Rebuttal

Mackinac: State spending has grown

The Oct. 24 article ("Michigan's shrinking government") distorted and redefined (however unintentionally) the thesis of a paper written by Mackinac Center adjunct scholar Gary Wolfram.

First, the article implies that Wolfram's paper looked at state spending from state sources and was not adjusted for inflation. He did not. Wolfram examined total state spending and General Fund spending. Second, the subject of the Wolfram paper was not about the proper size of state government. It was a comment on the work of two economists who made claims about state employment that were not substantiated by the evidence they presented.

Wolfram's paper specifically states, "While it is possible that the authors are correct (about the decline in the state work force possibly threatening the state's economic health and safety, etc.) there is nothing in the paper that demonstrates this, and this conclusion requires an entirely different study."

Finally, The News employed calendar year 2000 as the base year for which it measured such changes as nonfarm private and state civil service work forces, as well as employment at GM and university enrollment. But for measuring changes in the budget they used fiscal 2001, which only measures three months of spending in 2000. Rolling the base measurement year back to fiscal year 2000, however, captures nine months and radically changes the measure of the state's budget growth.

Total state spending rose from $34.5 billion in Fiscal Year 2000 to $44.5 billion (as passed) in Fiscal Year 2009 and represents an increase of 28.8 percent. Inflation as measured by the Consumer Price Index increased 25.4 percent, making Wolfram's remark about state growth accurate. Most of the inflation-adjusted increase in state spending occurred while inflation-adjusted state Gross Domestic Product declined 3.3 percent. In other words, the state budget was increasing while the state economy was declining.

Michael LaFaive , Director,

Morey Fiscal Policy Initiative,

Mackinac Center for Public Policy,

Midland