Sept. 25 (Bloomberg) -- Rick Snyder, a first-time officeholder, became Michigan’s Republican governor in 2011 calling himself a nonpolitician. As if to prove it, he swiftly raised taxes on retirees.
“The first reaction was, ‘You want to do what?’” said Bill Rustem, Snyder’s strategy director, recalling the staff’s response when Snyder broached the idea. Still, making the elderly pay more helped the man who bills himself as “one tough nerd” lower business taxes by $1.7 billion, an 86 percent reduction.
A 54-year-old former venture capitalist, Snyder has avoided partisan warfare like Wisconsin Republican Scott Walker’s clash with unions or Kansas Governor Sam Brownback’s crusade against abortion. He’s worked with Democrats to help Detroit escape takeover. He’s driven an overhaul of government operations, and a Comerica Bank report yesterday showed Michigan’s economy is in its highest gear since November 2002.
Yet Snyder’s mantra of “relentless positive action” has yet to win him widespread popularity. Sixty-three percent of 1,015 Michigan adults rated his job performance “fair” or “poor” in a poll released Sept. 21 by Michigan State University. Snyder’s job approval rating has been as low as 19 percent, according to a December 2011 survey.
Democratic politicians say Snyder’s veneer of friendly technocracy hides a conservative core.
The governor’s ability to remake a state that led the U.S. in unemployment during the worst economic downturn since the Great Depression may yet provide a blueprint for bridging the partisan divide.
“Most people think Rick Snyder has broken the mold,” said Paul Welday, a Michigan Republican political consultant. “He’s impossible to fit into a box ideologically.”
Snyder and a Republican-dominated legislature have balanced budgets and rearranged taxes. They’ve cut education spending, business regulations, unemployment benefits, and retirement health benefits for public employees. The governor also allowed state managers in distressed cities to cancel union contracts.
Though Snyder followed Republican orthodoxy by cutting business taxes, he angered seniors, a potent voting bloc. Taxing pensions was justified because “it’s not fair that a 70-year-old woman working at Wal-Mart was paying income tax and a 50-year-old public retiree wasn’t,” Rustem said.
Snyder signed anti-bullying legislation that Republicans blocked for years, saying he was picked on as a youth. And he’s pushed for creating an insurance exchange to comply with President Barack Obama’s national health-care overhaul, which many fellow Republicans oppose.
He’s drawn less attention than more flamboyant ideologues, said Jessica Taylor, senior analyst for the Washington-based Rothenberg Political Report, a nonpartisan newsletter that covers congressional and gubernatorial elections.
“He’s keeping his head down,” Taylor said. “That’s not necessarily a bad thing. He’s doing what a governor is supposed to be doing.”
Public life has required navigating new obstacles, said Snyder, who was chairman and chief executive officer at North Sioux City, South Dakota-based Gateway Inc., a computer company acquired in 2007 by Acer Inc.
“In the private sector you have competitors,” Snyder said in an interview in his Lansing office. “In the public sector, you have people who just want to fight, and really treat you like an enemy. That’s not my approach.”
His approach isn’t universally praised.
Snyder’s elimination of a $1.5 billion deficit in an $8.3 billion general fund alienated voters who must pay more taxes, said Senate Democratic leader Gretchen Whitmer, 41, of East Lansing. She said Snyder has cut funding for schools, hurt collective bargaining for public employees and kowtowed to social conservatives by signing a law that bars benefits for unmarried partners of public employees.
“A lot of people who voted for him feel they were duped,” Whitmer said. “He’s a nice guy. Just because someone’s likable doesn’t mean you like what they do.”
On the opposite side of the spectrum, Snyder doesn’t embrace anti-government Tea Party followers. The feeling is mutual.
Snyder “is trying to grow government and spend more money, and that’s garbage to me,” said Marcus Pederson, 43, a Tea Party leader in Coldwater.
“He looks like a Republican, but he has a globalist mind,” said Ron Acton, 59, a Tea Party activist in Jackson, Michigan. In fact, Snyder has encouraged Congress to help foreigners with advanced technical degrees to remain in the U.S.
And Snyder, Acton said, is among “the 1 percent of the wealthy” who concoct financial schemes.
After Gateway, Snyder became a venture capitalist, a pursuit for which he was primed from youth. He said he studied finance as a 9-year-old reading Business Week magazine, and started stock trading at 11 with $1,000 from his parents. His growing portfolio helped pay for college and a down payment on a house. He earned both an MBA and law degree by 23 at the University of Michigan.
Snyder and his wife, Sue, were married in 1987 in a Presbyterian church in Dearborn, Michigan, her hometown. They have three children ages 23, 20 and 16. Snyder lives in his Ann Arbor home rather than the state-owned governor’s residence in Lansing.
The governor, who rarely wears a tie, spent $6.1 million of his own to get elected and accepted only $1 of his $159,000 salary his first year.
Driven by Cars
His term so far has been buoyed by a surge in sales and hiring by Detroit-based automakers since bailouts of General Motors Co. and Chrysler Group LLC and restructuring in 2009. Michigan ranked second behind North Dakota in economic health in the first quarter, according to the Bloomberg Economic Evaluation of States.
Michigan’s economic activity rose two points in July to 107.9 in Comerica’s Michigan Index, compared with an average of 103 points so far in 2012 and 12 points higher than in 2011. Michigan’s index has been helped by improved housing markets and U.S. vehicle sales, said Robert Dye, chief economist of Dallas-based Comerica.
Investors have favored the state’s debt. The interest-rate spread of Michigan’s bonds to top-rated debt has narrowed in the past two months, a sign they have more confidence in the state’s ability to repay. A Michigan general obligation bond maturing in December 2025 traded Sept. 24 at 0.26 percentage points above the benchmark. Two months earlier, the difference was 0.49 percentage points.
Snyder shrugs off Republican presidential candidate Mitt Romney’s opposition to the rescue of GM and Chrysler in 2009. Michigan has 133,700 jobs directly tied to the auto industry, according to the Center on Automotive Research in Ann Arbor.
“There’s way too much time spent on the auto bailout topic,” Snyder said. “It got done, it worked and we should be happy it worked.”
“I never get questions about the auto bailout from Michiganders,” he said. “They want to hear what we are doing to create better jobs today and tomorrow.”
Snyder said that as Michigan’s economy rebounds, he’s concerned about complacency and November ballot issues that would thwart his efforts. One referendum would enshrine collective-bargaining rights in the state constitution and another would require a two-thirds vote of the legislature to raise taxes.
“I’ve seen this before,” Snyder said. “We’d come out of a recession and people would go back to the same old habits of doing things. We’re really reinventing Michigan for a long-term pattern of success.”
“I don’t worry about saying I accomplished anything,” he said. “Relentless positive action means no blame, no credit, just coming to solve problems.”
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