby Illinois (5.4% jobless rate) and even Ohio (5.6%) are doing better.

Leon Drolet, the head of the Michigan Taxpayers Alliance, complains that "we are witnessing the Detroit-ification of Michigan." By that he means that the same high tax and spend policies that have hollowed out the Motor City are now infecting many other areas of the state.

The tax hikes have done nothing but accelerate the departures of families and businesses. Michigan ranks fourth of the 50 states in declining home values, and these days about two families leave for every family that moves in. Making matters worse is that property taxes are continuing to rise by the rate of overall inflation, while home values fall. Michigan natives grumble that the only reason more people aren't blazing a path out of the state is they can't sell their homes. Research by former Comerica economist David Littmann finds that about the only industry still growing in Michigan is government. Ms. Granholm's $44.8 billion budget this year further fattened agency payrolls.

There's another national lesson from the Granholm tax dud. If Democrats believe that anger over the economy and high gas prices have put voters in a receptive mood for higher taxes, they should visit the Wolverine State.

Comment: We have strong connections to Michigan: Mom and Pop Peet are from Michigan, we lived there for 2 years while I was in seminary, and we have many relatives there. The last time we visited, it is clear it is a state in decline!


  1. "Making matters worse is that property taxes are continuing to rise by the rate of overall inflation, while home values fall."

    Interesting nexus of this article and another one you posted the same time about printing your own Monopoly money. What really is inflation? Is it higher prices like everyone seems to think? Not really. Inflation is really an increase in the money supply - basically nothing more or less than that. Higher prices are simply a symptom of inflation, not the definition or the cause of it. Yes, the Federal Reserve can print it's way out of a financial jam, but somewhere along the line history seems to show that a day of reckoning must come.

  2. My in-laws live SW of Lansing, and it's always sad to go into Michigan--it's like you cross the border, and the standard of living immediately drops.

    Not that where I grew up is that much better--NW Indiana is plagued by a lot of the same things; high taxes, liberal politicians, union mentalities, and so on. You would think that eventually people would catch on that these things don't exactly result in prosperity.

    No such luck


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