Governor John Engler
1998 State of the State Address - January 29, 1998
I. INTRODUCTION
Thank you, Connie, for your kind introduction. And thank you, Bishop Murray, for the
inspiring prayer. Majority Leader Posthumus, Speaker Hertel, Chief Justice Mallett,
colleagues in government, citizens of Michigan:
I stand before you to report on the state of our state. And I am proud to say: The
state of our state is outstanding! We're in better shape than at any time since Michigan
was converting the Arsenal of Democracy into the automobile capital of the world.
What a year it has been since I last stood here and addressed you. So much good news.
Congratulations to the Maize and Blue. Now the whole world knows, Michigan is number one!
Congratulations, also, to the Red Wings for bringing the Stanley Cup back to Detroit!
And of course, any talk of champions is incomplete without mentioning the incomparable
Barry Sanders -- football's Most Valuable Player, and one of sports' most valuable role
models!
II. THE STATE OF OUR STATE
It is fitting that we applaud Michigan's great teams and athletes because they are the
best in their class. They climbed to the top because of the important qualities they
possess -- qualities like strength, commitment, leadership and teamwork. These words also
make me think of Michigan's climb to the top in the decade of the '90s.
Strength -- strength captures Michigan's economy in the '90s; 24 tax cuts mean a
savings of more than $11 billion for our citizens. Month after month after month, we
report record-low unemployment numbers. Today, more high-paying jobs are being created
than at any time in our history. Because of our efforts over the last seven years,
Michigan is a far better state in which to live, to work and to raise a family!
Commitment -- commitment describes what we have done for public education in the '90s.
Funding is at an all-time high -- more than $11.8 billion! That's a 50 percent in crease
since my first state of the state address. Our education reforms are paying off -- test
scores are going up. U.S. Education Secretary Richard Riley called Michigan his "most
improved player" in the nation. Because of our efforts these past seven years,
Michigan is becoming a smarter state!
Leadership -- leadership expresses how our welfare reforms have strengthened families
in the '90s. Welfare rolls have fallen for 45 months in a row and are at their lowest
level in a quarter century! More than 135,000 families have moved off welfare rolls and
onto payrolls. In fact, more families have moved off, than remain on, cash assistance.
Because of our efforts over the past seven years, Michigan families are becoming more
self-reliant!
Teamwork -- teamwork describes all we've done in the '90s to make citizens safer in
their homes and communities. You have passed and I have signed more than 300 crime
-fighting measures. Crime throughout Michigan is down -- down for the fifth year in a row.
Because of our efforts these past seven years, Michigan is becoming a safer state!
Teamwork also describes our bipartisan approach to fixing Michigan roads. This year,
for the first time, transportation spending will top $1 billion -- and we are doubling
dollars for road repair. Every penny of the fuel tax increase is going to repair roads,
and this, too, will make Michigan safer. We're fixing the roads, and we're fixing them
now!
Ladies and gentlemen, we have achieved so much in so many fields of endeavor, that the
stage is now set for Michigan to reach even higher. Strength, commitment, leadership,
teamwork -- that's how we've turned this state around, and that's how we'll take on the
future. Tonight I propose the next steps -- bold steps -- to make Michigan first in the
21st century!
III. TAKING THE NEXT STEPS TO MAKE MICHIGAN FIRST IN THE 21ST CENTURY
A. Cutting Taxes
Let us begin by looking at the state of Michigan's economy -- because it is in truly
outstanding shape. In 1997, Michigan achieved its lowest unemployment rate since 1969 --
4.1 percent. Just as remarkable is the fact that our state unemployment rate has been
below the nation's rate for four consecutive years. The last governor who could cite even
one year below the national average was George Romney, back in 1966.
Our goal for 1998: Unemployment below the national average for five years in a row.
That was unthinkable back in the '80s.
Since December 1991, when the nation was in recession, the number of men and women with
jobs has surged by 550,000. Just over the past year, employment in Michigan has climbed by
100,000. Total employment is at an all-time high, recently exceeding 4.7 million workers
for the first time in history. Wages and salaries are also at an all-time high.
The economic news is so good that Wall Street, just last week, upgraded Michigan's bond
rating to "AA+," our best rating in 22 years.
Know what else was unthinkable back in the '80s; Cutting taxes. And here I want to
congratulate this Legislature. Your commitment to get government off the backs of our
families and out of the pockets of our workers has allowed me to sign tax cuts totaling
more than $11 billion. $11 billion!
Some of our tax cuts will make for a pleasant surprise at filing time for years to
come. I applaud this Legislature for joining me in raising the personal exemption. This
coming year a Michigan family of four, with two pre-schoolers, will be able to exempt
$12,400 -- more than ever before.
Besides higher personal exemptions, additional tax cuts are phasing in: $237 million in
new tax cuts are taking effect this year, and $280 million more next year.
1. Cut the Income Tax Rate
My friends, since tax cuts have helped so many families and brought us so far, let's
take a giant step. Tonight, I propose we cut Michigan's income tax -- and cut it again,
and again, and again, and again -- five cuts over five years, until the tax rate goes all
the way down to 3.9 percent. The cuts begin in the year 2000, and when fully phased in,
Michigan's income tax will be the lowest in a generation.
What do these tax cuts mean for Michigan taxpayers? Treasurer Doug Roberts ran the
numbers using the higher exemptions and the lower rates, and the savings are huge -- $3
billion more when fully implemented. I repeat: $3 billion more over the next five years --
not for government, but for families.
What do these cuts mean for you and your family&63; Let's say you're a Michigan family
with two children and an income of $40,000. In the first five years, your family will save
almost $850.
Or say you are a public school teacher, and you make $49,000 a year. Your family will
save more than $1,000.
Or say you're a Big Three autoworker, making $55,000 a year. Your family will save more
than $1,100.
These tax cuts are not targeted at special interests. These tax cuts are
across-the-board. They ease the "middle-class squeeze" for everyone, enabling
families to buy a house, pay off bills, pay for day care, plan for college or save for
retirement.
Now, to those who claim government needs that money, I remind you: Think back to 1991.
Who -- in the face of a nearly $2 billion deficit -- would have expected us to cut taxes
once, much less 24 times? And to those who wrongly argue that our tax cuts put education
funding at risk, I remind you again: We've cut taxes 24 times, and we have not cut public
education. Our firewall protecting education stands firm.
What I am proposing is a responsible tax cut. It commits us to careful stewardship of
the taxpayers' money over the next five years, just as we have shown over the past seven
years.
What I am proposing is an affordable tax cut. Doug Roberts says that for fiscal years
'98 and '99 combined, we can expect more than ?800 million of General Fund and School Aid
revenue growth. In years past, Lansing would respond to the growth of state coffers by
calling for "revenue sharing." In truth, it's better to reward our workers by
not collecting so much of their hard-earned money in the first place.
What I am proposing is a good tax cut -- good for our families, our workers, our
taxpayers. So let's take the next bold step: Cut the income tax!
2. Constitutional Amendment
Remember the higher taxes and failed policies of the '80s? I do -- and we're not going
back! Look at our coat of arms before you. You see the Latin word "Tuebor" --
"I will defend." Ladies and gentlemen, to defend our families and workers, I
propose a common-sense solution. I propose a constitutional amendment that would require a
three-fifths vote of both the House and Senate to raise taxes.
Currently 50 percent plus one raises taxes. I believe we should make it a little
harder. Legislators in both chambers have been working on this -- Senators Bouchard,
Shugars, Hoffman, Steil, Bennett, North and Jaye; and Representatives Goschka, Lowe,
Whyman, McBryde, McManus, Raczkowski, Cropsey, Kaza and Geiger. I support the language of
House Joint Resolution K of 1997, sponsored by Representatives Oxender, Perricone,
Hammerstrom and Jelinek. That resolution reads: "No bill to increase a tax base or a
tax rate of an income tax, sales tax, use tax or the single business tax . . . shall
become law without the concurrence of three fifths of the members elected to and serving
in each house."
For the sake of the people of Michigan, now and in future generations, let's take this
bold step!
B. Next Steps in Protecting the Environment
Now let us look at the state of Michigan's environment and natural resources.
As you know, I consider myself a conservative. The root of the word
"conservative" and "conservation" is the same. One of the greatest
obligations of state government is to manage and conserve our natural resources for the
sake of this and future generations. I have always maintained that solid economic growth
is compatible with sound environmental management.
As chief steward of the Great Lakes, Michigan can be rightfully proud of her many
accomplishments. The water we drink is excellent. We have made, and continue to make,
tremendous progress since monitoring began in earnest back in 1974. In fact, where water
is concerned, we had the fewest federal violations in the country in 1996. The most recent
EPA data show that our state is number one in the nation in meeting federal drinking water
standards.
The quality of the air we breathe is also excellent. We have made, and continue to
make, tremendous progress since monitoring began back in 1970. Indeed, Metro Detroit and
Grand Rapids have the distinction of being the first major metropolitan areas in the U.S.
redesignated as reaching attainment of federal clean air standards.
In addition, we've protected our groundwater. Each year we are reducing threats by
removing more leaking underground tanks. Only 65 were removed in 1990, but 1,548 were
removed in 1997 -- a record number. And since we passed environmental reforms in 1995, the
number of toxic sites we've cleaned up each year has quadrupled.
Many of those cleanups have been in our cities. Reusing old industrial sites not only
allows us to reinvigorate inner cities and downtowns; it enables us to slow down the
paving of green fields and thus conserve Michigan's beautiful countryside. To date, our
cleanups have seen nearly $300 million invested in our cities and nearly 3,500 jobs
created.
Proposition P in 1994 set up a parks endowment fund and ended diversions from the
Natural Resources Trust Fund, which previous administrations had allowed. We also stopped
the diversion of Great Lakes water.
Here's another first: In 1994, Michigan was the first state to craft a comprehensive
environmental code, and it took effect in 1995. The sale of the State Accident Fund, about
which I spoke in a previous State of the State address, led to the establishment of a $40
million endowment fund to upgrade and maintain Michigan's parks.
Here's yet another first that I am pleased to announce this evening. You may recall my
promise in last year's State of the State address to do what I could to strike a fair
balance between environmental concerns and private property rights. I mentioned one
particularly sensitive area, the scenic Jordan River Valley. Last month the Department of
Natural Resources, acting on my direction, agreed to an historic 1,220-acre mineral trade
in the Valley. This further protects the pristine environment along the Jordan River and
respects the property rights of mineral owners.
The growth and diversity of our wildlife is another notable development in recent
years. We are renovating Michigan's fish hatcheries, and have surpassed our original goal
of having 200 pairs of nesting eagles in the state by the year 2000; it looks as if we are
going to have 300!
While our record of achievement is impressive, the time is right to take the next step.
Tonight, I propose that we invest $500 million more to make Michigan even cleaner. Because
of our recent credit upgrade on Wall Street to "AA+" -- Michigan's best in 22
years -- and because of low interest rates, and because of our economic strength, it is
prudent to raise $500 million through bonds.
Michigan citizens have always supported environmental ballot initiatives. Whether
through bonds or a constitutional amendment, Michiganians have proven their determination
to protect Michigan's environment for future generations. Recall that 10 years ago, the
citizens of Michigan authorized bond sales of $800 million to improve our parks and
protect our environment. One of the senators who helped lead that effort is with us
tonight -- our own Connie Binsfeld. That money has been fully obligated.
These new "Clean Michigan" bonds will benefit both our peninsulas in three
criti cally important ways -- $400 million for restoring polluted and abandoned site; $50
million for protecting drinking water; and $50 million for upgrading facilities at our 96
state parks.
From Lake Superior to Lake St. Clair, our "Clean Michigan" initiative will
improve our quality of life. It will accelerate the cleanup of sites like a PCB saturated
landfill in Bay City, sludge pits in Van Buren County and a rusting tank yard in Eaton
County. It will protect our lakes, rivers and streams from runoff and pollutants. It will
make our out standing state parks even more enjoyable for tourists and campers.
The bottom line: This initiative means cleaning up our water, fixing up our cities and
sprucing up our parks.
C. Next Steps in Education
My friends, our most precious resource is our children. As moms and dads, we do all we
can to help our children succeed. As leaders and legislators, we must do all we can to
help everybody's children succeed.
I've often said our strategy for success comes down to one thing: The state with the
best schools wins. No question about it: Michigan must have the best schools -- the best
in the world. And the good news: We are making dramatic progress toward reaching that
goal.
Remember all the problems we heard about in years past? . . . all the barriers to
having good schools? Working together, we have achieved unprecedented reforms to tear down
barriers and open up opportunities.
Remember when millage elections were failing and property taxes were skyrocketing#63; We
fixed that problem with Proposal A, which slashed property taxes and constitutionally
guaranteed funding for every student.
Remember the old funding system: The rich got further ahead, the poor fell further
behind, and the kids got trapped in the middle? Again, we fixed that problem with Proposal
A. The equity gap has been cut by one-third and continues to close, and every student in
every school gets at least $5,100.
Remember the pain when the last two governors signed executive orders that cut
education by $400 million? On our watch: No executive order cuts. In fact, since 1990,
education spending is up 50 percent, and now tops ?11.8 billion. I am proud to say that
Michigan is the only state in America to balance its budget six years in a row, cut taxes
24 times and increase education spending every single year.
Remember guns and knives in school? We fixed that problem: Bring a gun and you're done.
So far some 600 hooligans learned that lesson.
Remember illegal teacher strikes? We fixed that problem -- by enforcing the law. Now,
teachers are teaching and children are learning -- from day one.
Remember when you had to change houses to change schools? We fixed that problem -- with
choice, charter schools and competition.
Remember when newspapers carried sports scores but not test scores? We fixed that
problem by creating the Michigan School Report. Now, through the Internet, the report is
accessible to every parent.
Remember the complaints about teacher tenure? We fixed that problem: Tenure reform
means bad teachers are moving out, and good teachers are moving up.
Remember the 17-year-old court fight over special education funding? We fixed that
problem: Our $1 billion Durant settlement treats all schools fairly and helps every child.
Details of the Durant settlement include:
- More than $211 million will be paid to the 84 plaintiff school districts. This money is
available without restriction and may be used for any purpose that local school boards
determine.
- Approximately $640 million will be paid the nearly 500 districts that did not sue so
that they are treated fairly with those who did sue. Half of this money will be made
available immediately; the other half will be paid in 10 equal, annual installments.
- Michigan schoolchildren most at risk will benefit from $250 million in resources this
year and $260 million next year. Fiscal year 1997 funding was $230 million.
- To help high school students graduate to productive, high-paying jobs that don't demand
a college education, $20 million will support the development of a new, statewide, career
preparation system.
- Next year, $20 million will be budgeted for schools to help reduce class sizes and
increase individual instruction.
- To accomplish all this while ensuring overall fiscal stability, the state completed
action on school funding for both the current fiscal year and the next fiscal year.
- Interest savings resulting from improvements in the way schools are paid by the state --
equalizing payments throughout the year -- will be plowed back into public education.
- Pension costs for school districts will be reduced with the savings devoted to the
classroom.
- An additional $66.7 million will be spent this year, and an additional $48.2 million
next year, for special education to help children who need help the most.
Remember concerns over technology and the lack of computers in classrooms? We've been
fixing that problem. State resources, combined with local and federal funds, have given
our schools unprecedented access to the Internet and to the world. I envision that $1
billion settlement being used to infuse more classrooms with state-of-the-art technology
and to increase the number of trained teachers in those classrooms. Imagine our children
communicating across space and time in ways previous generations could only dream of.
Interactive technology -- and teachers trained to use it -- should be available in our
class rooms to enable all students to enrich their lives and maximize their potential.
Remember the mandates, red tape and threats to local control? We're fixing that
problem. Already we've overhauled the school code and dumped some 200 obsolete sections.
We are empowering school boards and, more importantly, trusting parents.
Remember concerns over class size? We're fixing that problem. In the '90s, our $4
billion increase in school funding has improved the ratio of teachers to students. In
fact, since I took office, Michigan public schools have hired an additional 6,700
teachers. And this year we are launching a $20 million initiative for even smaller
classes. Thank you, Senator Conroy and Senator DeGrow.
Remember when school boards spent all their time talking about the problems I just
discussed? Since we've fixed those problems, school boards are now free to focus on their
real mission -- delivering a quality education to every child.
The bottom line: Our reforms, combined with dedicated teachers and concerned parents,
are getting results. Rising test scores are the proof. In a national science test, the
level of improvement among Michigan students was tops among the 10 largest states in the
nation. Over the period from 1992-96, Michigan's 8th grade math scores showed the biggest
improvement in the nation. No matter what test you look at -- ACT, SAT, MEAP, the High
School Proficiency Test -- our students are doing better. Let's congratulate the kids who
take the tests, their teachers who prepare them, and their parents who support them.
With all we've done, what steps remain to make Michigan schools first in the 21st
century?
1. All 3rd-graders Reading
My friends, nothing is more basic than the ability to read. Reading changes lives. The
inability to read also changes lives. It means falling behind your classmates, dropping
out of school, and spending your life in unfulfilling jobs or, worse, in prison. If our
children aren't reading, Michigan will never be first in the 21st century.
Let me tell you something that saddens me. The most recent MEAP test, while showing
improved reading scores, indicates that 51 percent of fourth-graders cannot perform at
grade level. That means not even half our fourth-graders are good readers.
It doesn't have to be so. The best research, conducted by the National Institutes of
Health, shows that it is realistic to teach almost 100 percent of our kids to read at
grade level if -- if -- they are screened early for learning difficulties and are taught
using effective methods.
In my visits to schools, I've seen the difference careful screening and good teaching
can make. It's unacceptable that any child grows up in Michigan unable to read.
Tonight I set before you this challenge: Children who start kindergarten this fall must
be able to read by the time they reach the fourth grade. Let that be our goal -- write it
down: Reading by the fourth grade. Best in the nation. No exceptions. No excuses.
And while we're at it: No more social promotions! Recent reform proposals in Detroit
and Lansing seek to stop that practice. I applaud them -- and every school should stop it.
Now, making every child a reader will take commitment -- the commitment of par ents,
teachers, school boards, and all of us here tonight.
I am proposing an ambitious "Reading Plan for Michigan." This "RPM"
strategy helps children even before they enter school. Our Early Childhood Office in the
Department of Education will develop "reading readiness kits" and get them into
parents' hands. Let's help moms and dads be good first teachers.
Because each child is unique, and because each child can succeed, I am directing the
Department of Education:
- to assure that every child is assessed from the first day of school with the best
diagnostic tools to determine reading readiness;
- to see that every child is monitored on an ongoing basis to insure reading progress;
- and finally, to design a model summer reading program to reinforce reading year around.
In the future, if a child is not reading by the end of the third grade, he or she will
be required to attend a summer school program, designed to ensure the ability to read at
grade level.
Michigan has many wonderful and dedicated teachers. Dedicated as they are, they cannot
do the job alone. Nor can government ever be a substitute for Mom and Dad. It is
imperative that parents become more involved in their children's education. To assist
parents, there will be a statewide resource guide so they'll know who to call to get the
help their youngsters need.
Fortunately, in addition to teachers and parents, many individuals and organizations
already volunteer. I strongly support the expansion of our highly successful Alliance for
Children's Education. Michigan's ACE initiative has already developed mentoring programs
for reading in more than 150 schools.
Many other groups are involved: Help One Student to Succeed (HOSTS), Success to All
Readers (STAR), literacy councils such as Kent County's Project One To One, the SUC CEED
Program, Reading Is Fundamental (RIF), Read Indeed, the National Center for Family
Literacy, local libraries, the Michigan Reading Association -- these and others are
important allies. Michigan is blessed with a wealth of reading organizations, and they are
to be commended for all their good work. Tonight, I am calling on all these groups, as
well as Michigan's business community, to redouble their efforts to help all children
read.
Finally, in May, our outstanding Community Service Commission, ably led by First Lady
Michelle Engler, will be hosting a Volunteer Super-Summit, and reading will be a focus.
General Colin Powell will be the keynote speaker, and I want him to see how we are
mobilizing to make all Michigan children readers.
As the twentieth century draws to a close, I believe that a child who cannot read has
no passport to the 21st century. Reading is our most important prevention program. It's
about preventing ignorance and poverty. All children can read -- and in Michigan they
will.
2. Safe Schools
Something else is essential to learning: safe schools. Too many teachers have become
casualties in their own classrooms. Last year, I called on the men and women in this
chamber to pass our teacher protection legislation. I support it, the MFT supports it, the
MEA supports it, and the Senate passed it. Make Michigan schools safer, protect our
teachers and staff -- let's get it done.
D. Next Steps to Strengthen Families
We all agree that a good education is the cornerstone of a good life. But the
foundation of a good life is a good family.
This evening, I am happy to report that the state of Michigan's families is much better
today than it was when this decade began. Infant mortality has declined for seven straight
years, and is now the lowest ever in Michigan history.
Moreover, we celebrate six consecutive years of declining teen pregnancies -- now we
have the lowest teen pregnancy rate in a generation.
Further, the improvement in our immunization rate is the most dramatic in the nation.
We also are helping more working parents with child-care needs than ever before. Next
year, we will spend almost $280 million -- a 400 percent increase over the last six years.
And we will help more than 55,000 families with child care -- an almost four-fold increase
since 1992.
And thanks to our Healthy Kids initiative, 80,000 children who were without health
insurance are now covered.
Our nationally acclaimed welfare reforms have also been strengthening Michigan
families. From the beginning, the goal of our reforms has been to help people achieve
financial independence by moving them from a welfare roll to a payroll. For 45 consecutive
months, the number of families needing welfare has declined, and now welfare rolls are at
their lowest level in 27 years. Since October 1992, when Michigan began its reforms,
almost 136,000 families have started earning paychecks instead of getting welfare checks.
All our remarkable progress gives Michigan another distinction we can be proud of: The
United States Census Bureau reported last year that we were the only state in America
where the number of people covered by health insurance went up, while the number of people
living in poverty went down.
We've also made dramatic gains in fighting child abuse and neglect. For children at
risk, we are moving faster to make sure they don't miss their chance at childhood. Our
strategy is one of prevention, and we back it up in our budget. Since the passage of our
adoption reforms, the number of children adopted into permanent, loving homes has doubled.
And we can be proud of last year's far-reaching reforms that mean better trained
child-protection workers, more rigorous family assessments and speedier decisions to
protect vulnerable children. All of these actions are in the best interest of Michigan's
children. Tonight, I'd like to pay special tribute to a great champion of children,
Lieutenant Governor Connie Binsfeld.
What are the next steps to make Michigan families stronger and more self reliant?
1. MIChild
First, a new initiative called MIChild will ease the worries of parents of more than
150,000 uninsured children. When fully implemented this year, virtually 100 percent of all
Michigan children will have access to health insurance.
A family of four with an income up to $32,000 is eligible to participate. It will cost
a family just $8 a month -- or $96 a year -- to insure their child. The state and federal
government pay the rest. The annual maximum for any family would be the cost of insuring
two children, or $192 a year, n
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