July 21, 2014
THE TURNAROUND GOVERNOR
Rick Snyder and the future of Michigan
JOHN J. MILLER
Detroit — ‘Today we’re going to achieve an important milestone in the comeback of Detroit,” said Governor Rick Snyder of Michigan on June 20, shortly before signing legislation that commits nearly $200 million in state funds to a bailout for the city that filed the largest municipal bankruptcy in U.S. history last summer. The ceremony took place in the Globe Building, where Henry Ford once worked as an apprentice machinist — but which had fallen into such disrepair that it had become a showcase for the style of photography that turns visions of Detroit’s urban ruins into a neo-Gothic art form. Yet on this day, after a year of gutting and restoration, the Globe was bright and clean and smelling of drywall paste. “I picked this place,” said Snyder, a Republican, following the event. “I thought it was a great analogy.”
As Snyder seeks reelection this year, he’s all about symbols of renewal, right down to the green that decorates his campaign logo. He can hardly hold a conversation without using the word “comeback” — or “turnaround,” “resurgence,” or any number of synonyms. Some of his constituents refer to the first ten years of the 21st century as “the lost decade,” a depressed period of auto-industry upheavals and demographic downsizing. Since Snyder took office in 2011, however, Michigan has perked up, adding about a quarter-million jobs. This spring, unemployment fell to 2008 pre-crash levels. Most notable, perhaps, is that Michiganders have halted their mass exodus: Following seven straight years of population loss, the state has gained people for two years in a row. In June, Snyder’s job-approval rating stood at 58 percent, according to a survey by Mitchell Research and Communications.
Snyder may not be a name-brand conservative reformer in the mold of other midwesterners, such as former Indiana governor Mitch Daniels or current Wisconsin governor Scott Walker, but he has assembled a record that many Republicans think will carry him to an easy victory in November against former congressman Mark Schauer, a Democrat. The most optimistic believe that his performance may reverberate in Washington, helping Terri Lynn Land become only the second Republican since the Nixon years to win a Senate race in Michigan.
On paper, the 56-year-old Snyder is exactly the sort of officeholder that many voters, especially conservatives, say they want: a figure who spent the bulk of his career outside of politics. He grew up in Battle Creek and attended the University of Michigan, where he earned degrees in business and law. He worked for an accounting firm and eventually joined Gateway, the computer maker known for the cow spots on its boxes. Snyder rose to its upper ranks and made a small fortune in stock options. Then he became a venture capitalist in Ann Arbor and grew even wealthier. Friends say he had talked for years about running for public office, and in 2009 he jumped in, announcing his candidacy for governor. Apart from the business community, almost nobody had heard of him.
Snyder set out to distinguish himself from the career politicians who were his rivals in the GOP primary. His campaign made like a think tank, publishing papers full of policy proposals. Then Snyder landed on a winning theme that turned his technocratic impulses into a virtue, calling himself “one tough nerd” who had the know-how to jump-start Michigan. A television commercial boasted that he was a reader of Fortune at the age of eight and claimed that “his ten-point plan to reinvent Michigan is so detailed that, well, it’s likely no politician could even understand it.” In the primary, he won a 36 percent plurality, beating three other Republicans with long résumés in state and federal politics. In the general election, he trounced his Democratic foe by 18 points.
Calling himself a “nerd” wasn’t just a clever campaign ploy: It’s a fitting description of Snyder’s actual proclivities. “A nerd is someone who loves to learn,” says Snyder, from his office in Lansing’s Romney Building (named for Mitt’s dad, who was Michigan’s governor in the 1960s). “I love the private sector, but the breadth of what you need to learn as governor is so much wider.” Snyder hands out colorful brochures full of tiny print that chronicles his accomplishments through three years in office. The list is a wonk’s delight. Day 355: “Battery production tax credit signed into law.” Day 417: “Counties allowed to absorb county road commissions.” Day 909: “Bill signed to allow funeral directors from neighboring states to practice in Michigan.”
What’s the most unexpected thing Snyder has had to learn? The governor answers immediately, with a laugh: “I had to study legislation on the appropriate age for petting bear cubs.” The matter arose last year, in a dispute over the practices of a petting zoo in Michigan’s Upper Peninsula. Snyder doesn’t appear to regard such minutiae as distractions or irritants — or beyond the scope of a limited government. Instead, he seems to embrace the challenge of thinking through problems as they arise. (For those who want to know: Snyder believes it’s safe to pet baby bears in captivity before they’re 36 weeks old and when they weigh less than 90 pounds.)
The governor also has pushed a few big ideas. Early on — Day 143, to be precise — he wiped out a complicated business tax that small-business owners had despised. “We called it the ‘Frankentax’ because it took the worst parts of every tax you could find and stitched them all together,” says Charlie Owens, director of the Michigan chapter of the National Federation of Independent Business. It amounted to a cut of $1.6 billion, but more important, it represented a major simplification. In the Tax Foundation’s state-by-state rankings of business-tax climate, Michigan leaped from No. 49 to No. 7. “This was one of the biggest reforms in business taxes in the last quarter-century,” says the foundation’s Joe Henchman.
In 2012 (on Day 711), Michigan became a right-to-work state — a startling achievement in the state perhaps more closely linked to Big Labor than any other. Yet Snyder was at best a bit player. The legislation arrived on his desk not because he had demanded it but because conservative legislators put it there. His boldest proposal may be to create 50,000 special visas for immigrants who agree to live and work in Detroit, in the belief that they would fuel the economy. In January, Snyder flew to Washington and urged Congress to include the measure as part of comprehensive immigration reform.
Ever the accountant, Snyder made the passing of timely budgets a priority, a goal that didn’t seem to concern his predecessor, Democrat Jennifer Granholm, even as it flummoxed local governments and school districts. Other fiscal moves are more suspect. Last year, he became one of just a handful of Republican governors to collaborate with the Obama administration on Medicaid expansion, adding nearly half a million people. In May, he signed a bill to boost the state’s minimum wage to $9.25 per hour. This was part of a gambit to keep an even more costly union-backed proposal off the ballot in November — a gambit that might in fact have worked, and that had the support of many business owners — but the reluctance to take a principled stand against a job-killing initiative was striking.
Snyder also wants to raise $1.2 billion in new road funding by hiking the state’s gas tax from 19 cents per gallon to 33 cents per gallon, apparently because there’s nothing to trim in the $53 billion budget he negotiated this spring. The condition of the roads is poor — polling suggests that after the economy, road repair is the top concern of voters — but the state is also giving $35 million to Warner Bros. so it will film Batman v. Superman: Dawn of Justice in Michigan. Snyder isn’t a big fan of the handouts to Hollywood, but the fact remains that the state budget is full of bloat. “Ideally, a government this large is plenty big enough to pay for good roads,” says Joseph Lehman, president of the Mackinac Center, a Michigan think tank. “We’re facing gas-tax increases now because lawmakers irresponsibly spent money on other things while the roads crumbled.”
Snyder’s biggest challenge has involved Detroit, whose recent history teaches that no matter how bad things are, they can still get worse. A toxic combustion of race riots, family breakdown, political corruption, and economic dislocation, spread across decades, has devastated a once-mighty city. Detroit’s long decline has seen its share of phony revivals, too. The entrance of the Globe Building offers a good view of Downtown’s best-known skyline prop, the glassy and cylindrical Renaissance Center, opened during the Dark Ages decay of the 1970s. Even so, it’s possible to think that Motor City really did hit rock bottom last year. In the spring of 2013, Snyder appointed Kevyn Orr as the city’s emergency manager. In the summer, Detroit filed for bankruptcy.
“This was not a new problem,” says Snyder. “We’re proposing a solution to 50 to 60 years of problems.” Couldn’t he just have ignored Detroit’s plight, as others, including the city’s own political leaders, had done? “That wouldn’t be me,” he says.
Working with Orr and others, Snyder assembled “the grand bargain,” a bailout plan for Detroit that seeks to ease unavoidable pension cuts and also protect the city-owned collection at the Detroit Institute of Arts from creditors who demand a fire sale. Philanthropies and corporations have agreed to contribute more than $450 million to the deal, with the state’s share coming to an additional $195 million. Some conservatives have grumbled about the arrangement, sensing a cash-for-clunkers rip-off. Snyder is unmoved: “We’re in problem-solving mode,” he says. “We’re in positive mode.” Legislators have approved the package, but so must Detroit’s pensioners as well as a bankruptcy court.
Snyder won’t say much about specific plans for a second term: “I want to continue the same things we’ve been doing.” Items high on any Michigan conservative’s wish list include the repeal of prevailing-wage laws that drive up the costs of public construction, making roads and schools more expensive for taxpayers by hundreds of millions of dollars. “That’s not something I’m looking at,” says the governor. He’s similarly noncommittal about new reforms to pensions for state employees, though he seems warmer to the subject: “I won’t pursue that in the near term, but people should continue to ask that question.”
This is different from the approach he took four years ago, when Michigan’s nerd reveled in the specificity of white papers. These days, he just wants to promote a sense of good feeling. In February, during the Super Bowl, his campaign ran a 60-second commercial that touted the state’s revival. A brief opening image, offered without explanation, showed Snyder in a black wetsuit, rising to the surface of a swimming pool. Casual viewers must have thought it weird. Those who puzzled over it for a moment or two probably got the point: After a long period of submersion, Michigan at last is coming up for air.