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Sunday, 09 November 2014 21:29

CEO summit to focus on strategies to move Michigan forward; Q&A: Doug Rothwell, Business Leaders for Michigan

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Doug Rothwell Doug Rothwell

Business Leaders for Michigan heads into this week’s CEO Summit focused on longer-range issues than when the organization first came together five years ago.

A coalition of about 80 corporate CEOs and university presidents that was formed during the depth of the state’s economic downturn, Business Leaders for Michigan advocates for reforms to make Michigan a top 10 performing state economically. After the state enacted budgetary, fiscal and tax reforms over the last few years, the group is now pushing for action to secure funding to upgrade Michigan’s roads and to place a greater emphasis on workforce development.

As Business Leaders for Michigan members prepare to gather this week in Detroit for the third-annual CEO Summit that focuses on business growth, innovation, entrepreneurship and competing in the global economy, President and CEO Doug Rothwell spoke with MiBiz about where the state sits today and what it needs to do next.

How do you assess where the state’s gone in the five years and what’s been Business Leaders for Michigan’s role in it?

I think we play a really key role. Back in 2000 when we were formed, the state had no plan to gets its economy back on track. We came forward with the most comprehensive plan – and it still is today – on how to get Michigan to be a top 10 state, which is what we’re all aspiring for. The state has made tremendous progress. We have had terrific political leadership that has helped get our finances in order and our budgets restructured, and get our tax system reformed. They have all been very necessary steps.

What kind of progress has Michigan made since then?

What you’re seeing is Michigan going from the bottom of the 50 states toward at least being in the middle of the pack. The challenge going forward is how do we get to be above middle of the pack? That’s going to take a different agenda than we’ve had. We think it’s going to take more investments in our people and our infrastructure. It’s also going to take us leveraging some of our key assets to a greater degree than we have.

As we head toward the end of 2014 and begin looking at 2015, what’s at the top of the agenda for Business Leaders for Michigan?

Number one is roads, but it has to be a real road fix. What I mean by that is not just repairing the roads but expanding the capacity of our roads to facilitate growth. A lot of our roads – I-94, I-96 – are severely congested, and just fixing the potholes is not going to get the job done. It also needs to include major reforms in the way that the money is spent and it also needs to be accompanied by a revenue stream that’s sustainable so that we’re not going to be back in this mess we’re in every few years.

Our concern is there is a lot of talk about continuing to use general fund revenues to fund a road fix. We don’t think that is the right approach, we don’t think that is sustainable, and even the $1 billion (a year) the governor has asked for is really not at a level that many experts say is needed to expand the roads for economic growth.

We want to see progress and we hope there is some progress during the lame-duck session (of the Legislature), but we believe this is going to be an issue that we will not get totally resolved this year. We think it’s going to be something that we are going to have to continue to work on for some time.

What’s your organization’s solution for generating the revenue that you believe is needed for roads?

We’re very open-minded in terms of what that could be. We’ve said it could be some form of the wholesale (fuel) tax and gas taxes. We don’t want to get overly prescriptive because we understand that’s ultimately the political decision that has to be made, but we recognize it’s going to be an increase in taxes. It’s what’s going to have to happen and we’re just basically saying that we’re going to have to increase taxes more than what we’re hearing from the discussion so far.

How do you sell that and convince legislators to take that leap?

Legislators need to recognize that they ran for office to help lead our state. We recognize that this is a tough political issue, but it’s why they wanted to run for office – to help lead the state to real solutions. They’re not certainly happy with Michigan being an average state in terms of our economic performance. … If we want to be an above-average performing state, we have to not just fix but expand the roads and that means more revenue. Ultimately, you’re going to sell that to the public. ‘You’re going to see your income go up and you’re going to see more jobs if you do these things.’

Beyond transportation, what else does the state need to do to improve its economic performance and move up in the rankings?

One is we need more skilled workers. There are some 80,000 jobs available in Michigan right now that require some level of technical background and that there’s not the workforce to fill. They can be filled if we expand worker training programs significantly. … That’s something where this year maybe by re-prioritizing money we can get started and then beyond that, maybe come up with some form of a financing program to fund it in the future. Not only do we need more skilled workers, we need more educated workers. Michigan is a state that has a below-average level of people with any form of education beyond high school.

Improving workforce development has been a constant issue for years. What seems to be the barrier to getting it resolved?

We have a hard time with consistency. We set priorities, we do them for a couple of years, and then we move on. States that do best at having great economies have a few priorities and stick with them for decades.

How has Business Leaders changed as an organization?

First of all, we’re not the new kids on the block anymore. We’ve matured as an organization. The agenda has kind of changed a lot. We’re kind of going from stabilizing the patient, which is what we had to do the first four or five years, just get the basics done in terms of finances and taxes and the traditional kind of business climate agenda. … (The) agenda now is really more long term. There are issues – long-term infrastructure fixes, talent development, asset development – that you don’t get done overnight. So that is harder work. You have to sustain your focus and energy and enthusiasm for those for years, and that’s why every state is not a top 10 state. They lose their focus.

When Business Leaders for Michigan was formed, you spoke about breaking down the east-west economic and cultural divide that has existed for generations in the state. Through the business connections that have been made, are we beginning to get beyond that issue?

We’re finally beyond that issue, and here’s an example: I think that some of the strongest supporters of the state’s investment in the Detroit bankruptcy settlement came from the west side of the state. Five years ago, 10 years ago, I don’t think we would have seen that. … What you see today is just as much enthusiasm for Detroit on the west side as you see on the east side, and reverse. There’s as much enthusiasm for Grand Rapids and Kalamazoo and what’s going on in West Michigan over on the east side of the state.


Read 2229 times Last modified on Thursday, 13 November 2014 11:56

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