Prepared for
The Office of the Governor

A convergence of forces has brought about the most serious financial crisis in many years for Michigan’s state and local governments. This is a structural challenge, not simply the result of an economic downturn. A persistently weak economy, tax cuts, spending pressures, and inattention to essential government reform have triggered the crisis. We will not economically grow our way out of it.

The depth and breadth of this crisis—and the fundamental need for investment—demand a comprehensive response. The crisis demands a shared commitment to a better future for our state. It demands that leaders lead by engaging the residents of the state in a dialogue to determine what is truly important to their futures and their families. It demands that policy makers at all levels accept the mantle of stewardship and shed the robes of partisanship. The way in which policy makers and residents respond to the current crisis will—in large measure—define Michigan for both this and the next generation.

Public Sector Consultants staffed and facilitated the Emergency Financial Advisory Panel tasked by Governor Jennifer Granholm to “assess the current state government financial crisis and offer recommendations on how best to avoid similar crises in the years ahead.” The final report shows that Michigan’s state government confronts significant short- and long-term financial challenges. Over 18 months (roughly FY 2007-2008, and beyond), state policy makers face approximately $3.5 billion of services and programs unsupported by revenues.

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