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- [00:00]
A
To watch episodes of financial Audit a week earlier, check us out on YouTube. Ladies and gentlemen, special episode today with the governor of Michigan. I'm going to be auditing the state's finances. But quick little introduction to say, hey, this is the day before election day across the country. Make sure you take advantage of your right to vote. Get out there, vote. Lots of state and local elections, and I think one federal election for a special congressional run here in Texas. Just make sure you get out there and vote. Enjoy the episode.
- [00:27]
B
You gotta use tariffs like a scalpel, not a sledgehammer to ever think.
- [00:30]
A
Political talking point. I've never heard one of those in person. That's wild. Food stamps, let's just say, or food assistance. Have we set up our systems? In a way, we're also just discouraging people from going out there and being contributors. You know, this is the part of the show where I usually go through the spending and it's like, we got some bull spending in there. We got some taquitos. Yeah, you're stopping in the gas station. Get yourself some off. Political extremism, it's scary. What do you think is going on with political extremism right now? And how would you solve it?
- [00:58]
B
Your blood got thin moving down south, didn't it?
- [01:02]
A
Sign up for the new and improved Dollar Wise budgeting app. Take the free trial and if you like it, sign up for the annual version to save a ton of money and get my budget friendly cookbook signed by me and mailed directly to you. And for a limited time only. If you want to bundle all of my educational programs together with the budget app, join Dollar Wise Central and save 80%. Take the trial and learn more@dollarwise.com.
- [01:23]
B
Hi, I'm Gretchen Whitmer. I'm the governor of Michigan and this is financial audit.
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A
This is crazy.
- [01:31]
B
What?
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A
This is just so weird. The governor of my home state and we're doing an audit on the home state and talking some more things. This is crazy.
- [01:42]
B
I know. I'm so glad to be with you. I appreciate all the. All the things you do.
- [01:46]
A
Really.
- [01:47]
B
I mean, right now. We'll see how I feel in 16 years.
- [01:49]
A
You know, people. People on the left call me a fascist. So you saying that as a Democratic governor who's gonna be the Democratic nominee for president at some point. Definitely. Definitely not running, though. Anyway, it is really good to hear that. I'm not a fascist anymore.
- [02:06]
B
Listen, you know what? Everyone's got opinions right now. I'm not gonna pay attention to any of that. No. Money's for important. For what you think what you do is important.
- [02:15]
A
Yeah. Well, thank you. I really do appreciate that. And you know, and when it comes to actually like extremism and divisiveness, I would love to hear your opinion on that towards. But you know, I'd love to start with kind of Michigan finances in general, just kind of what the state looks like. Then do some Michigan policies and then some national ones. Cause, you know, at some point national might be involved in this conversation with you.
- [02:39]
B
Let's go.
- [02:40]
A
We'll see. I want to start though. So Michigan, 10th most populous state, pretty big economy. You know, it is a major state. It's an important state in the world of politics. You know, it's gone Trump twice. It went anti Trump once. Right?
- [02:53]
B
Yeah. For.
- [02:53]
A
It went Biden. So, you know, it's very important. We were discussing beforehand, you don't like the term rust belt because it feels like it's done. But you know, that's a very important, like mega region. United States, you know, the Midwest, it's the most populous megalopolis. So it's very important and kind of how states are doing there and how they're running their economies, how their economies are doing, how the state governments are overall working, I think kind of sets a precedent for how many other states around the country do.
- [03:22]
B
Yeah.
- [03:23]
A
So I want to know first, we'll get into some of the numbers. But when you look at the state budget, when you sign a budget into law, when you advocate for certain things, what are some of the primary things you're thinking of when it comes to revenue collection, when it comes to where we're distributing revenue, what are key priorities for you? What are we hyper focused on?
- [03:42]
B
So when we think about making sure that anyone can come to Michigan and build the life they want, that's really the North Star. That is who we are. You know, people came to Michigan from around the world for a job in the auto industry. Well, I left decades ago. I know. Well, it's time for you to come home. A little cold, but. Oh, you got weak, huh? Anyway, sorry.
- [04:04]
A
Continue.
- [04:05]
B
You know, people came from around the world to Michigan to get into the middle class. You could get a job on the line. You didn't even have to go to any schooling beyond high school. And you could get in the middle class, afford a second home up north on the lake. I mean, it was a great quality of life. It's why we've got such a rich diversity. It's why we've been the center of manufacturing for a long time. And that's a great strength. But we know manufacturing is changing, right? The whole world is changing rapidly. And so as we think about making sure that Michigan stays competitive so that we've got the resources to invest in our people, making sure that we've got the skill sets that are necessary for advanced manufacturing jobs, jobs of the future, making sure that we're investing in places so that there are cool places for people to live and that we're landing projects, competitive world. We have to out compete other states, we have to out compete other countries to get big investment that leads to good paying jobs. And right now, I think we've done a lot of good things in Michigan. It's tenuous. With the tariff chaos that we're all navigating this week ushers in another new era of Trump tariffs.
- [05:10]
A
World leaders are trying to figure out how to respond to President Trump's attempt to reshape the global economy.
- [05:14]
B
Columbus, Michigan have four farmers feeding the state.
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A
But this year there's a new stressor. Tariffs, tariffs, tariffs. These tariffs are starting to take a bite.
- [05:23]
B
New tariffs on many items, toys, furniture.
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A
Smartphones, just about everything you can think.
- [05:28]
B
Of that comes from another country.
- [05:30]
A
You're going to end up paying more for it.
- [05:31]
B
We feel it more hard, you know, more difficult in Michigan because of agriculture and advanced manufacturing, specifically autos. We're more sensitive to the tariff nonsense. And so I think that's a major concern on my mind right now.
- [05:45]
A
And I do have a question about the tariff. I mean, we can. Well, actually, I'll jump into that. That kind of goes into the Michigan politics, you know, side of things. When it came to NAFTA, projected we lost manufacturing jobs in Michigan of about 44,000 by 2010, 112,000 by 2018, with, with even expanding into more Chinese trade. And Michigan lost, you know, potentially upwards of 231,000 jobs since NAFTA was enacted. Manufacturing jobs losing about 21.3%. Now, Trump's trade wars or deals that he's trying to do, you know, they tend to be more nationalistic, they tend to be more protective. If Michigan specifically has lost 21%, you know, I do tend to like a good mixture of globalism and then some, you know, patriotism, nationalistic, you know, I think there's a good hybrid to be done. But in general, the political left does tend to be more globalistic right now. Stereotypically right, oversimplifying. And the right tends to be more nationalistic. Wouldn't you, of the Rust Belt, sorry, state of Michigan, that lost 21 1% in those sectors be more in favor of something that's a bit more protectionist?
- [06:58]
B
Well, yes and no. You gotta be really smart, right? You gotta use tariffs like a scalpel, not a sledgehammer. It's not the answer to everything.
- [07:05]
A
Political talking point. I've never heard one of those in person. That's wild. That's wild.
- [07:10]
B
It's true. I mean, you gotta be really thoughtful about it. Tariffs have their place, for sure. We've always had, you know, some sort of a tariff scheme because we can compete, we can outcompete anyone on a level playing field. But there are a lot of countries that aren't playing on a level. Yes, we can.
- [07:23]
A
On a level for price. Our price of labor is substantially more expensive in the United States.
- [07:29]
B
When you look at quality, when you look at efficiency, yes, we can, but we gotta have a level playing field. And because of so many decisions that have made over many decades, we know that our North American auto industry relies on parts that are going back and forth over the Ambassador Bridge in Detroit to Windsor, Canada, seven, eight times a day for parts. I mean, this trade is really important. We've built it in. Trump, negotiated the USMCA or whatever you want to call it, depending on which country you're in. They all call it something different because they want their own country to start first. I totally, wholeheartedly want us to onshore and bring as much manufacturing to the shores of the United States. By the same token, very sober about who our allies are and who's really been a part of our, our growth and what we've required manufacturing to rely on. You can't set up a plant overnight. It takes years. These companies make decades, investments, decades on the front end. And so it's manufacturing is just different than almost any other type of commerce that we have. And that's why it needs to be used as a scalpel, not a sledgehammer.
- [08:40]
A
You know, that certainly makes sense from the perspective of whatever political party we're leaning from and everything like that. I will say I just want to start out of the gate for my audience, even though people on, like the far left call me a fascist and stuff. We were even talking about this before, like, I took out of just pure curiosity when people were putting me in political camps, political tests, like a week ago, and I'm aggressively, boringly, but obnoxiously centrist. Like that fancy. That fence is going right through my. Out my mouth. It is brutal. I apologize, Governor.
- [09:12]
B
That's a visual. Thank you.
- [09:13]
A
It is, but I'm an obnoxious fence sitter. You know, one of the more controversial, not controversial things, but because you talked about it, you know, a plant doesn't get set up overnight, right?
- [09:25]
B
Yep. You've done a lot of research. You got a lot there.
- [09:28]
A
Well, you know, this is exciting. You know, a part of the spending that kind of comes out of the state could be more incentive type spending, but we're talking like the Blue Oval Battery Park. That incentive package was cut from 1.03 billion to 409 million. You know, and if we're thinking about plants being set up overnight, you know, this is one of the more controversial things that was done from the state government perspective, and that was projected jobs from 2500 down to 1700. And then the state pulled a separate $100 million grant tied to lighting reductions there. And then there was the make it in Michigan, you know, billion dollars on 5 EV battery related projects pledged there. You know, where we're choosing to put the money that obviously other people are making and whatnot. And then we're kind of reducing some of the incentive packages we're doing to certain plans. And like you said, it's not an overnight thing when they get in there. You know, what is your thoughts on that in terms of where we're putting the money to help businesses actually relocate to other states, Especially when we're kind of slashing and then saying, no, it's gonna go into five EV battery plants? You know, I'd love to hear your perspective.
- [10:43]
B
I think when you talk about autos, you know, there's no question that the technology is changing and evolving and we're getting smarter, we're getting cleaner. That's a good thing. Right? And under the Biden administration, they had a lot of incentives and they we saw a huge amount of investment that was being contemplated or begun in this country during the Biden administration. Now with the Trump administration, a lot of things are getting pulled back and business is nervous. Right. You know as well as I know, when there is an uncertain strategy, when the rules keep changing, what happens in uncertainty, it's paralysis. Right? You stop spending, you pull back, you wait to see is the dust gonna settle and we're gonna make these billions of dollars of investments. And so one of the things we know, though, as more electric vehicles come online, as we build up the grid and support people being able to travel with an electric vehicle, where the batteries are built is going to be the center of gravity because they're going to be the heaviest component in the car. And so battery Plants are really important to Michigan as we think about the long term dominance in mobility. We are currently the home of R and D for almost every auto company on the planet.
- [11:59]
A
Michigan loves them cars.
- [12:01]
B
Yeah. But we've got to also be able to be the place where they can build batteries. They got the expertise and the concentration of, of assets in Michigan. And that's why, you know, really getting aggressive around that space has been important.
- [12:13]
A
For us, which I mean I can certainly vibe with. But you know, as like the CEO of the state. Right. And we're thinking about what CEOs are doing right now. 87% of CEOs in Michigan expect a weaker overall state economy looking over the next decade.
- [12:27]
B
Yeah, well, there's no question that when you look at right now, what's happening. There are a lot of very, you know, troubling, troubling signs about what's happening in the economy. And I think a lot of it stems from the unpredictability of the tariff network and policies right now coming out of D.C. i just, it's challenging and I've been, I have been advocating with the President, with his cabinet, with folks in Washington D.C. i mean, I go no matter who's in office, because my job. You hid your face well. I wasn't there for that particular press conference. But.
- [13:03]
A
That was very funny. That was very funny, wasn't it? I mean, come on, that was great.
- [13:07]
B
Yes. I can laugh at it now.
- [13:08]
A
Yes, yes, yes.
- [13:09]
B
But you know, my job is I'm the governor of Michigan. I gotta show up and fight for the people of Michigan and the Michigan economy. And that's really what I'm doing when I'm trying to set the table, when I'm trying to make sure that our people have skills and that you understand, you know, how to have personal finance, you know, passing a law so that we are arming our people with information so they can make good choices and make the build the lives that they want. All of these things are related and.
- [13:37]
A
I am very excited to talk about that one because that is something I've advocated for for these past three years. But I do want to talk about again the state of Michigan first. Sorry, I get distracted into rabbit holes way too easily. So, outstanding debt for the state of Michigan, $6.925 billion by the end of last year. Now we're looking at 2024's financials because I believe 2024 to 2025 financials for the state of Michigan just closed out this month or last month, if I'm not mistaken. However, good news, that debt went down $300 million or 4.2% year over year. Go bonded debt, $691.2 million. But then, you know, the vast majority of that 6.9 is revenue dedicated from transportation and state building authority. And then the government itself does have lease commitments of $729.4 million in general. Then there is MDOT capital commitments, year end, 3.3 billion. How do you feel about the debt of the state of Michigan? I mean, 4.2% paid off year over year. You know, if you were a guest on the show, you know, I wouldn't be screaming too much at that. That's. That's pretty okay, you know, that's pretty chill. That's progress.
- [14:48]
B
We've paid off a lot of debt and I'm proud of that. I think that that's really important. One of the things that states can't do, like the federal government does, is run deficits. Right? Borrow money. Like we, we can't do that. We've gotta have a balanced budget. I have had a balanced bipartisan budget every year that I've been governor. I've been to Wall street to meet with rating. We secured an upgrade in our bond rating.
- [15:11]
A
Aaa. Right.
- [15:11]
B
These are double A I think right now. But you know, that was an upgrade from where we were. And so I think it's important to have our fiscal house in order. It impacts everything that we're trying to do. So we take that very seriously. It's not sexy to most, but I'm glad that you find it exciting.
- [15:29]
A
Oh, it's. Yeah. No, I'm gooning over here. Do you know what gooning is?
- [15:33]
B
You know what? I actually was just hearing about gooning.
- [15:36]
A
Really? From who?
- [15:38]
B
Where?
- [15:38]
A
The lieutenant governor.
- [15:40]
B
Whoa.
- [15:41]
A
I don't know. Is that a controversial thing?
- [15:43]
B
Where was it? I was. I don't know. I had something on television.
- [15:48]
A
They're talking about gooning on tv. That sounds right.
- [15:52]
B
You were talking to a guy who was spending his money on spicy media, but you withdrew.
- [15:58]
A
What is this adding up to? About 700. Would you say $700 in cash?
- [16:02]
B
That's a lot.
- [16:05]
A
I can't think of anything. Not strippers.
- [16:07]
B
No, no, he doesn't do that anymore.
- [16:09]
A
No, I just stay at home all day. Really?
- [16:11]
B
He really doesn't go anywhere.
- [16:12]
A
It's expensive gooning. It's a smoking gooning. Now if I saw that in the governor, the government's books, some only purchases, I'd be a little concerned. They're not there, are they? As we Go through here.
- [16:22]
B
Is that what you were talking about when you were saying he was gooning. Right.
- [16:25]
A
Probably. Yeah. He probably had that of.
- [16:27]
B
So educate your listeners who are not as cool as you goning.
- [16:33]
A
Endless permanent never finishes.
- [16:39]
B
I appreciate.
- [16:39]
A
I apologize, press secretary. I apologize. I like I keep seeing her there. I'm judging on her facial rights.
- [16:46]
B
Yes, it was your show. Thank you for educating me, Caleb.
- [16:49]
A
One thing that is a slight concern though, there is the. If we look at the overall the net position.
- [16:58]
B
Yeah.
- [16:58]
A
Of the state of Michigan, it is still negative $1.3 billion. Now that's like assets owned and then commitments. That is required spending. So yes, we're running a surplus or at least we're, you know, breaking even. But overall in general we are still in a negative net position. So negative net worth essentially for translating from someone's household to the government of Michigan. How do we feel about that? Let's talk about student loans. I know it's something we all avoid talking about, but if your private student loans are crushing you, why Refi might be exactly what you need. They don't rely on your credit score alone. They look for borrowers who have the desire and the ability to repay. That is a game changer in a market where most lenders only see a number interest rates under 6% guaranteed. That's practically a unicorn in student lending. Plus they offer structured payment plans to lower your monthly bill and even a co center release program so your mom and dad can step off the hook. Yrefi is known for their personal service. No faceless call centers. You get a dedicated rep who actually cares about your progress. They've got a 4.6 star rating on Google which tells you people genuinely like working with them. So if your private student loans are burying you and it is time to reach out, why Refi wants to help you climb out of debt, not push you further into it. Check them out@y refi.com hammer that is y r e f y.com hammer or call 889-733-978 that is triple 897-33978. Break free from the high interest trap and get your finances under control once and for all.
- [18:40]
B
Well, it's. I don't love it. I don't love the fact that we've built a budget based on some expectations from the federal government that right now with the shutdown we don't know what is going to happen and what's not going to happen. We've got a lot of folks who get food benefits from the feds. That the money's not coming in. So, I mean, this is, I think, a really lousy position to be in what we can control. We try to make sure that we get our budgets done on time and that they're balanced, but there are a lot of things that we can't control. And so we've got to have enough flexibility to make decisions along the way in our budgets.
- [19:16]
A
And when it comes to spending, Health and human services is $35.57 billion, or 44% of the spending in the state of Michigan. If we're talking food stamps, let's just say. Or food assistance. You know, I was. I used to be. I mean, I still am. I want people to have assistance who need assistance, especially those that fall back. It's a safety net, right?
- [19:36]
B
Yep.
- [19:37]
A
Safety. I've had so many people on this show now, and I know we get the worst of the worst. It is not you. I'm sorry. Like, your personal finances are probably okay.
- [19:45]
B
Yeah, they're in pretty good shape.
- [19:47]
A
Nice. Okay. So. But I've had so many people on the show where they are specifically choosing to not go work more hours because then they'll be taking off benefits. And I'm wondering, even though I want to support people who fall on hard times, obviously, because they're human beings.
- [20:02]
B
Yeah.
- [20:03]
A
Have we set up our systems in a way, let's say the state of Michigan, where we're also just discouraging people from going out there and being contributors?
- [20:11]
B
Yeah. Well, that. That is an obscene and, I think, rare example of where the system is not perfect. Right. That we want people. We want to incentivize work. We want people to be gainfully employed and not reliant on state funding. But we recognize that there are a lot of people who right now are struggling to just take care of their daily needs, their family's needs. So that's why this is important. I understand that you've had people suggest that you could move to Michigan and get some benefits that you can't get elsewhere. That's just not true. And I wanted to go out of my way to address that. Okay.
- [20:44]
A
Wow.
- [20:45]
B
Okay. Because, you know, we're all playing by the same federal rules, and so every state should be the same on those fronts. You know, we have different interpretations, different applications. Some of us make it easier to apply, et cetera. But I think that that's something worth worth highlighting.
- [21:03]
A
Now, my big concern when I look through the finances of state of Michigan is the funding ratio for the pension.
- [21:08]
B
Michigan's next budget is on Governor Gretchen Whitmer's desk. And a primary focus of the budget.
- [21:13]
A
As it always is, is public education.
- [21:16]
B
The move in the lame duck session is aimed at bringing greater financial stability to troubled districts. This is much less than the last fiscal year. We're talking about an unfunded liability of about $27 billion. But a good chunk of that doesn't make it to the classroom. The state ranks 44th in the nation when it comes to starting pay. The average starting salary for Michigan teachers was $41,645. That's around $4,800 less than the national average. There's not a lot of economic incentive to pursue a career in teaching. The budgeting could result in layoffs in the upcoming year.
- [21:51]
A
We're talking 74.83 is adequately funded for what is needed to fund for the entire state pension. I would love to hear your perspective on this. Now, I will give a W. That's gone up from 66.3% last year to 74% this year, but that is still very far away from mandatory. That needs to be handed out. And honestly, the gain has only been caught up through market recovery.
- [22:19]
B
Yeah, well, you know, we've got a state treasurer, Rachel Eubanks, who I think does a fantastic job. We've made a lot of headway on whether it's paying down debt or increasing our rating. But, you know, there still is more work to do. There's no question. I mean, pensions have been an important tool in getting people to go into public service.
- [22:39]
A
Yes.
- [22:40]
B
And we saw with the Detroit bankruptcy about 10 years ago that all the pensioners ended up not getting fully what they expected to when they worked for, like the city of Detroit for as many years as they did. So these pension systems are, are, can be unwieldy, but it's. We have a duty to, to fund them.
- [22:59]
A
Sure. I mean, the pension system being $24.4 billion underwater is five times the annual K through 12 school aid fund contribution. So it's going to take a long time to close the gap. And then also with a retiree to active ratio of one to three, it's a little scary. What would you do to fix it?
- [23:17]
B
What do you, you know, I'm curious. I know you've done a ton of research here. Where do you, how do we, what are you seeing things that other states are doing that we should be, that we should learn from?
- [23:27]
A
You know, I'll be honest. I was just pulling data from the state of Michigan and hyper focusing on state of Michigan because even when it comes to a lot of the guests on the show, I try not to sit there and endlessly compare them to other people. Right. I take a look at their situation. I'm like, okay, here's things that aren't good. What can we do to fix it? Now, fixing a pension, that is not my expertise. But I would absolutely love to hear, you know, kind of what you would do if you had the dictatorial stamp in the state of Michigan. How would you fix this pension underfunding ratio?
- [23:56]
B
Well, at the end of the day, right, I don't get to have a dictatorial ability to fix every problem that I see. And I think that's not how it should be, frankly. I gotta work with the legislature to have policies that make sense that everyone can live with. And right now I've got a Republican House and a Democratic controlled Senate. I think that we did a lot of good things in this last budget that we got done. Whether it is cutting taxes on overtime and tips like the House Republican leadership wanted to do. It's similar to what President Trump has done on the national level, or it is investing in kids and newborn health, that was a Senate priority. We got a lot of good stuff done, but there's always going to be additional work to do to shore up as we think long term, especially as we've got so many public servants who are aging and are going to be relying on this. So how can I fix it overnight? I can't fix it overnight.
- [24:56]
A
Not overnight.
- [24:57]
B
I recognize that it's an important part of a long term solution that we got to continue to strive toward.
- [25:04]
A
Well, what is the steps to put in for the long term solution though, to fix the pension? Want to know a dirty little secret? And no, I'm not starting an only you're not broke because you suck with money. You just can't see where it's going. If your bank account is empty at the end of every month, that is not bad luck. That is bad tracking. And it's exactly why I use Dollarwise. It shows you exactly where your money's going every single month. Spending subscriptions and savings all in one simple dashboard. Everything you need and nothing you don't. And when you download Dollarwise Today, you'll get six to try for free, plus three months for just $9.99 so you can finally take control and see what your money's been doing behind your back. Click below to get started.
- [25:47]
B
Well, first, as you said, you know, we're in a stronger position than we were and a lot of that's been driven by the market, so we'll take it. Right. But how do we ensure that we're putting more resources in? We've got our mipsers, which is our school employees retirement that is going to be coming offline in a few years because we're paying, we're getting up to full funding there. And so that is one additional, a mechanism that we'll have to put toward additional retirement dollars.
- [26:17]
A
So my concern when it comes to, you know, I know that's not a retirement plan for everyone in Michigan, it's, you know, the employees for the state. But when it comes to, especially on the federal level, entitlement programs that are put in, I'm a big fan a lot of the concept of a lot of them. But one thing that we at least find within the last a hundred years, if a big entitlement is put in, it's impossible to get rid of. And my fear with, you know, like a pension plan like this is it's so attached, you know, people are going to be very patriotic about it who are, you know, state employees. But if it is not a sustainable system, it's going to be borderline impossible to tweak in a significant enough way to change it or even get rid of kind of like Social Security. It's not going to work for my generation. I'm going to get a substantially less amount of money and that sucks. And it's going to be much more on the level of a literal Ponzi. It's not right now because right now, you know, money coming in, it's not fully dependent on money coming in. By the time I retire, it's gonna be fully dependent on money coming in. So that, that's what makes me nervous about like the pension system.
- [27:21]
B
Well, I think to be clear, you know, no, people aren't getting pensions now. Right. Like this is not a long term issue that we're seeing continuous, you know, continued in terms of policy. Previous governors and legislators got into the pension system. I'm not.
- [27:40]
A
Yeah.
- [27:41]
B
And I've been doing this for 25 years, so.
- [27:43]
A
Well, you're going to be president, so we don't have to worry about it.
- [27:46]
B
Well, we're phasing out is what I'm saying. So as you think about, like, how is this sustainable over the long run? It's not going to be as big an issue for us in the long run because it's not available to people.
- [27:56]
A
That's Good. Now spending 44% goes to Health and Human Services, as we said, 31% to education, transportation, 6.8%. And I know that was a big thing for you. I remember fix the damn roads when I still lived there. Yes, sir. 4.3% to the general government public and safety corrections, 3.81%. I assume most of public safety is locally funded. Revenue sharing, 1.67 billion tax credits, 1.46. And I do have a little bit, you know, to talk about that as we continue to go through this, and then just some smaller ones in general and then, you know, when it comes in. And I would love to actually learn more about this when it comes to the revenue and we got operational grants is $33 billion. General tax is 21 billion. Education, 16 billion. On transportation, 3.7 billion go into operating grants. I love to kind of learn a little bit more about that personally. You know, as I was sitting there thinking about how revenue is collected from.
- [28:51]
B
The state operating grants, where do I mean, do you have a specific department question?
- [28:57]
A
Well, as we were just pulling in, like where the money is coming into the state, a big chunk, operational grants, you know, maybe through everything I was pulling from the state's websites, it just wasn't specific enough. But I was like, what is this? I'm so curious. Maybe she could answer it for me.
- [29:13]
B
Yeah, I'm going to. I don't want to. I don't want to guess off the top of my head and be wrong, but fair enough. Government activity, revenues, totally good. It just. It. Yeah, it could be a variety of things. It's probably a lot of a variety of things.
- [29:31]
A
And we already talked about the net position, but when it comes to the school aid fund, that is a balance, but it is restricted for education of $4.45 billion. What's interesting about this, and I'd love to hear your perspective, is there's controversial things that are funding a big part of it. They got weed, you know, which is interesting. I was much more in favor of legalization many years ago, but so many studies have been coming out these last few years about just kind of overall effects on people. Less. Less. It's not like, you know, shaky dependency, but many things you do when you smoke every day are no longer as enjoyable when you stop smoking, you know, and just some overall health effects. I mean, if you're putting things in your lungs in general, it's usually not great for you.
- [30:13]
B
The state released its annual marijuana tax revenue totals yesterday.
- [30:16]
A
$270 million. Mainly because of the marijuana dollars. We've got about a million dollars of work planned just in road improvements outside The State Capitol, supporters of the cannabis industry gathered to fight A proposed 24% tax on marijuana.
- [30:31]
B
A 24% wholesale tax on marijuana is set to begin in January, part of a long term plan to fund road construction in the state budget.
- [30:39]
A
Over the last few years, the city's been able to take a much more aggressive approach in repairing them. Filling in the potholes.
- [30:46]
B
Thanks to pot taxes, the $42 million in revenue comes from just from recreational sales and is being split among communities that allow these sales, thanks to Michigan's Taxation of Marijuana act.
- [30:59]
A
So there is that. That brings in $33.1 million. Then there's sports betting and IGAME combined gross receipts, 2.86 to $2.9 billion. But the state taxes and fees is 466. There's a lot of dependency issues, especially on gambling and things like that. How do you feel that so much of school is being funded through blazing it up and going and blowing all that money?
- [31:21]
B
Yeah, well, you know what, I don't love that we see a lot of gaming funding our schools, et cetera. But at the end of the day, people are engaging in the conduct and every state taxes it and operates budgets based on whatever taxes they collect. Our sales taxes also help fund our schools. Our sales taxes are lower than they are here in Texas, so. But we don't have income to make up what the difference is. Right. Like there are legislatures and governors passed, have selected different things to include in the school aid fund. It's not like I came into office and said, all right, this is how we're gonna start doing it. But you gotta recognize that sin taxes are always easiest taxes for legislators to take votes on. And that's generally why we see them continuing to fund things like schools and everything else in state government.
- [32:15]
A
Well, people would say and advocate for it that it hurts the lower income the most.
- [32:20]
B
There's not. Yeah, that's not wrong.
- [32:23]
A
Yeah.
- [32:23]
B
And yet I think that that's one piece of the education budget, but by and large it's about a fourth. It's 2 cents out of our 6 cent sales tax goes to our schools too.
- [32:34]
A
Yeah. Okay. And then as we continue there, the school stabilization fund is $1.3 billion. So I mean, the overall school funding tends to look relatively healthy, but there is a lot of kind of restricted spending. So 1.3 is stabilization and countercyclical of 477 million, but 4.46 is restricted into education, which I think is good. At least we're not going in and tapping it.
- [32:59]
B
Right, right. Well, we just created that in the last two years. Stabilization fund. Because I know it's important that you've got, like, a savings fund in case some unforeseen thing happens and who. God only knows. Right. Like the last seven years, if they've taught me anything, is that there could be some new thing around the bend that you're not anticipating. So we've got a rainy day fund or budget st. Utilization fund for the rest of the budget. I wanted to create one for schools because I think it's really important that we've got additional resources, so.
- [33:26]
A
And that's what's next.
- [33:27]
B
Yeah.
- [33:27]
A
This is a good chart.
- [33:28]
B
What's that?
- [33:29]
A
This is a good chart.
- [33:29]
B
The rating. Yeah.
- [33:31]
A
See, it's only going up. Covid took a little bit.
- [33:34]
B
It was hard.
- [33:35]
A
Yeah, it was a little. I'll be honest, I was a little annoyed when I came home for Christmas. Two years in a row.
- [33:42]
B
Yeah.
- [33:42]
A
Like, we had to eat outside, but we were in inside pods outside. It was a little weird that I came back here and then I could just do whatever. Well, that was a bit weird, I'll be honest.
- [33:54]
B
But remember what the temperature was here. You can walk around outside all day right? At home in Michigan in winter, we're all inside breathing on each other.
- [34:04]
A
But if I was allowed to be inside outside, why couldn't I just be inside inside?
- [34:08]
B
Because you were inside outside with just.
- [34:10]
A
Your small group of people and the servers and bussers.
- [34:15]
B
Listen, Caleb, none of us wants to go back and relive that we were doing the best we could with very little or very bad information.
- [34:21]
A
I'll accept it. I just remember being a little annoyed.
- [34:23]
B
I'm sure.
- [34:24]
A
And it was cold, too. Like, what the are people doing? Why the. It's so cold? What are we doing? Like, you.
- [34:32]
B
You. Your blood got thin moving down south, didn't it?
- [34:34]
A
Well, now I hate the summers, so it's fair, you know, I. Do.
- [34:38]
B
I.
- [34:38]
A
They're. They're. Yeah. I'd like to get a place up there again on Gull Lake at some point in retirement. I love Gull Lake. I used to think razor burns were just the cost of shaving. Like, irritation and bumps are just how it works, right? So I kept trying to fix it with fancier creams, cold towels, better prep. But it turns out I wasn't solving anything. I was just managing damage with expensive blades that dull fast and cost way too much. And then I tried. Henson. This razor isn't trying to be flashy. It's just engineered better. It's a single Blade precision designed to stop tugging, pulling, and that post shave fire you've been pretending isn't a problem. My skin is calmer with no bumps. And for once I didn't need more products, just the right tool. So if your current Razer routine feels like a string of workarounds, maybe it's time to upgrade to something that actually works. Check out Henson at the link below. It is one of those rare swaps that saves your skin and your wallet. Get 100 free blades with the purchase of a razor that is over two years worth. Let's get back to the show. Personal tax rate There was a 2023 drop to 4.05%, but that was brought back up to 4.25% and the Supreme Court denied an appeal on August 30 of last. Were you more of a proponent of keeping it at 4.05 or moving it back to that 4.25?
- [35:53]
B
I was a proponent of following the law which said I had to go back up to 4.25.
- [35:57]
A
Okay, if you were able to pass a law to bring it back down to four, would you.
- [36:02]
B
If someone could tell me how we're going to fund the things that we need to fund, would you cut back.
- [36:06]
A
On anything in order to fund that?
- [36:07]
B
I think we've made a lot of hard cuts recently. So before I would agree to take more important resources out of our budget, I'd want to know where people think they're coming from. Part of the. But the hardship of being in this spot is the other day I gotta make sure the book's balanced, right? And so it angers some people on my left. It angers some people on my right when say, no, I don't wanna look at that tax cut unless you got a solution for me. And no, I'm not gonna look at the spending unless you tell me where the money's coming from.
- [36:36]
A
I'm curious if, like, if this was me and my obnoxious middle and this was the. What? What was that? This was the right and this is the left. And let's say Bernie and Mondami are right here. Where are you?
- [36:51]
B
It depends on who you ask. But I think you. I, I mean, I think I'm. I'm closer to the middle.
- [36:56]
A
Well, when I still live there and you're going through the primary, there was a dude with like, I think, like a fake toupee.
- [37:01]
B
Oh, yeah.
- [37:02]
A
Kind of guy. I think he's in Congress now, but he was like the progressive, you know, far left running. And then you were the More center.
- [37:07]
B
He and Abdul El Sayed. Yes. Were both. Oh, yes, way on the yes. But then it kind of irritated me at the beginning, to tell you the truth, because I'm proud to be a very progressive former legislator with the receipts, right. Like I'd been in the legislature. I took lots of votes, I had an agenda. And two guys who never ran for anything ran and took all these positions and tried to make me look like I wasn't really a good Democrat. And you know what, it irritated me at the beginning, but they actually probably did me a favor because I think more people were open to hearing me out and that's probably how I won.
- [37:44]
A
But can you beat Gavin Newsom in Michigan?
- [37:47]
B
Yeah, I could beat anyone in Michigan.
- [37:50]
A
Fair enough. Now, one of the big percentages that money does go to, if we're bringing taxes, you know, legally up from 4.5 to 4.25, there is the Working Families Tax credit. And this is a redistribution type system. And I think a lot of people forget in this country, even compared to many Western countries, our income tax system is actually towards the top of the progressive world. A lot of the funding that comes in those western European systems, social democracies that we like, are usually value added taxes. That's what kind of pays the bills, right? And that tends to hurt everyone where we tend to be more progressive. Where the top one percent in this country pays, I believe it's like 30 of all income taxes. The top 50 pays 48 of or 98 of all income taxes. The top fifty percent of earners. So we have this where we move the taxes back up, but the state of Michigan, you know, is handing more money out. So there's a single worker with no kids making $15,000 and the federal government might get 6 to $700. There was a match of 6% of Michigan, but now we're getting up to 30%.
- [38:50]
B
The. So the earned Income Tax Credit, that's what that is. The Working Families Tax Credit is what we're calling it now. But it was really the Earned Income Tax Credit. And this has been around for decades. A lot of states offer the EITC to draw down federal dollars for people that are working full time but can't make ends meet. You know, like a lot of people you have on your show, right, you've got people who are working $15 an hour jobs cannot, you know, cannot make it doing that. And so this incentivizes full time work by giving people some additional tax relief. And it is disproportionately, it's like over 50% supports people who are also raising kids. So it's like got that compounding benefit.
- [39:33]
A
Yeah. A single parent with two kids making 25,000 hours a year would roughly get $6,800. And now, you know, you get that 30% match from Michigan. Now, technically, you know, this is a form of redistribution. It is, you know, maybe it's with a good heart. Do you think at the end of the day, it is overall beneficial to the economy in terms of the way we're looking for our economic structure to be created and managed?
- [39:57]
B
Well, I think government at the end of the day is really about making sure that every one of us can be safe. Right. Like, that's the most basic of government's job is to keep people safe, but also to create the conditions where every person can thrive. Right. To create an economy that business people can have the workforce that they need. I mean, it's all about what are our priorities and how do we make sure that all boats rise? You know, a rising tide lifts all boats. I mean, I think that that's the philosophy that I've always looked at all of these policies with. And, you know, I think that it's important to have debate. I think it's important to understand some of the shortcomings of past policies and look to what others are doing and see can we make it better. I mean, one of the things that we've done is really invest in our workforce. Bringing down the cost of higher education, bringing down cost of getting into a trade school. There was something called the Tennessee Reconnect. We, you know, borrowed that idea, made it our own. And we've got the Michigan Reconnect, which helps people 25 and up go back to school and earn additional credentials. So, you know, it's. It's in all of our interest to make sure that those basics are, are addressed.
- [41:18]
A
So there's also one of the more controversial things for EV holders like myself. I have a Model X and I love it and they hate me for it, and it's great. You know, we have $160 a year for EVs. Since they're not paying gases, they're not getting gas tax. Is it fair, especially if you're more on the clean energy side, that they're punished for not having a gas vehicle?
- [41:42]
B
So how are you punished for not having a gas vehicle?
- [41:44]
A
$160 a year for EVs and $60 for PHEVs as well. Yeah.
- [41:51]
B
Okay, so that's for a registration fee. I mean, you're still using the roads. Right. So it's a regis.
- [41:58]
A
We have good here in Michigan and Texas.
- [42:00]
B
We're exploring tolls. You know, it's a little. It's a little more challenging. Cause we don't have people cutting through Michigan like we do Ohio and Pennsylvania. So it's a little more challenging. But we're studying it. And I think, you know, we're gonna explore whether or not, you know, there's a roadway or two or many that might. It might make sense.
- [42:19]
A
Go to Canada. Right. Cut through Michigan to go to Canada.
- [42:22]
B
Yeah.
- [42:22]
A
I don't know if tolls are honestly good or not, but I just, you know, that's one of the controversial things that I kind of want to bring up. Controversial. It's not like people are like raising steaks. Yeah. Okay. And then we'll move on.
- [42:36]
B
How did you get into this? Can I ask you a question? Yes. Why is this your passion? Did you have a bad experience or did you make a bad decision?
- [42:46]
A
It's poor as Michigan.
- [42:47]
B
Okay.
- [42:47]
A
But that was my choice, not Michigan's fault. Okay. And I was dumb. Started learning about personal finance a lot. And then after wanting to switch career fields from product management and wanted to work with a YouTuber, someone kind of led me along for a couple months, didn't hire me, so I decided to start my own. Yeah, it's the short version.
- [43:03]
B
All right.
- [43:03]
A
Yeah.
- [43:04]
B
What's the worst financial mistake you ever.
- [43:06]
A
Made that I ever made? I mean, I maxed out a credit card at 18 immediately on a piano. I wanted to get a piano because I was gonna be a music major. I have to get a nice piano. $2,500 just. There you go. Or McDonald's. Every day, Junior year of college, also max out another $2500 card.
- [43:23]
B
And McDonald's.
- [43:24]
A
That's why we got this. That's what we got this, baby. That's that.
- [43:28]
B
Damn.
- [43:29]
A
So we already talked about, you know, some of the spending incentives cut back from the Ford Marshall Plan. Then there is the. The make it in Michigan, where he spent billion dollars on five EV plants as of 2025 of this month. Lawmakers killed that multibillion subsidy program. Right.
- [43:44]
B
Well, we are. We're retooling a bit. So I'm working with the legislature to make sure we still have some good economic development tools. But, you know, you gotta. Gotta retool. You gotta be nimble. We're competing against Ohio. We're competing against Japan. You know what I mean? Like, we're competing against the world. So we've gotta have the tools we need.
- [44:05]
A
And then pork. Government loves pork. We got $950 million there. So $234 million. Public infrastructure grants, like $50 million for downtown Pontiac. $20 million to the city of Wyoming. $20 million Detroit Greek Town Corridor, 5 million to Grand Rapids Children Museum, $122 million. Community enhancement projects, like 12 million statewide. YMCA is 5 million. Detroit Fisher Building. 5 million. Special Olympics. 5 million. West Michigan Chamber. Do they not have their own money? Special Olympics.
- [44:40]
B
I mean, Special Olympics. Are you against Special Olympics?
- [44:43]
A
No, I just not the biggest fan of taxes sometimes.
- [44:47]
B
I understand.
- [44:48]
A
Especially now that I have to write the check instead of it getting automatic.
- [44:51]
B
I get it. I get it. But this is not unique to Michigan. It's not great. And we are making changes to have more transparency in the process, to make sure that people who are promoting whatever project they want to get done have to do it so many days in advance so that the whole world can scrutinize it, so that they can make their case that it's the right thing to do.
- [45:13]
A
And trust me, I qualify for the Special Olympics. I'm 91 million for healthcare projects. 20 million to the Henry Ford House. 30 million Saginaw Medical Center. 10 million for Detroit firefighter health support. And then dozens of smaller options, like $900,000 to a Troy Cricket Field. Got lots of Indian immigration there. 200,000 to New Buffalo disc and 1.6 million Grand Rapids Ballet from the state. Why can't Grand Rapids do that?
- [45:40]
B
It's a good question, Caleb. I'll have to tell you what legislator asked for that, and you can ask them that question.
- [45:46]
A
That's just, you know, I love my home state.
- [45:49]
B
I know. Well, this doesn't make sense when you're looking at it from, you know, 40,000ft.
- [45:54]
A
I get it, but don't we get it before we.
- [45:56]
B
I understand, but the same token, I gotta get a budget to my desk. And legislators come with their, you know, with their special projects and they negotiate them in. And I introduced the budget. It doesn't have any pork in it. All right.
- [46:10]
A
Yeah.
- [46:11]
B
When I introduced the budget. So these are not things that I ever was advocating for, but the legislature gets their shot at it. And this is often what you see.
- [46:19]
A
Detroit Downtown Boxing Gym, $2 million. Detroit Zoo, 7 million. We like the zoos. Great. Zoos are exciting. Frankenmuth Youth Sports Complex, 10 million from the state. Potter Park Zoo in Lansing, $10 million. You know, this is the part of the show where I usually go through the spending, and it's like we got some bull spending in there. We got some taquitos. All right. That's what we call them here. Yeah, you're stopping in the gas station. Get yourself some, some Special Olympics bull now. We love the Special Olympics. We love the Special Olympics.
- [46:51]
B
I don't.
- [46:52]
A
I just didn't know anything.
- [46:53]
B
Yes.
- [46:54]
A
Yeah. Well, actually, and why it's kind of controversial is a lot of it is like no bid, negotiated late and sponsored disclosure or after pack.
- [47:04]
B
Yeah, I know it's gross. I mean, I think that every dollar should be. If it's used in those ways, there should be a bidding process or front end transparency, which is what I think we're going to get done.
- [47:15]
A
There's also $3 million, I think, this year for state managed retirement plan marketplace for businesses under 100 employees. Like we get, like I'm a small business under 100 employees. Like I save money on taxes implementing a retirement plan. Why does the state of Michigan need to come in and use taxpayer money to set up retirement plans for private businesses?
- [47:37]
B
It's a good question. I don't have a great answer for you other than I think the goal there is obviously to help the Small Business association, help their members get health care.
- [47:49]
A
And at least there, I mean, there are some things in court like 2.5 million for the Lansing lug nuts. Who goes to the lug nuts? I don't know what a lug nut is.
- [47:57]
B
It's a lug nut is a part. It's a part in your car. And the lug nuts are the baseball team in Lansing.
- [48:04]
A
Interesting. Lots of e bike incentives, 12,50 per bike, $1,250 per bike, electric bikes, E.
- [48:11]
B
Bikes could soon become more affordable under the new state budget. Republicans say the program is another example example of wasteful spending. The vouchers could save buyers anywhere from $500 to just over $1,200. What was the public feedback about what kind of access there should be now for bikes? I would say it was really split. Some were very much in favor and in support of what the department was proposing. Some were very much against it.
- [48:36]
A
So it was expensive. You know, just people are paying a lot of money in taxes and it's a small percentage overall, but it all stacks up. Right, Right. Well, and you know, when we're thinking of like the pork that it goes to of almost a billion bucks, like that kind of. That starts to hurt. That kind of starts to hurt. This one was kind of. This is a pilot program put into law this year. $2.5 million going to grant program aimed at short term lenders, payday loans, essentially government funded payday loans. Now, I know you didn't advocate for this. I'm not saying that you're right.
- [49:07]
B
I just soon signed a budget that doesn't have any of those things in it like the budget that I introduced in February.
- [49:13]
A
The state of Michigan outlook is actually pretty, in General, pretty good. 3.9% growth income per capita this year. Projected going forward, about 3.2%. And we do expect slower growth overall, economists are saying. But still growth in Michigan, which is good, you got up to the double A, double A plus, that's exciting. Credit rating and Detroit's kind of, you know, getting a nice little rebound. You know, that little core area. We like that. If I would live anywhere, it would be Grand Rapids personally if I move back. But 50% of the year being overcast just can't do that. There is potential tariff risks right now. Manufacturing is flat to down and uncertainty is definitely high. State is 49th in population growth. That is a long term risk. Growing population is required for a thriving economy and CEO sentiment is negative. So those are kind of the concerns of the state of Michigan. Do you have any thoughts on those before we kind of go on into some of the other things?
- [50:09]
B
Of course I do. I got thoughts on all of it. But I'll keep it succinct. I think, you know, there are a lot of good things happening. I think overwhelmingly. We just saw a new poll come out about kind of sentiment in Detroit. Some crazy number, like 78% of people feel like we're on the right track. I don't know how long it's been since you've been to Detroit, but we hosted.
- [50:30]
A
We try to avoid it.
- [50:30]
B
Well, we hosted the draft last year. It was spectacular. I mean, there's so much good stuff going on. Detroit, Grand Rapids, Michigan's a great place and yes, we've got some challenges, but. But I feel like we're making real headway and it's an exciting time to be, to be in Michigan for at.
- [50:49]
A
Least half the year.
- [50:50]
B
No, all year round. Caleb. People are going to need places like Michigan. 20% of the world's fresh surface water. That is true. You know, we don't have nearly the climate stuff that you guys have down here, for instance.
- [51:03]
A
Yeah, we got them droughts. Droughts and flood.
- [51:05]
B
Or on the east coast, you know, I mean, when we have a ice storm, you know, we got the equipment to take care of it.
- [51:12]
A
That is true. The only reason I'd move back to Michigan is If the world is collapsing, that would be the one thing. Oh, you're kidding me. I'm with you. I'm with you. My family's there. I love Michigan. You know, I got my Michigan stuff.
- [51:23]
B
I know. You guys get a gift here too.
- [51:25]
A
Yeah. Oh, thank you. Yes, hi, Alison here. Financial audit. I've curated the exact resources and tools I personally use or would use if I was in certain situations. So take advantage of these offers in the resources section in the description below. The first one, I've moved my investments to webull. Do the same and transfer to my investing app of choice and you get cash bonuses of $200 all the way up to $30,000, depending on initial funding amounts, and up to 8.1% APY on your money and up to 3.5 matches for your IRA. And then number two, a great new checking account that I've switched over from Sofi and it's called chime. Get that $550 bonus when you sign up with direct deposit and get almost 4 dol percent on your money just sitting there. And then three, automate your investing with acorns. Usually sign up incentives are only five bucks, but you get $20 with my link. Number four, you can increase your income and boost your resume with a course career certification. Five, if T mobile is good in your area, switch to Helium. Get a literal zero dollar a month phone plan for the same exact service. But most importantly, go get your free Hammer Financial score and see where you stand in the world of finances. Take the assessment@calebhammer.com youm will not regret any of these. Change your life today. Yes, let's do that. And while I do this, I mean, this is exciting. So the personal finance being taught in school, I'd love to learn more about that.
- [52:53]
B
Yeah, well, you know what it is? There's no question in my mind that we're missing an important overhead.
- [52:59]
A
Shark.
- [52:59]
B
A shark. Yes.
- [53:00]
A
You're the hammer.
- [53:00]
B
You're the hammer.
- [53:01]
A
There are not sharks in Michigan.
- [53:03]
B
But I love Shark Week.
- [53:04]
A
You love Shark Week?
- [53:05]
B
Oh, God, you've got a. Yes, there's a whole story there. Okay, you want to hear it?
- [53:12]
A
No.
- [53:13]
B
Okay, Google Gretchen Whitmer and Shark Week. It's not just Shark Week, it's Shark Week. But anyway, yes. Hammerhead shark. Because I love sharks.
- [53:24]
A
What else that'll push you over the edge of 2028? Shark Week. I'm sorry, I'm just being a dick for no reason. Let's see. Oh, some coasters. I think I'm feeling coasters. Look at that the state of Michigan coaster we love it is the Great Lake State and it is the Mitten State. Wisconsin F CK off. Like, what are they doing right?
- [53:47]
B
Wisconsin. Give me a break.
- [53:48]
A
Yeah, yeah, tell them to off.
- [53:52]
B
Fork off.
- [53:53]
A
Okay, well, I really appreciate it. I would love to learn more about personal finances, being taught something more.
- [54:00]
B
Oh, wait, here's the it. Ah.
- [54:05]
A
Oh, yeah. Natty, this is exciting. And I want to close the conversation on a happy note with that, but.
- [54:10]
B
Yes, we'll save it.
- [54:11]
A
Western Michigan, the national championship in college hockey last year. Thank you, hockey.
- [54:16]
B
P.S. they beat my alma mater, Michigan State, on the way, so you damn right.
- [54:21]
A
We split with Michigan this weekend.
- [54:23]
B
Yes.
- [54:23]
A
But personal finance being taught in school.
- [54:25]
B
So, you know, there's no question that everyone needs to know personal finance. I remember talking to my daughter when she was taking algebra, and she's like, why do I need to know quadratics? I need to know how to pay my taxes and buy a house. And that sentiment, I think, is real. Right. We've got to give people the tools they need to take care of themselves. And we had to do it before they head off to college and get that credit card when they're 18 years old and buy a stupid piano.
- [54:52]
A
I still have it. Thank you.
- [54:54]
B
Okay. Pianos aren't stupid, but. But to buy a piano at your smart.
- [54:56]
A
No, it was horrible. It was stupid.
- [54:59]
B
So, you know, we want to. Giving people budgeting, having a rudimentary understanding of markets and how to save. You know, I'm always talking to my kids about maximize what you can. If your employer has some sort of a match, do the maximum. Like, that's what my parents always taught me. Right. And I did it my whole time. And I've been a public service, you know, my whole life. I'm not complaining about what I make, but I don't make a fortune. It's public service. That's part of it. As governor, it's $159,000 a year, and certainly that's the highest I've ever been paid.
- [55:34]
A
A new book, right? Yeah.
- [55:36]
B
I'm donating that money to charity. Really. I can't make additional money while I'm governor, so anyway. But the point is, you max it out. You max it out, and we want people to understand that. I think a lot of people get into trouble very quickly because they just don't have that. Even my husband, who was a dentist, he went to school, you know, K through 12, went to college four years. Went to dental school four years, and then was.
- [55:59]
A
You have really nice teeth.
- [56:00]
B
Thank you. I paid a lot of money. I knocked these suckers out when I was in eighth grade. But anyway, the point is he graduated after all this schooling. Didn't have any idea how to run a business. No one taught him that.
- [56:13]
A
Dentists killed themselves.
- [56:14]
B
Yeah. Oh God, that's.
- [56:16]
A
It's true.
- [56:17]
B
I got dark fast.
- [56:18]
A
No, it's true though.
- [56:19]
B
High suicide rate, but had to, you know, had to figure that out on the fly. Didn't get that rudimentary knowledge. So that's what we're trying to do, give people, arm people with information.
- [56:29]
A
And this is required for graduation?
- [56:31]
B
Yes.
- [56:31]
A
Very good. Is there any way out of that? Because I know sometimes you can take like this is a slightly different class, but it's kind of adjacent so you don't have to take that class.
- [56:39]
B
I don't believe so. I think that this is. And anyone who's in 10th grade now will have to have had it in order to graduate.
- [56:47]
A
Well, w. For that. Right? I mean, that's.
- [56:50]
B
That's good. It's important.
- [56:51]
A
That's very important. Can you change one thing for me though?
- [56:54]
B
What?
- [56:55]
A
This is so more ironic. I don't understand because Texas does it too. I think it's just Michigan and Texas. If I'm not mistaken, Tesla cannot be a license as a dealer in the normal sense with the Michigan Vehicle Franchise act in Michigan. I know we want to protect the auto industry, but we got new type of auto industry coming. I don't know if they build in Michigan, but like we like let people just buy a car and they have to be avoid being in state. New direct sales under dealership law. So the sale is orchestrated out of state and then the vehicle titled in Michigan afterwards. And Tesla cannot directly own a service or repair faculty in Michigan under the same corporate structure.
- [57:33]
B
Tesla.
- [57:34]
A
Stupid. It's really stupid.
- [57:37]
B
It would take an act of the legislature to get it done. So I can't do it unilaterally. I will say this though. There's no shortage of Tesla's driving on Michigan roads.
- [57:45]
A
Yeah, but they have to get. It has to be an order out of state. We have to do this. And like if I buy the cybertruck, that which.
- [57:51]
B
Who would do that?
- [57:52]
A
Well, I love my ex. Like, I'm just saying I love my ex. Cybertruck, not for me, but if I were to buy them, they're made in Austin. It gets like shipped out of state, then move then back in. It's really silly.
- [58:04]
B
That's weird.
- [58:04]
A
It's just like, why is the government like picking. Well, I Guess it's going like full old school, like Obama error. Winners and losers. It's kind of hard. You're picking, like, why is it the lawn?
- [58:16]
B
That is weird.
- [58:17]
A
I don't know. But in Michigan too.
- [58:19]
B
Yeah. Well, I mean, supporting the big three, I think, I think we can understand the history that, why that's the reality currently in Michigan.
- [58:26]
A
But maybe, you know, get a little sucky, sucky Elon and you know, try to get him to build some stuff in Michigan.
- [58:32]
B
Hey, man, Elon Musk wants to have a conversation about building in Michigan. I'm all, I'm all ears. I'm a game.
- [58:37]
A
Yes, come on in.
- [58:39]
B
Why would you go anywhere else?
- [58:41]
A
50% overcast of the year. Depression. I can't do it. I cannot do it. Now, student loans in the country, you know, you'll probably be somewhere nearing the White House at some point. And right now we got $1.63 trillion in student loans. That's crazy. And federal student loans alone, not to mention private. And we got $40,000 for the average borrower. And 40% drop out, by the way. I'm among that 40%, that is 45 million people have federal student debt. And delinquency rates are rising at 7.73%. Now, my big question is, you know, the Trump administration, through the bbb did enact some changes and that kind of included the RAP plan. President Trump's new tax and spending law brings sweeping changes to the federal student loan system.
- [59:33]
B
Total student debt in America is at $1.8 trillion. It's roughly tripled in the last 17 years.
- [59:40]
A
A surge in past due student loans is sparking new concerns about the health of the U.S. economy. We currently have 22,000, 56,000, 90,000 $134,100.
- [59:53]
B
$8,137.48 in student loans. In one survey, 60% of young borrowers said they'd be in their 40s before.
- [60:01]
A
Their student loans are paid off. My daughter's going to a school. She can't afford $240,000 in debt. She's going to be a well financed barista when this is over. And simplifying a lot of the complicated repayment processes. And that means payments are set at 1 to 10%. But I've seen all over TikTok, a lot of people, mostly on, well, the TikTok generation, like kind of far left. They're like, I'm not going to pay them. They get their wages, garments. They're like, I can't afford to pay. And it's like 1% of their income. What is your thoughts on this? Because I know you have a different political philosophy than the President of the United States, but that doesn't seem like a bad thing. But everyone on the left side of the political aisle was like, this is evil.
- [60:37]
B
So where we're sitting right now, there's monsters and every once in a while I smell toast. Do you smell the toast? Okay.
- [60:43]
A
Yeah, it's a bakery. You're not having a straw.
- [60:44]
B
I just want to make sure I wasn't having, like something going on. Okay.
- [60:46]
A
I'm sorry. I always forget to tell people.
- [60:50]
B
The. You know, when I went to college, way back in my day, when I went to college, the state picked up about 75% of my tuition and my family and I had to come up with the other 25%. Right. And nowadays it's the exact opposite. So we have shifted. We've as a society have said it's not in all of our interests that we have an educated population. It's on you if you are going to pursue that. And so state picks up 25%, the individual picks up 75%, and they're putting more and more on credit cards, more and more taking out debt. Right. And so this is a part of the equation that's gotten us here. Now, what is the solution? I think there's a lot of debate and I don't think that there's any solution on the horizon right now. But I guess what I would challenge you and ask you is what do you think? I mean, you're someone that this, you know, you're closer to the generation we're talking about that's carrying all this debt and add your amount of debt that you acquired. What do you, what do you think the solution is?
- [61:48]
A
Because, well, I think this potentially might have a part of the solution. One thing that many on, you know, the left are kind of angry about this and trust me, bring a right wing governor on and I'll critique their things too, you know. You know, you're just on the left wing, so obviously we're going to talk about things that are interesting. But they got upset that there are graduate borrowing limits, undergraduate borrowing limits. You Talked about how 75% used to be paid for by the state, now it's 25% and it's on the individual. Well, a lot of the times on the left we've seen borrow an infinite amount of money to go to college, no caps. Why wouldn't the colleges just continue to raise how much it costs to go there? If you can borrow whatever. If one goes up, the other's going to go up. So setting these caps should hopefully at least discourage like they have to have people in, you know, butts in classrooms, right? Yep, they have to. And if people can't borrow a certain amount to go there, they won't be able to go. So my hope is that would hopefully restrict the endless increase of administrators and everything and just bull spending that colleges do now, unfortunately, foreign students, they pay cash and that's an easy replacement. And another fear is people will just go borrow from the private student loans. But I think what was kind of confusing to me is like the solution. I haven't heard a solution on the left other than just keep raising what people can borrow forever. And of course the schools are always gonna just, just say, well, can I have more money then? Because you can borrow more.
- [63:13]
B
Did you. When, when Biden supported, you know, had his writing off debt plan, did you. How did that hit you?
- [63:23]
A
I wouldn't have qualified at that time, actually, I think I may have due to my previous year tax return. I would have qualified for like a smaller forgiveness and I'll take free money. You know, I'll take free money. But it wasn't a solution. There was nothing long term. It helps a select group of people that have already gone to school, but it doesn't help anyone in the future because it didn't address the actual issue.
- [63:42]
B
Right. It was interesting to me, you know, as I talked to people in Michigan, you know, people who did take out debt but had paid it off, who were so like, you know, salty about the fact that someone else who hadn't paid off their debt could get it written off.
- [63:58]
A
Yeah.
- [63:59]
B
And it was kind of interesting. I just. It's a hard, it's a hard challenge to figure out what the equitable solution is because we don't want people carrying debt for their whole lives.
- [64:09]
A
No, but letting people borrow infinite amount, it doesn't. In my, you know, I went to high school in Michigan. I went to a good high school, but still every administrator and everything was borrow any amount to go to whatever school you want for whatever degree you want. We got people getting bull degrees that are not going to translate in the market and they're borrowing whatever it takes to go to the school that has the sports team they care about. I mean, this is not working.
- [64:32]
B
Yeah, well, we should, we could have a whole conversation about sports and, and college.
- [64:38]
A
If you were president in a hypothetical world, you know, of course you will never run, but would you want the wealthy to Pay more taxes?
- [64:47]
B
Would I, I mean, just for the purpose of paying taxes or for the purpose of, of strengthening our, you know, or national debts income, paying off our national debt for purpose of our homeland security and making sure that we've got defense, you know, I think we've got a lot of important things that we have not been doing.
- [65:06]
A
But do you advocate for tax increases? Among.
- [65:09]
B
I'm not here, I'm not here as a candidate for a higher office and I'm not here to advocate for any new taxes, raise taxes in Michigan. I mean, we did just raise taxes for, on sales of cannabis, you know.
- [65:22]
A
But income taxes on individuals or. I know there's no capital gains taxes.
- [65:26]
B
But I've not, I have not introduced an income tax in Michigan now.
- [65:30]
A
And you wouldn't support it if it came across your desk.
- [65:33]
B
There's. It ain't coming, okay. I mean, I'm just telling you, I, I know you, I know you want to play the conversation, you want to play all the hypotheticals, but I'm grounded in reality. It ain't coming, okay. But my position on something that's never going to happen.
- [65:49]
A
Okay.
- [65:50]
B
When you're president, would you propose higher taxes, income taxes?
- [65:55]
A
Well, I don't know. All that concerns me is, you know, California, you know, they've lost 1.6% of personal tax income because people can move anywhere. Now the UK itself, you know, they've lost 16,500 millionaires going all across the world. They're losing tax revenue substantially. 10% lost in taxes and capital gains taxes because they decided to close some loopholes and they're like, let's get people to pay the fair share. And now they're losing more tax revenue. So that's why I wanted to kind of hear your philosophy on this. Now we are wrapping up here. Can I ask a couple quick fires, Mr. Press Secretary? So a couple quick fires. Very cool. Quick fires. Very good. Michigan is a declining population state where southern states, you know, Texas gained 4.3, Florida 4.7. Where states like New York, Michigan, California are leaving. Why do you think that's happening? Why is that transition happening in this country?
- [66:53]
B
I've wins who are declining. We're not growing as fast. Yeah, I think that's an important distinction.
- [66:57]
A
The year of that this metric was taken, which was 2020 to 2023, that had a 0.3% loss.
- [67:04]
B
In our last census, we were up a percentage point. So whatever. I mean, it's not worth quibbling. It's just the point that. But you know, we do have an older population in Michigan. And I think that's part of why our strategy around investing in people, places and opportunities, you know, that bring good paying jobs, is going to continue to be really important. But I do have a head of chief growth officer, first state in the country to do that. We want to stay focused on how do we grow our population. It's important.
- [67:31]
A
And now in the state of Michigan, we are seeing Michigan Court Rule 6.106 provides that the default presumption is released on personal recognitions, which is no money bond or on unsecured bond rather than cash bail. We are starting to see even a shooting that happened in Austin over the weekend was someone that has already had multiple violent offenses. We know that people, individuals with 3 to 10 violent crime convictions represent only 0.9% of the total population, but account for almost 50% of violent crime. And those who have been released from prison account for 70% were rearrested within three years. Is these no cash bail systems that, you know, we're tending to see places like New York, New Jersey, Illinois, D.C. and we talked about Michigan. Is that actually benefiting people or is it just, are we not keeping people safe like we want to?
- [68:20]
B
I think, you know, I'm proud of a lot of the trajectories that we're on in Michigan. I think that when it comes to the no cash bail, what we see is a situation where people without resources pay a much bigger penalty than those that do. Just, just one more example of it is in the criminal justice realm, our recidivism rate is really low in Michigan.
- [68:41]
A
That's good.
- [68:41]
B
I'm proud of that. But certainly there are always going to be examples of where someone is not a part of the general rule and is an egregious example. And I think you've just raised a.
- [68:55]
A
Couple and then two final rapid fires. First one a little more sad, second one very happy. Political extremism. It's scary. I think we're in for a violent couple of years. It's an ungovernable city. People are exercising a lot of their rights to take it to the streets and get their voices heard. Political extremism was the number one issue in America. An alarming rise in political violence across the US Targeting both Democrats and Republicans. Nearly a third of American Americans now believe political violence may be necessary to get the country back on track. A man broke into the Pennsylvania governor's mansion in April and set the dining room alight in an attempt to kill Governor Josh Shapiro and his family. President Donald Trump is Announcing on Truth Social. Charlie Kirk is dead. The horror unfolded around 9 last night. A group of people leaving a young diplomat's reception at the Capitol Jewish Museum in Washington when a gunman opened fire. Both diplomatic staff at the Israeli embassy were killed tonight. It's being investigated as a targeted terror attack. Right now at 6:04 happening today, Minnesotans will begin saying goodbye to a powerful political leader who was tragically assassinated in her own home. Stop the steel. Let's get that gun.
- [70:13]
B
I know people on Martha's Vineyard on.
- [70:16]
A
Martha's Vineyard, who, if they had the opportunity to kill Donald Trump, probably would. They think he's Hitler. We just saw Charlie Kirk get shot. Me. You know, people are gonna view me as more right wing from this conversation. Cuz I pushed back on some left wing policies.
- [70:27]
B
Sure.
- [70:28]
A
And if Governor Abbott from Texas was here, I'd push back on some right wing policies. That's what happens. But people are gonna see that and they've already called me fascist and Nazi online just because I say personal responsibility is okay with money. Scary. But people are labeling that and then killing them because they're fascists. Kill all fascists. Okay, maybe that makes sense. But if you label a normal person a fascist, you kill them. What do you think is going on with political extremism right now and how would you solve it?
- [70:52]
B
I think it's really dangerous when we have leaders who want to fan the flames of anger and violence. I think we'll continue to see it grow, which is why I take it so seriously. Which is why whether I'm the target of it or one of my colleagues on either side of the aisle is, or the President of the United States is, I speak out against it every single time. I don't make excuse for it. I do not accept it. No matter where it's coming from. It's not. And I think it's be refreshing if everyone with a platform did that and then final.
- [71:25]
A
Hey, the poll came out today. NCAA hockey. The top three teams, Michigan State, Michigan, Western Michigan. We are the hockey state.
- [71:33]
B
That's right.
- [71:34]
A
We, we own this place. National champions last year, Western Michigan. I don't know, you're probably rooting for Michigan State, but I just, I just, I just want to share a little bit of hockey love.
- [71:44]
B
I love it. Let's go, man.
- [71:46]
A
Yeah. Awesome. All right, future President of the United States, Governor Whitmer here. Thanks for joining us for this financial audit. I'd say, you know, Hammer financial score for the state of Michigan honestly looks halfway decent. Couple pension concerns, couple of that overall net worth concern, but looking at about a six or a seven out of ten. So calebhammer.com for that. Thank you governor.
- [72:05]
B
Thank you.
- [72:06]
A
And don't forget to join us for the Financial Audit Post show where we do an extra 20 minutes of this conversation with me and the team and the producers and we break break down this conversation. Go into more tea. I'll see you there. Click that join button. Bye.
- [72:19]
B
Kayla, what's the one question you really wanted to ask but you knew that you maybe couldn't ask?
- [72:25]
A
Oh, we didn't talk about hearing you say in front of the Governor or gooning out of the gate.
- [72:31]
B
That was my favorite moment.
- [72:32]
A
Hammer Elite is the best YouTube membership on the platform and I just upgraded it. Three exclusive dedicated shows every single day, Monday through Friday. Join with the link in the pin comment or description below. This is the best membership you'll ever join. That's a promise.
- [72:51]
B
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