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There are growing fears that we could see a state government shutdown if a budget isn’t completed by the end of next month.
What lessons can be learned from the last time there was a partial shutdown?
Well, former Michigan Governor Jennifer Granholm remembers a thing or two. The Democrat worked through budget standoffs (that turned into brief partial government shutdowns) in 2007 and 2009. Like today, there was a divided legislature.
Rick sat down with Granholm this week for her perspective on the stalled budget negotiations in Lansing, the divisive political environment, and Detroit Mayor Mike Duggan’s independent run for governor.
In today’s special edition of the It’s Just Politics newsletter, read the exclusive interview below or take a listen above.
Rick Pluta: If you are following what's happening in Lansing, you know that there is a budget deadlock between the Senate led by Democrats and a Republican-led House. When you were governor, you faced a similar situation. The state saw two, albeit very short, partial government shutdowns. Again, divided government. What lessons would you pass along today?
Jennifer Granholm: You know, I think one of the things that was pretty effective was in the first shutdown, when we had just a horrible budget crunch, we went to the people. Now you can only do this so often. I think we did it one too many times, but the first time it was really successful, meaning going around the state, having town halls where you invited members of the Legislature and the citizens who represented parts of the budget that might be impacted, right? And then I gave them clickers and put up questions. “Where would you place your first dollar?” “Where would you make your first cut?” I went to all the regions of the state to be able to do that, and the results of those voting was compiled. And since the members of the Legislature were there, Republicans and Democrats, they understood what people were saying were their priorities. And we knew that it was going to be hard. People understood that you had to make tough cuts. And because they helped to make the decisions about what was cut, even though people were angry, the bitter pill was a little easier to swallow.
RP: What advice would you give to legislators, the governor - since you were a governor in the room - in terms of negotiating? There certainly seems to be a standstill there.
JG: It's so hard. You know… there's so many externalities that cause gridlock to happen. But, you know, I do think that continuously trying to get [the] quadrant in the room, to be able to have these face to face meetings or to have one-off meetings … Far be it for me to give advice to Governor Whitmer, because I think she's done an amazing job and I'd like to learn from her. But I do think the human touch and that connectivity is really important because otherwise it's so easy to go into your corners and your partisan corners and not come out and negotiate. Everything can't be a 100% win. Everybody's got to give something to move it forward.
RP: What did you do to try to build bridges and relieve the tensions? Because they were definitely there.
JG: Oh my God, you're bringing up stuff that makes the hair on the back of my neck go up, because I’ve really tried to forget a lot of the terrible acrimony that existed. You know, ultimately, it's the final pressure of a shutdown that ends up really forcing decision. Nobody wants to see a shutdown or if it is a shutdown, it's very quick… and I spent nights in the Capitol in my office. I remember my back went out. I remember them bringing in, like, a little thing with somebody who could manipulate my back so that I could stand up. It was just really very stressful. But I think the important thing is, use the deadline to your advantage. Make sure you are not just sending emissaries, but that you're actually talking to one another. I think that's very important. All of these are so basic, though, Rick, and ultimately it comes down to people being more afraid of the people who they represent. And that is important that citizens tell them, “come on, nonsense. This is nonsense.” You're not going to be rewarded for being a stick in the mud.
RP: One of the issues on the table is a throwback from your time in office, which is the battle over economic incentives, which you turned to to try to pull Michigan out of the Great Recession. What should people be looking for in terms of how to use economic incentives to draw businesses, and what those incentives ought to look like?
JG: Let me just say this now because, after being governor, we moved to California because of my parents who were ailing. And I can tell you what it's like not to have economic incentives. In California, they don't have a comprehensive office or strategy to be able to lure, and therefore - it's not the only reason - but you see a lot of businesses leaving. They don't feel like the state is really leaning into them. I think carrots are a very important part of making a state attractive. You're competing with all of these other states who also are putting economic incentives on the table, so we can decide we're not going to play, and therefore you'll end up seeing companies leave, or you can be in the game. And Michigan has been super successful with the MEDC [Michigan Economic Development Corporation] about being in the game and attracting job providers, which is what people would like to see, especially as we continue down this path of looking forward at forward-leaning industries that are being poached everywhere across the country. I will say, we just had this incredible, I think, experiment in policy at the federal level, which is the Inflation Reduction Act that was passed a few years ago, which provided national incentives, tax credits for companies to come and locate in the United States. As a result of those incentives, a state like Michigan, Michigan was the second highest state in terms of the number of factories that said they were coming or opening up of all 50 states. Because Michigan had a partnership with the federal government and the state with the MEDC, it made it irresistible for Michigan to be a place where that's located. And that was based upon incentives and carrots. So I think it's really important to compete.
RP: What would the elements be, if you were going to put together a recipe for an incentive package, what would be in it?
JG: Obviously every governor has their priorities in terms of sectors they want to attract, but you certainly don't turn your back on the industries that brought you to the dance. And so advanced manufacturing, EVs, batteries, all of that clean technology is one of the places that I know Michigan has really excelled in. So you have to figure out what your sectors are and make sure that you have value-add, meaning how are you going to be competitive with other states because of your history of manufacturing, your workforce, etc.? That's number one and number two, make sure that you’re, whether they're tax credits or grants or a combination of both, as well as making sure that you have regulatory streamlining for businesses, those are the components that make a state irresistible.
RP: Let's talk about the state of politics. What do you make of the divisions that we are seeing in the body politic? And do you see a remedy for the anger and the mistrust that's out there?
JG: It's so heartbreaking, honestly, to see the division that we are seeing of people going to their corners, citizens moving to their corners, although there is still a big chunk in the middle who are fed up with both parties, right? As there often is. But it seems like that middle ground is getting larger. The fact that leadership is provoking partisanship is really a challenge. You know, it's supposed to be the United States of America. It's stoking that kind of division [that] I think has a huge impact on citizens. I think if you're leading in a way that divides people, that tells blue states or red states that you're not wanted under the presidential leadership. That is a huge problem and that has a trickle down effect. And if you’re redistricting everybody out who's not like you, what does that say to the people who live in that state? So do we only have all-blue or all-red states? It's insane. You know, the attacks on institutions that have united us, whether it's the media or higher education or non-governmental organizations or, you know, NPR, it's pulling the rug out. You know, the Kennedy Center, I mean, none of these should be partisan. And they historically haven't been, but it's really poisonous, I think, to democracy to see all of this. That said, I don't think people are going to reward that in the long run. I mean, obviously, there has to be a period of time for this administration's whirlwind of activity, of course, which it has been, to sort of take hold. But this aspect of what is happening, I think, is really poisonous.
RP: You, of course, worked with Mike Duggan in Wayne County, and as I'm sure you are aware, he is mounting an independent run for governor of Michigan. What do you make of that? Do you think that there's a path there?
JG: I do. I think he's got a good understanding of where people are at, that people don't want to be in those partisan boxes. And Mike is so effective and smart. For him to select a lane, to be in a lane that is able to speak to both sides, able to prove that he can get stuff done, I think is a really smart, smart move on his part. Obviously, he comes from the Democratic Party, but these partisan times are just unprecedented in terms of how people are viewing the parties. So I think it's a smart move.
RP: If you were running again. Would you consider running as an independent?
JG: Probably not, because I just feel so connected to the Democratic Party. I would want to help to repair the image and the reality of the Democratic Party. And part of that has to do with getting stuff done. We often have steeped ourselves in the paralysis of process, meaning stuff hasn't been able to get done. I do think that having been in Washington, I've really seen the impact, for example, of technology on being able to leapfrog over politics. So if we can use technology, for example, AI, to leapfrog over the paralysis of permitting, to be able to get stuff done more quickly because of AI, that's an opportunity. But getting things accomplished for people and lowering their costs, I think has to be the top, I mean, lowering people's costs has to be the top thing at the moment.
RP: Former Energy Secretary, former Michigan Governor Jennifer Granholm. Thanks for spending this time.
JG: You bet. I'm happy to be with you.
The conversation was edited for length and clarity.
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Yours in political nerdiness,
Rick Pluta & Zoe Clark
Co-hosts, It’s Just Politics
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Have thoughts about what the former governor had to say? Or, just want to let us know what you want more of (less of?) in the newsletter? We always want to hear from you! Shoot us an email at politics@michiganpublic.org!
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We are into week six of seemingly stalled budget negotiations in Lansing. Six weeks since K-12 schools, higher ed and some local governments started their fiscal years without knowing how much state money they’ll receive. Just what’s going on at the state Capitol?
