Lansing Granholm buffeted over eight years; still optimistic Says she is proud of effort to diversify and restructure the state's economy

By Kathy Barks Hoffman

Associated Press

LANSING (AP) -- Jennifer Granholm swept into office eight years ago as a symbol of hope to many Michigan voters, a vibrant, charismatic woman who shone on the state and national stage with an engaging energy.

The Democratic governor never anticipated Michigan would go through a decade of job loss and years of shrinking budgets during her watch. But she'd do it all again if she had the chance.

"This has been the greatest privilege, the greatest job I have ever and will ever have," Michigan's first female governor said last week in her last year-end interview. Serving through crisis is "when your decisions have the greatest impact."

Despite a mere 35 percent approval rating this fall, Granholm said she's leaving office with solid accomplishments the state can celebrate.

Her effort to restructure and diversify the economy to rely less on building automobiles "is the thing I'm most proud of," she said, adding she also has encouraged more Michigan residents to realize a college degree is a better bet for the future than a factory job.

Michigan has created or retained more than 653,000 direct jobs in nearly 4,000 economic development projects during the past eight years, Granholm said, in part by focusing on new jobs in biosciences and advanced manufacturing and by encouraging more business start-ups.

The state also has sent 147,000 unemployed adults back to college to gain new skills in growing industries, such as health care, improved math and reading scores across the board and toughened high school curriculum standards so students graduate ready for college.

"The education effort that we have undertaken, the restructuring of our standards and our expectations, has been critical," said Granholm, who holds a degree from Harvard Law School.

Public schools have struggled on Granholm's watch, with state funding barely keeping up with inflation. Some education officials say the tougher graduation requirements are a good idea but shouldn't be one-size-fits-all.

Baldwin schools Superintendent Randy Howes said they aren't fair to students who are doing their best but aren't going to go on to get a four-year college degree.

"There should be a career pathway that doesn't give kids the message they're a failure if they can't do Algebra II," Howes said. "In some respects, they kind of went overboard on some of that stuff."

Michigan still has a long way to go to replace the nearly 1 million jobs lost between mid-2000 and the depth of the latest national recession. Its unemployment rate is heading down, but remains the nation's second-highest at 12.8 percent.

Granholm had hoped to double the state's college graduates in a decade, but university budget cuts resulted in average tuition rates growing 80 percent at the state's 15 universities during the past eight years. The governor also couldn't stop legislators from killing a popular college scholarship program that made those increases easier to bear.

Although frequently criticized by Republicans and even some Democrats, no one denies Granholm served during one of the toughest periods in Michigan's history.

A fresh face after 12 years of Republican Gov. John Engler, Granholm stepped from the attorney general's office to the governorship with little knowledge of how to deal with lawmakers or negotiate in Engler's hardball style.

Within weeks of taking office in 2003, the ugly reality set in: Michigan's struggling economy was pushing down revenues and moving the state into the red. Granholm dealt with that shortfall and later ones by cutting money for state programs, universities and local governments, and sometimes had to give less to public education.

Michigan's tightfistedness made it the only state in the country to shrink its general fund spending between 2001 and 2009, according to the National Association of State Budget Officers.

The share of the state budget paid for with state tax revenues dropped by about $1 billion during her eight years in office. Fierce budget fights often resulted in standoffs, including government shutdowns in 2007 and 2009, that led to voter disgust with Lansing.

But Granholm said lawmakers passed about 80 percent of proposals laid out in her eight State of the State addresses, even though Republicans controlled the Senate for her entire tenure and the House for half those years.

The 51-year-old governor also noted she was able to keep health care in place for most of Michigan's needy, as well as push through state minimum wage increases and a new tax credit for the working poor, despite the budget shortfalls.

She'll be handing Gov.-elect Rick Snyder a balanced budget Jan. 1, unlike the last three governors who left office. She encouraged him to restructure Michigan's taxes by lowering the sales tax and extending it to services, to stick with a business tax that provides stable revenue and to continue diversifying the economy.

Granholm doesn't see herself running for public office again, though at one point there was talk of amending the U.S. Constitution so the Canadian-born governor could run for president -- a time that seems like a distant memory these days.

She already has "a good idea" of what she'll be doing in her next job, but she's staying mum on that until January. Otherwise, she expects to get the margarita on the beach she has been looking forward to all year.

Granholm said she has grown during her difficult time as governor, and ends the eight years with her trademark optimism intact.

"We're going to have a more diverse economy, citizens are going to be more well-educated, we are going to have a much leaner government" as the state emerges from the recession, she said. "I'm extremely bullish on Michigan's future."

Published: Fri, Dec 17, 2010