While ongoing crises with the Detroit Public Schools and Flint’s poisoned water get the majority of headlines, Gov. Rick Snyder says he’s committed to tackling a number of other important issues around the state. The term-limited governor says the remainder of his two years in office will focus on fixing problems, everything from determining how Michigan will fund much-needed infrastructure upgrades to positioning the state as a hub for mobility. Snyder sat down with MiBiz for a wide-ranging discussion during the Mackinac Policy Conference in early June.
Some economists have been critical of your corporate income tax policy, saying there’s inherent volatility with the system. When the state eventually hits a downturn, how will we weather the storm?
If you look at it, that’s true of many taxes. There are ups and downs to most taxes. We’re reliant on the individual income tax. You can step back and look at sales tax. That’s been an issue in the last year, to some degree, because of gas. If you look at gas prices coming down, that made a difference. But in the big picture, this is where you build a portfolio of different taxes. You tend to blend that out and have a balance.
What components will get us through?
If you look, we’ve done well. We were recognized for having the best budget practices in the country. We’ve got $600 million in our rainy day fund and I want to add to that over time. We’ve come so far.
What are the state’s bright spots that will get us through any future downturn in the economy?
Let’s use manufacturing as an example. We’ve led the country in adding manufacturing jobs, and I’m really proud of that. If you have a downturn, theoretically you can see issues in manufacturing, but manufacturing is so much more productive today. The productivity levels are so high, the number of people that would be reduced is much, much smaller than it would have been in previous cycles.
They’re not adding overcapacity as they have previously. This is the thing: Anytime you get in an economic downturn, everything can be adversely affected, but the degree of adverse effect should be less than what it was in the past.
What’s your outlook for the Michigan economy through the rest of the year?
If you look, I think most of the forecasts I’ve seen have us going strong for the next two or three years. That actually came out from the recent revenue estimating process and from what had been done by U of M earlier in the year. They both show that the rate (of growth) is one question, but there is solid growth.
The recently unveiled Planet M campaign aims to market Michigan’s strengths in the mobility industry. How will it do that?
The good part is the branding campaign goes with substantive action including the American Center for Mobility (at Willow Run Airport in Detroit), which is a huge opportunity. I think it’s important we brand because sometimes we do the substantive thing and not tell anyone. I view this as very much a positive.
What will the marketing strategy for Planet M look like?
What I’d say is we’ll start within the industry to make sure the industry understands. That’s the starting point, and then hopefully we can (show the general public) how important it is.
Is Michigan ahead of or behind the curve when it comes to the mobility industry, especially when you look at areas of the West Coast?
No, we’re ahead. Now we’ll tell people we’re ahead. (Laughs.)
What do you see coming out of the infrastructure commission you’ve assembled?
The goal is to assess our current situation and let’s understand what we need to be for the 21st century infrastructure. Let’s come out with how we should be approaching those questions and then how do you manage that and how do you find the resources to make those investments.
What was the thought process behind assembling the commission?
One of the things I try to emphasize to people: You don’t jump to the amount of resources you need and make up numbers. Sometimes people say, ‘It will cost this many billions.’ I don’t start by saying I’m going to spend this much money. I want to know what I need to do and how much does it cost to do it and what’s a rational timeframe to do it. When you talk infrastructure, you should be talking anywhere from 20 to 50 years as your investment horizon.
The MEDC has said recently that resources for initiatives such as Community Revitalization Program will be shifted away from areas such as Grand Rapids that already have a great deal of investment activity. Do you see this as picking winners and losers?
What I’d say is, Grand Rapids is a wonderful place and I’m proud of all the great things going on in Grand Rapids. … Once they reach a market-rate situation, the market should just work. … If you look at Grand Rapids, look at the market — it’s working. We have a number of communities where the market is working really well. They’re growing, thriving and doing great. Hopefully, people view it as it’s appropriate to help places join that category.
We’re getting close to another election season where we’ll have people actively campaigning to take your job.
I won’t be on that list. (Laughs.)
What do you envision for the state of the state when we have a new governor in 2019?
We’re on a very positive path for the next two or three years. And I hope that we find somebody that can continue what’s been created. They won’t have to look back at a lot of legacy problems or issues. We want to clean those up, and they can look to a bright future. But they’ll have a strong foundation to build on.