Michigan risks losing key economic measures without investments in education
HAlthough lawmakers and Governor Gretchen Whitmer reach a consensus on billions in one-time federal pandemic funds and budget surpluses with investments, tax cuts or a combination of the two, Jeff Donofrio wants Michigan to be much more competitive in the long run.
Given the amount of funding now available, Donofrio sees a unique opportunity to better position the state to compete with others as a new state budget for the next fiscal year prepares.
“We should put everything on the table in terms of what is going to put Michigan and the Michiganders in the best possible competitive position, especially as we see ourselves facing high inflation (and) gas prices students. All of these things need to be considered,” said Donofrio, CEO of Business Leaders for Michigan. “We have to look at Michigan’s competitiveness against all of these other states and we also have to look at how we’re going to spend those dollars. It may be better in the pockets of the companies so that they can make those choices. It may be better in corporate pockets. But we have to make sure that we have a state where we’ve invested in infrastructure, people, our K-12 systems and all of those things at the same time.
Business Leaders for Michigan, a roundtable of business leaders and university presidents, released a new plan to elevate Michigan to the top 10 performers. Among the many suggestions is the need to maintain a competitive fiscal climate, even as “our organization continues to talk about the things we need to invest in first.”
Business leaders in Michigan’s Compete to Win plan to become one of the top 10 state calls for “investing in people” and “helping people overcome barriers,” such as college affordability.
Compete to Win prioritizes investments as Michigan sits in the middle of the pack nationally, ranking 29th among business leaders for Michigan’s performance metrics.
That’s a “big leap” from where it was in 2009, “but just maintaining the middle position or middle position that we’re in today is going to take a lot of work, and moving from the middle to the top 10 that we’ve been aiming for for our state for a dozen years now is going to be a lot tougher,” Donofrio said.
“This is going to require more concerted investments (and) more strategies that we execute over the long term. Things like proactive site development, making sure we have ready-to-use sites and incentives to help create those new jobs, to help with the transition (electric vehicle) and the autonomous transition that’s coming comes from it, and to really find ways to make our talent and Michiganders in the market the most competitive,” he said.
K-12 investments needed
Compete to Win particularly targets the latter issue, citing a persistent need in Michigan: to improve and reform K-12 education, where the state fares poorly in the latest annual benchmarking report that Business Leaders for Michigan released earlier this year. year.
“Michigan has struggled for several years to improve K-12 educational outcomes. Other states and many other countries are far ahead of us. Although Michigan has skilled and dedicated teachers and administrators, student test scores are among the lowest in the nation,” the Compete to Win plan said.
The plan describes K-12 education in Michigan as using an “outdated model” that “was first built for an agricultural economy and then transitioned to moving students from the classroom to the assembly line.” montage” and has “not kept up with the changing needs of the 21st century economy.
That helped Michigan rank 39th in fourth-grade reading and 33rd in eighth-grade math, according to Compete to Win.
Michigan business leaders are urging the state to adopt new performance standards, increase spending to support education, support teacher retention and growth, improve vocational and technical training, and invest in student support programs.
“A Michigan high school diploma must represent a world-class education that puts Michiganders on equal footing with anyone in the world who leads, innovates, and creates the next Fords, Googles, Facebooks, and engines of our economy. “, said Donofrio. “You can’t overcome a K-12 system that fails, a K-12 system that doesn’t give people the skills to be successful in a college situation (or) in a work environment.”
Part of the barrier to change is the prevailing view among people that education in Michigan is average compared to other states — but their own local schools score above average.
“We shouldn’t be surprised that there’s no urgency to change the system when people think there’s no problem,” Donofrio said. “The reality is that we are underperforming leading states.”
In a recent conversation, Donofrio explained how Tennessee and Kentucky overtook Michigan and “are currently more educated states than Michigan.”
“You see a lot of investment and a lot of companies are choosing to go to these states because they’ve been doing things for decades to invest in their people, to invest in their economic competitiveness, to improve their systems in a way that Michigan hasn’t ‘I haven’t been able to merge yet,’” he said.
Tennessee and Kentucky, of course, are where Ford Motor Co. chose last fall to partner with SK Innovation Co. to invest $11.4 billion and build facilities that manufacture both electric vehicles and batteries, creating 11,000 jobs.
Ford’s announcement in September gave Michigan a proverbial kick in the gut. Lawmakers and Whitmer responded by creating a billion-dollar state fund at the end of 2021 to support massive economic development projects.
The Outreach and Attraction Strategic Reserve Fund helped the state land General Motors’ $7 billion initiative in January to convert an assembly plant in Orion Township to build electric pickup trucks and a battery plant in Lansing by Ultium Cells LLC, a joint partnership with LG Energy Solution.
More recently, the state botched a $2.5 billion project planned by Stellantis and South Korea’s Samsung SDI for an electric vehicle battery plant in Kokomo, Ind.
Like education, Donofrio hopes the SOAR fund isn’t just a reaction that generates the idea that the problem highlighted by Ford’s announcement has been solved.
“We’re really good with silver bullets and try to solve the problem with one thing,” he said.
The state now has the ability to make these investments using one-time funds and surpluses from the state budget, as well as federal money to the states, to accelerate that level of education and remove barriers to work, said said Donofrio. This opportunity – combined with the urgency of losing large investments to Southern states – could finally create an urgency to make the investments needed to improve state performance in the future.
Whether there is the political will and capacity is a whole other question.
“These are issues that will hurt us in the future if we don’t address them today, and they hurt us now. We don’t want to look back 10 years from now and say, ‘We wish we’d used that money to invest in our future, because other states have done that and they’ve passed us, and the gap is so big now that Michigan can never catch up.” said Donofrio. “If we don’t think about strategy and persistence of strategy for the next 10 to 20 years, we are way behind other states youwho did the exact same thing.