LANSING – As John Nixon prepares to take over the process of writing Michigan’s budget, moving from a state with one of the healthiest economies in the nation to the one that has struggled for a decade, Nixon said the state will have to ask fundamental questions of what its budget should do and what state government should be.
In a telephone interview with Gongwer News Service, Nixon – named Monday by Governor-elect Rick Snyder as budget director – also said he was attracted from his native state of Utah to Michigan because of the “amazing vision” Snyder has for the state. He also praised the team Snyder is assembling to help Michigan restore itself.
And he said in meeting with state residents and officials, it was clear the state was developing a new attitude and was determined to come out of its economic funk and turn itself around.
“It was not too long ago that Michigan was the economic powerhouse in the 1990s,” Nixon said, and it is ready to do that again.
The Monday announcement is just the first of several Snyder will make, with a Tuesday news conference scheduled to reveal more appointees as well as outline some of the structural changes he plans for state government.
Those restructuring plans will just be the first of an ongoing series of changes, sources said, and could include announcing changes in the state’s department structure.
In making the announcement, Utah Governor Gary Herbert said Nixon, that state’s executive director of Planning and Budget has “helped guide this state through arguably the most difficult budget cycles in decades. His knowledge and leadership are major factors as to why Utah’s economy is the envy of the nation.”
In his announcement, Snyder said Nixon is one of the best in the business.
Saying he had promised to deliver “value for money,” Snyder said Nixon will “work with us to bring fiscal responsibility, stability, transparency and the citizen’s priorities to state government.”
A number of people had been proposed to Snyder to be named as budget director, including former Senate Majority Leader Ken Sikkema (who was proposed by current Budget Director Bob Emerson).
Geralyn Lasher, who will be communications director for Snyder, said Nixon was one person proposed to Snyder and the governor-elect talked with him after the November 2 election.
Former Michigan treasurer and Meijer CEO Mark Murray, who is a vice-chair of Snyder’s transition team, said that while every state is different, Nixon has experience dealing with fundamental issues such as Medicaid, school funding and transportation that will make his experience valuable to Michigan.
With the appointment, Snyder now also has his two top financial aides named. He earlier named House Speaker Andy Dillon as treasurer.
Nixon has been the chief budget officer for the Beehive State since 2006, and will stay in that position through the end of the year. While preparing to come to Michigan, he is assisting Herbert in preparing for his budget presentation to that state’s legislature on December 10.
Since he has been budget director in Utah, the state has been named as one of the best managed in the nation. Mr. Nixon is also president of the National Association of State Budget Officers.
Utah has seen its economy suffer during the recession that slammed the nation in 2008, but much less severely than Michigan. For example, in October, Utah’s unemployment rate rose to 7.6 percent, up from 6.7 percent in October 2009.
Michigan’s unemployment rate fell in October to 12.8 percent from 13 percent.
Michigan is also a far larger state than Utah in terms of its overall population and economy. Utah had some 1.2 million people working in October while Michigan had 4.2 million people working.
Utah has also had to make a series of budget cuts over the last several years, and recent news reports said the state may have to consider using some of its budget stabilization fund to help shore up some programs.
But the state still has money left in its stabilization fund whereas Michigan was forced to effectively empty its fund years ago.
That leads to some of the fundamental questions the state will need to ask itself, Nixon said.
When the economic slowdown hit Utah, the state decided to make budget cuts instead of trying to first preserve programs through the use of its BSF, he said.
“We asked things like what are we doing that we shouldn’t be doing, what are we doing that is a luxury,” Nixon said.
Michigan seemed more to take an attitude that it needed to do things to get through the immediate crisis.
That did not mean that the state gives up on programs such as funding education and corrections and essential services, he said, but it needs to look at funding them differently. The state should also not be afraid to push back against the federal government on some issues and seek waivers, he said.
Part of Michigan’s approach may have stemmed from a cultural background born of the boom and bust economic cycles of past decades. But Mr. Nixon said it was clear from the people with whom he had spoken, as well as clear from the election results, that the public recognizes “it’s not going to be business as usual going forward.”
So many of the individuals with whom he has spoken said that they recognize Michigan has to make difficult choices, but that the situation the state now faces is winnable. Their mindset is I don’t care what we have to do to make it work, we’ll make it work, he said.
Utah now has a triple A bond rating, while Michigan has a double A-minus rating. In the 1990s and early part of the decade Michigan had a triple A rating, and Nixon said it was important to get that rating back.
Ultimately it was the challenge of leading Michigan’s budget that attracted him to leave the state he loves and the job he had found fulfilling.
He has not yet had a chance to talk in detail with Snyder about what he wants his first budget, which will be due by March 1, to reflect. He said several times the people elected Snyder, and he will work for Snyder and do as the new governor wants with the budget.
There have been no parameters set at this point on the budget, such as no tax increases or no cuts in certain areas, he said. His own view is that tax increases are “the absolute last thing you do, especially when the economy is suffering. But that does mean there will be tradeoffs.”
He said he had had a chance to talk to some people in the House Fiscal Agency, but not yet to putative House and Senate Appropriations Committee chairs, Rep. Chuck Moss (R-Birmingham) and Sen. Roger Kahn (R-Saginaw Twp.).
Though born in Idaho, Nixon is essentially a Utah native. He earned a bachelor’s degree in corporate finance from Brigham Young University and an MBA from the University of Utah. He worked in corporate finance and with a privately-held golf corporation before joining Utah government. He was the chief financial officer and deputy director of the state’s Department of Workforce Services before becoming that state’s budget director. He is married with six children.
While essentially a Utah native (he was born in Idaho), he does have some family connection to Michigan since his wife attended high school at the Interlochen Academy of the Arts. She and their six children are looking forward to the move and supportive of the challenge he will face, Nixon said.
He also said he is hoping to get some skiing in the mitten state. Since becoming budget director in Utah (where the 2011-12 budget will be presented on December 10), he has not been able to hit the slopes much. He hopes to in Michigan, though he said, “I understand it takes three or four runs there to equal one Utah run.”
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
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