New Midwest Governors, Old Headaches

New faces are occupying the executive offices in Michigan, Wisconsin and Ohio. Beside their party affiliation, Republicans Rick Snyder, Scott Walker and John Kasich share big problems. All are struggling to deal with big budget deficits, high unemployment and keep businesses in their states.

That’s where the similarities end. Each governor has outlined different approaches for dealing with their dilemmas. In a special report for Changing Gears, Rick Pluta of the Michigan Public Radio Network and Karen Kasler of Ohio Public Radio’s Statehouse Bureau took a look for Changing Gears at how new governors. Walker, Snyder and Kasich are spending their first days on the job.

LISTEN TO THE STORIES:

[audio:http://www.changinggears.info/wp-content/uploads/2011/01/CGGovernors.mp3|titles=CGGovernors]


Ohio

Kasich becomes Ohio’s new governor with a huge responsibility – fixing an $8 billion to $10 billion  hole in the state’s $52 billion dollar two-year budget. But the one state official who doesn’t seem worried about that is Kasich himself.

“We’re going to have a balanced budget, and we’re going to have a tax cut because we need it in Ohio,” he said.

Kasich is a former Congressman and was the House budget committee chair in the late 1990s, and he calls himself the architect of the 1997 balanced federal budget. Kasich says he’ll do that in Ohio too, but he also wants to shake up state government. He referenced that in his inaugural address, saying, “Our enemy is the status quo.”

Kasich, was a managing director at the now-defunctWall Street firm Lehman Brothers, wants to replace the state department of development with a 12 member board of executives lured from private business, which will answer to him. Leading that board will be Kasich’s friend and political contributor Mark Kvamme of California-based Sequoia Capital. It provided the financing for Google, YouTube and other high-tech companies.

Kasich wants to streamline regulations on businesses, and he’s joined other Republican governors in asking the federal government for the power to cut state enrollment in Medicaid without losing federal aid. Kasich has cancelled the project to bring back passenger train service to Ohio, forfeiting a $400 million federal grant. But what seems to be getting the most attention is his desire to curb the bargaining power of unions, but that’s only partly for economic reasons.

“My personal philosophy is, I don’t like public employees striking,” Kasich said. “They’ve got good jobs, they’ve got high pay, they’ve got good benefits, a great retirement – what are they striking for?”

Union leaders, see it another way. One of them is Joe Rugola, president of the Ohio AFL-CIO, which includes the union that represents Ohio’s state workers.

“People work for a living and we expect them to be paid only a fair, honest and decent wage for what they do, so we’re going to fight back very hard,” he said.

Kasich’s budget will likely get a warm reception, sinceRepublicans control both the Ohio House and Senate. His budget doesn’t have to be delivered to the legislature till mid-March, but lawmakers say they want to see it – especially Democrats such as Rep. Bob Hagan of Youngstown.

“If he is saying in a campaign speech, and he’s saying the same thing now, then we’re looking for big cuts. We’re looking for privatization of the turnpike, privatization of the prison system. I don’t know what else he wants to do,” Hagan said.

Kasich’s quite a departure from the last few Ohio governors – he’s younger, he’s much more conservative, and he speaks off the cuff – he doesn’t use a teleprompter, and seems to blurt out whatever’s on his mind. Even Kasich calls himself “brash”, but also says he’s an optimist. And he says that’s what it will take to pull Ohio out of this economic crisis.

Wisconsin

Wisconsin has a budget deficit of a little more than $3 billion. That’s smaller than Ohio’s shortfall, but larger than Michigan’s deficit that’s pegged at something approaching $2 billion.

Wisconsin’s Walker says new taxes are out of the question. In fact, he says Wisconsin has to cut taxes to make the state more competitive. Walker has declared Wisconsin in a state of economic emergency and called in the Legislature for a special session to enact a business-friendly plan to balance the budget and attract jobs.

He says that stands as a stark contrast to Illinois, where the Legislature and Democratic Governor Pat Quinn boosted the income tax rate to balance the budget. Walker has launched a rivalry with Illinois, and says Wisconsin stands ready to poach jobs from its southern neighbor.

At a recent press conference, Walker held up an old bumper sticker produced by Wisconsin’s tourism agency.

“We’ve had a little bit of fun,” he said. “We’ve dug up a slogan from the past, ‘Escape to Wisconsin,’ which was the tourist slogan back in the 80s, and we’ve adapted as the message we’re very clearly sending to employers in the state of Illinois.”

Walker says Wisconsin businesses can look forward to property tax cuts, incentives for medical savings accounts that could help control the costs of health coverage, and new limits on lawsuits. The November election that swept Walker into office also resulted in GOP majorities in the legislature.

Walker said their success should be measured against his campaign promise to create a quarter of a million new jobs during his first term.

Timothy Bartick of the W.E. Upjohn Institute for Employment Research says Walker may be able to keep that promise – but he’ll also have to get lucky.

“What he’s depending on is a vigorous national recovery over the next four years plus some rebound in manufacturing, if he does that, he can achieve that,” he said.

Bartick says there is a lot that Walker and other governors cannot control when it comes to their states’ economies.

“It may not be due to anything he does. It may be due to the national economy,” he said. “But, I’m sure like all governors, unfortunately you get blamed for the national economy knocking you down and you get credit for the national economy recovering.”

Michigan

A recovery would also be welcome in Michigan, where the unemployment rate is nearly 12 percent. Small-but-steady downticks in the jobless rate have more to do with people giving up and leaving the workforce than new hiring. Discouraged jobseekers and involuntary part-timers bring Michigan’s rate of unemployment and under-employment to 21-point-three percent.

Michigan’s new Republican governor is Rick Snyder. The retired venture capitalist and former Gateway computers C.E.O. has promised to “reinvent Michigan.” And he says that includes making the Midwest region more competitive.

“We’re in this together. This isn’t about creating winners and losers in the Midwest,” he said. “This about the Midwest hopefully standing up in a common way to say, ‘Hey, we are world-class. We are a huge part of the world economy and we are going to take our place in that with much more innovation and cooperation and results.’”

Snyder wants to eliminate Michigan’s complicated business tax and replace it with a flat-rate corporate income tax. Snyder says he also wants to focus on helping entrepreneurs regardless of the business they’re in, and create a climate that fosters growth in new industries, and not just the traditional automotive sector.

He can’t ignore manufacturing, either – it is still the dominant sector in his state’s economy.

Snyder has Republican majorities in the Legislature to work with, but many GOP lawmakers have their own ideas about how to restore Michigan’s economy. That means Snyder, like his counterparts in Wisconsin and Ohio, may not always get everything they want as they try to come up with their strategies to turn around the region’s economy.

One Reply to “New Midwest Governors, Old Headaches”

  1. Kasich, I really am watching him closely. If he can get Ohio to rebound and stem the massive population loss, then I will congratulate him fully. However, based on his appearances on the O’Reilly Factor, he is definitely not somebody willing to work with others. He wants to impose on others. So, I bet he only serves one term. However, I like the fact that the Midwest has some energetic, forward-thinking governors. Our region needs serious restructuring because the old economy is never coming back. Old manufacturing is done-it’s all new technologies coming in, that employ highly educated people, not high school or under. Great Lakes region needs new life and energy, and I hope they get it with these guys

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