Three reports outline a bold agenda for change in Michigan

It may be hard to do, with headlines of a bleak economy filling your inbox and everywhere else to be found, but sit back, close your eyes and imagine Michigan lawmakers and policymakers:

• Implementing a system of universal access to health care
• Replacing all revenues lost from the Single Business Tax repeal
• Eliminating or extending legislative term limits
• Requiring school districts and local governments to consolidate and share services
• Setting specific performance measures for all public agencies, including K-12 and higher education
• Providing taxpayers with an annual report card on state and local spending and taxing
• Re-branding Michigan as "The North Coast"

Those are just a few of the bold - perhaps even visionary - recommendations contained in three blue-ribbon reports for Michigan's future that will be discussed at the Detroit Regional Chamber's 2008 Mackinac Policy Conference.

While the reports differ in their specific focus, all three sound this warning - Michigan's current economic crisis is too serious for partisan sniping and business-as-usual politics. As the authors of one report put it - Our response to this crisis will, in large measure, define Michigan for both this and the next generation.

Welcome to the ‘North Coast'

Re-branding Michigan as a vibrant "North Coast" is one of many intriguing recommendations included in a report released in January by The Center for Michigan, a nonprofit organization founded in 2006 by former Ann Arbor publisher Phil Power. The North Coast is defined as a place that is home to one-fifth of the world's fresh surface water and other bountiful natural resources that support sustainable growth in industries such as agriculture, tourism and forestry - and a place that grows ever smarter and more innovative.

Based on input from some 1,500 leaders and citizens who participated in 96 first-round community conversations across the state last year, the Michigan's Defining Moment (MDM) report released by The Center for Michigan outlines in broad brush strokes a number of ambitious, long-term reforms for Michigan under three guiding principles: A Talented and Globally Competitive Workforce; A Vibrant Economy and Great Quality of Life; and Efficient and Accountable Government.

For a talented and globally competitive workforce, the report recommends:

• Dramatically improving overall learning and completion rates from early childhood to K-12 through higher education.
• Assuring affordable access to lifelong learning so young people get the skills they need to launch prosperous careers and workers in mid-career and beyond can best adapt to the rapidly changing economy.

For a vibrant economy and great quality of life, the report recommends:

• Reinvigorating and diversifying our economy by forging unique niches that draw on established and emerging assets.
• Greatly boosting economic development by growing an entrepreneurial culture, growing venture capital and ensuring a competitive, simple and predictable business tax structure; providing greater recognition and support for our state's growing new economy of entrepreneurs and small businesses: and embracing change and risk as key factors in 21st century personal and corporate success.
• Rejuvenating communities to assure they have the amenities, culture and diversity to develop, attract and retain talented people; effectively managing the size and cost of our infrastructure; and protecting our natural resources.

For an efficient and accountable government, the report recommends:

• Considering lengthened term limits and a unicameral and/or part-time legislature in addition to campaign finance reform and redistricting.
• Establishing a new "public purse" - a tightly focused, long-term, sustained taxing and spending strategy that focuses on sustaining those public investments that are crucial for the state's competitiveness in the global economy.
• Increasing collaboration and service sharing among Michigan's hundreds of school districts and local government units.

The Talent Factor

A report released in February by Michigan Future Inc. focuses on Michigan's transition to a knowledge-based economy. According to this report, the progress Michigan makes in this crucial area will, in large part, determine whether our state once again enjoys high prosperity as measured by per capita income.

Currently, the picture is not good. Michigan and its largest metro area - Detroit - are lagging in the transition to a knowledge-based economy. Consider these statistics:

In 2006 Michigan ranked 26th in per capita income, an unprecedented drop of 10 places in a relatively short six-year period. It ranked 37th in the share of wages from knowledge-based industries and 34th in proportion of adults with a bachelor's degree or more.

In 2005 Metro Detroit ranked 15th in per capita income. Of 53 metro areas with populations of 1 million or more, the nine-county Detroit region ranked 38th in knowledge-based industries and 37th in college attainment. (The smaller metro areas of Grand Rapids and Lansing lagged even more.)

Unless Michigan substantially increases the proportion of college-educated adults - particularly in its biggest metropolitan areas - it is anticipated that Michigan will continue to trend downwards, toward the mid-30s, in the per capita income rankings, the report warns.

What most distinguishes successful areas - those with a high per capita income - from Michigan is their concentrations of talent, where talent is defined as a combination of knowledge, creativity and entrepreneurship.

Long-Term Reforms

Last year Gov. Jennifer Granholm's bipartisan Emergency Financial Advisory Panel released a report with four key findings for policymakers to consider when tackling long-term reforms in the way Michigan taxes, spends and delivers public services:

1. Michigan cannot economically grow its way out of the current financial crisis facing state and local governments. Even the rosiest of economic forecasts fails to provide sufficient revenues under the current tax structure to meet projected budget shortfalls.

2. Michigan should not rely solely on budget cuts to balance state budgets. This would mean devastating disinvestment in important programs and services supported by the General Fund and significant cuts in school aid. Michigan's economic future similarly depends on the capacity of our research universities to nurture new and growing industries.

3. Michigan must restructure taxes in a manner that would immediately increase revenues, but Michigan should not solely tax its way to balanced state budgets. State revenues over the next 10 years - assuming no change in tax structure and full replacement of SBT revenues - will fall short of current programs and spending policies by $10 billion. Relying solely on tax increases to balance future budgets will create an instability that will drive Michigan out of competitiveness for jobs and greatly dampen economic investment. It is imperative that policymakers look now at opportunities to control the spending side of government. In particular, the state must pay attention to rising costs in corrections and public employee benefits.

4. Michigan must fundamentally reform government and the delivery of public services. Reforms that should be considered include:

• Requiring specific measurements of performance, value and benchmarking from all public agencies, including K-12 and higher education.
• Undertaking comprehensive health care reform. A well-regulated system of universal access to health care will decrease, not increase, health care expenditures and costs.
• Encouraging, and if need be requiring, local units of government and school districts to share or consolidate administrative services and deliver them more cost effectively.
• Reforming Public Act 312, which requires binding arbitration for public-safety workers.
• Providing taxpayers annually with an understandable report card on state and local spending and taxing.

Continuing to explore and apply best practices from other states and information technology to more efficiently enforce business regulations and lessen the time and costs to business of meeting regulatory requirements.

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