Weekend Edition Saturday - Interview

SHOW: Weekend Edition Saturday (12:00 Noon PM ET) - NPR

May 3, 2003 Saturday

HEADLINE: Governor Jennifer Granholm, Democrat, Michigan, and Governor Dirk Kempthorne, Republican, Idaho, discuss state budget problems

ANCHORS: LINDA WERTHEIMER

BODY:
LINDA WERTHEIMER, host:

As Congress and the president remain divided on whether to aggressively cut taxes, state houses across the country are facing aggressive budget cuts. At present, nearly all state budgets are in deficit. We spoke with a couple of governors grappling with the math. Michigan's newly elected Democratic governor, Jennifer Granholm, is looking at a $1.7 billion budget deficit.

Governor JENNIFER GRANHOLM (Democrat, Michigan): The past three years our state has been spending 17 percent more than it's taken in. And we used to have a $1.2 billion rainy day fund. We have no rainy day fund now. It is very hard, I think, to make the political decisions to cut.

WERTHEIMER: But the other option to balance the books is to boost taxes. Unpopular and unappealing.

Gov. GRANHOLM: I'm not interested in raising taxes. We've been a state that has been pretty overtaxed and has not been as competitive as other states. So I think we'd prefer a state that is lean but not mean. And, in fact, I've continued a tax decrease, a tax cut that was previously adopted. I think the biggest victim of this budget has been waste and duplication and administrative inefficiency, and we've just tried to think about ways to do it differently.

WERTHEIMER: You've been traveling around Michigan asking people what they think you ought to cut, what they can do without, what they can't do without. Did you base your budget proposals on those suggestions?

Gov. GRANHOLM: You bet I did. In fact, I called it the Bad News Budget Tour. And, of course, you might guess that people universally said the one place you should preserve is children and K through 12 education. And pretty uniformly people said, 'We don't want you to have to cut, but if you have to cut, the first place to go is higher education,' but I think that in the same way that we did not raise our tuition, i.e., we did not raise taxes in making these cuts, that the universities are compelled to do the same thing.

WERTHEIMER: One of the complaints of all of the governors has been that the federal government ought to be helping out. Do you think the feds ought to be forking over some money to states like Michigan?

Gov. GRANHOLM: Well, there is no question that states are struggling with Medicaid expenditures, for example. I mean, we have—it's 25 percent of my state budget, and when you have federal mandates and the states are aware of the services and the rubber meets the road, this is where real people feel the effects of government policy, you better darn well fund the government policy that you are stating that the states must comply with. So we need help, and we need it in the states and we need it more than just in the realm of flexibility, which is what the president has said that he would give us.

WERTHEIMER: I guess the newspapers and whatnot in your state have occasionally sort of made a joke of this, that here you are, a woman governor and the first Democrat in a while, and you're the one who's having to clean up the house.

Gov. GRANHOLM: I often joke that I am a mother and I'm used to cleaning up other people's messes.

WERTHEIMER: Governor Granholm, thank you very much.

Gov. GRANHOLM: You bet. Thank you for having me on.

WERTHEIMER: Governor Jennifer Granholm, Democrat of Michigan, speaking to us from her office in Lansing.