MACKINAC ISLAND – Michigan, and the Detroit Metro Region in particular, have lost their standing at the top of the income scale over the past decade in large part because they have not kept up with changes in the world economy, officials told those gathered for the Detroit Regional Chamber Mackinac Policy Conference Wednesday.
The attendees were greeted at the conference by two maps: Chicago, one of the top 10 regions for per capita income nationally, and Detroit. The Chicago map showed concentrations of young professionals inside the city surrounded by young professionals with children, in the suburbs. Detroit, in contrast, had one small gathering of these college-educated professionals on its western edge and a much less dense showing of both the childless and those with children in the surrounding suburbs.
“This is what a map looks like of a region that’s not participating in the knowledge economy,” said Lou Glazer, president of Michigan Future Incorporated. “We must get younger and better educated or we will get poorer.”
Education and attracting and keeping young professionals will be among the topics of discussion for the policy and business leaders from the region and statewide at this year’s conference. The conference includes special sessions of young professionals to gather their ideas on building the region.
Glazer said the list of states and regions with the highest per capita incomes also eliminate many of the reasons officials have listed for Michigan’s decline: “Take cold off the list as an excuse. Take the South off the list as a competitor. Take low tax states off the list.”
He and others said the key is to invest in education across the spectrum.
“There’s an almost perfect correlation between the number of jobs and the strength of the universities,” said Paul Hillegonds, senior vice president for corporate affairs for DTE Energy and a member of Governor Jennifer Granholm’s Emergency Financial Advisory Panel last year.
He said the state should be spending more money on particularly the big three research universities, instead of cutting their budgets as it has done the past several years.
“Of course we should have competitive tax rates, but we also need a sound public infrastructure supported by a sufficient tax structure,” he said.
Hillegonds said the Legislature managed to balance the budget last year, but didn’t follow the guidance of the advisory panel in doing it. “Last year’s income tax increase and business surcharge mitigated but did not resolve the fiscal problem,” he said. “Budget cuts and tax increases will not be enough.”
He said the state still has spending pressures, like corrections and employee retirement costs, that need to be addressed, as well as tax shortfalls. “The change from manufacturing to services resulted in the sales tax covering 20 percent less of the economy,” he said.
He argued the one-time fixes used to balance the budget over the last few years have only made the structural deficit worse.
But in addition to having the education and other services that will attract and keep young professionals in the state, Michigan also has to create an atmosphere where they will enjoy living, the panelists said.
Key to that is rebuilding the core cities. “Southeast Michigan and Metro Detroit have no excuse for not being a leader in the knowledge economy,” Glazer said. “All the futurists said because work is digital and can be done anywhere, it will be. The opposite is true.”
Hillegonds also chastised the state as a whole for some recent actions. “We need to start celebrating our diversity, not just tolerating it,” he said. “The ballot proposals we passed the last couple of years were not welcoming.”
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