MACKINAC ISLAND — Michigan political and business leaders generally agree that the state’s infrastructure, workforce development and talent efforts need further investment.
However, finding the best route to see a return on those investments remains a point of contention.
Those topics were top of mind for many of the speakers and attendees at the Mackinac Policy Conference earlier this month, the annual business and political confab held on Mackinac Island and hosted by the Detroit Regional Chamber.
In particular, conservative candidates for governor offered their support for further cutting taxes as a means of growing the state’s economy, with Michigan attorney general and likely GOP front-runner Bill Schuette offering perhaps the most full-throated endorsement for the strategy.
“Michigan’s future is about more jobs and bigger paychecks,” Schuette said during a gubernatorial debate held during the conference.
“I intend to be Michigan’s ‘jobs’ governor,” he said. “We need to cut taxes in Michigan … because tax cuts mean more jobs.”
Schuette and other Republican candidates for governor insisted they could address Michigan’s crumbling roads and other infrastructure challenges without raising taxes, but offered few details on how that might work.
Moreover, their view differed from many probusiness advocates who also were gathered on the island spreading the message that Michigan needs to invest in infrastructure, services and quality of life amenities as a means of attracting more residents to participate in the state’s workforce.
“A lot of our recent college grads are going to find opportunities elsewhere. So we maintain a robust university system here in Michigan and we’re losing a good chunk of our graduates –– somewhere between 30 and 40 percent depending on the stats you look at,” said Tony Minghine, deputy executive director and COO of the Michigan Municipal League (MML), an Ann Arbor-based policy and lobbying organization for the state’s municipalities.
“That’s a huge investment we’re making on one end … but then we’re losing some of the best and brightest to other places,” Minghine said during a panel discussion on the state’s “broken” state revenue sharing system. “We can fix that by making those types of investments that we know they’re looking for.”
Gov. Rick Snyder, who has spent much of his time in office trying to better Michigan’s business competitiveness, used his keynote address at the conference to call into question candidates who say that the first thing they’ll do is raise or lower taxes.
Rather, policymakers need to be thinking about the long-term impact of their fiscal actions, he said.
“We should be looking ahead 40 to 50 years to help the people who haven’t been born yet and ask why we want to spend money,” Snyder said. “Is it a sound investment? Does it have a good return?”
For Snyder and other stakeholders, workforce development makes for one such sound investment opportunity.
With projections that Michigan employers will have more than 811,000 job openings in “high-demand” careers through 2024, business and political leaders are scrambling to address workforce development needs.
“We know that talent is the number one issue facing the state of Michigan,” Roger Curtis, director of the state’s Department of Talent and Economic Development (TED), told MiBiz at the Mackinac Policy Conference. “It’s the number one topic here at the conference and when we all go back to our day jobs, it’s going to remain on the front burner for all of us, whether you’re an educator (or) an employer.”
Curtis — like Snyder and other state leaders — touts the so-called “Marshall Plan for Talent,” a $100 million piece of legislation aimed at better pairing up educators and employers to meet future workforce needs, as one method to address the issue.
The legislation overwhelmingly passed the state Senate on May 31, but had not been taken up by the state’s House of Representatives at the time this report went to press.
West Michigan economic developers applaud efforts to better equip the state’s existing workforce with the skills needed for current and future jobs, but they also worry that it might not be enough.
According to Ron Kitchens, the CEO and senior partner at Southwest Michigan First, a Kalamazoo-based economic development organization, the state needs to begin focusing on net inbound migration to make up for the hundreds of thousands of jobs that were lost in the 2000s.
“We can talk about retraining people all day — and we should — and we can talk about all the education stuff and we should be,” Kitchens told MiBiz at the Mackinac Policy Conference. “But the reality is that if we don’t recruit more people … we’re screwed.”
A column in Crain’s Detroit Business following the conference encouraged planners to make population growth a top concern in developing the agenda for the next Mackinac Policy Conference.
Also to that end, TED used the occasion of the conference to launch the “Choose Michigan” talent attraction campaign. The initiative aims to target young professionals in Chicago, Madison and Pittsburgh to educate them on the virtues of living and working in Michigan.
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The MML’s Minghine said growing the state’s population means investing in the state’s cities, which account for the majority of Michigan’s GDP.
“Michigan is dead last in investing in their local governments and their local communities in trying to provide their services,” Minghine said during a municipal finance panel discussion. “Now I want you to think about that in a business context. If this was any business on earth, we’d go do something else. We don’t invest anything in our revenue-generating capacity. We only provide austerity. We only look to cut as a way forward.
“No business would survive if the only way they tried to make their business work was to cut costs, cut costs, cut costs and not invest in R&D, not invest in revenue-generating capacity. You’d fail, but that’s the exact scenario we’ve created for local governments.”
Minghine stopped short of calling for new taxes to better fund services. Rather, he believes the state needs to make its investments more wisely and more efficiently, as well as give municipalities more freedom to use resources.
But fellow panelists said that while it’s fine for the state to find better ways of deploying its resources, higher taxes have to be on the table.
“At the end of the day, this is about resources, this is about money,” said Chris Coleman, who served as mayor of St. Paul, Minn. from 2006 to 2018.
Throughout his presentation, Coleman noted the investments St. Paul made during his administration and the returns the city saw because of it.
“You can’t be afraid to talk about taxes. If you want a police department, you’ve got to pay for it. You want potholes fixed, you’ve got to pay for them,” Coleman said. “(Minnesota has) one of the strongest economies in the country and it continues to grow. We are a high-tax state, but we’re also thriving because of it.”