Transcript 2010 Work Plan - Business Leaders for Michigan

Growing the New Michigan
© 2012 Business Leaders for Michigan
Business Leaders for Michigan
Who We Are
• Dedicated to making Michigan a “Top Ten” state for job,
economic and personal income growth
• The state’s business roundtable: composed of the
chairpersons, chief executives or most senior executives of the
state’s largest job providers and universities.
• Driving nearly one-quarter of the state’s economy: provide over
320,000 direct jobs in Michigan, generate over $1 trillion in
annual revenue, and serve over 135,000 students.
Website: BusinessLeadersforMichigan.com
2
Introduction
Business Leaders for Michigan first issued the Michigan Turnaround Plan in 2009 as a
fact-based, holistic strategy to make Michigan a “Top Ten” state for job and economic
growth. While Michigan still faces many competitive challenges, significant progress
has been made toward accomplishing the Plan’s objectives with strong support from
the Governor and state legislature.
This is an updated and expanded version of the Michigan Turnaround Plan that reflects
what has been accomplished and is still left to do. The first three steps focus on
providing a strong foundation for long-term growth by “fixing the basics,” such as
adopting strong fiscal and tax policies. Step 4 identifies two economic priorities for state
investment. Step 5 identifies the importance of growing the economies of Michigan’s
major cities and metro regions. Step 6 builds on the foundation set in steps 1-5 by
providing a framework for growing the New Michigan by leveraging key assets to
accelerate economic growth.
Michigan’s great challenge is accelerating job and economic growth to meet, and
ultimately surpass, U.S. and global competitors. The state gradually lost its competitive
position over nearly fifty years and it will take a sustained effort and sense of urgency to
achieve such ambitious goals. But BLM believes the strategies outlined in this Plan will
do just that – turn Michigan around.
3
Table of Contents
CONTENTS
PAGE
Executive Summary
5
The Case for Change
6
The Impact on Michigan
8
Michigan’s Competitive Position
14
Progress
27
2012 Michigan Turnaround Plan Overview
30
The Six Step Turnaround Plan
34
Where We Could Be
50
The Commitment
51
4
Executive Summary
PAST
Prosperous State
Per capita personal income 14% above the national average in the 1950s1
RECENT TRENDS
Relative Decline
Economic decline began in 1960s and accelerated rapidly beginning in 2000 as Michigan fell from
above average to below average
ROOT CAUSE
Uncompetitive
Michigan ranks average to below average on many factors that drive job creation2
TODAY
Turnaround Underway
Reforms are helping to improve economy, but complete turnaround will take years - per capita income
13% below national average1
FUTURE
Michigan Turnaround Plan
A holistic plan that builds on Michigan’s strengths to make Michigan a “Top Ten” state for job,
economic and personal income growth
1. US Bureau of Economic Analysis, 2. BLM 2011 Benchmarking Report
5
The Case for Change:
MI Lost 1M Jobs 2000-10
50% of U.S.
Job Losses:
 Michigan lost 1M of
the 2M jobs lost in the
nation from 2000
through 2010.
 This far surpassed the
job losses experienced
by any other state
during this period.
When the nation lost 2 million jobs.... Michigan alone lost 1 million jobs.
SOURCE: BLS
6
The Case for Change:
Job Losses Across All Sectors
No One Sector
Was Cause:
MI Job Sector Growth vs. Nation
 Michigan under-performed
14%
the nation in 86% of the
22 U.S. job categories
from 2004-2009.
 The auto sector only
impacted ~20% job losses.
MI > U.S.
 Michigan sectors that out-
performed the U.S. average
were: Community and Social
Services, Personal Care and
Services, and Agriculture.
86%
U.S. > MI
SOURCE: SOC Job Category Data 2004-2009, BLS
7
The Impact on Michigan:
Weaker Economy
Compounded Annual Growth Rate (2001-2010)
Economy Grew
2% Less than the
Top Ten:
Gross Domestic Product
(GDP) grew 2% less
than the average Top
Ten state over the past
decade and less than
nearly all peer states.
 This is the primary
factor behind stagnant
wages and job losses.
% Change 2001-2010
 Michigan’s Per Capita
2
1.5
1
0.5
0
-0.5
Peer States
-1
“Top Ten” states for job and economic growth: KS, MD, MT, NE, ND, SD, TX, VA, WA, WY
SOURCE: Bureau of Economic Analysis; Moody’s Economy.com;
U.S. Census Bureau; McKinsey analysis
8
The Impact on Michigan:
Lower Bond Rating
Standard & Poor’s Bond Ratings
Higher Borrowing
Costs:
18
16

Michigan spent more than
it raised in revenues, went
deeper into debt and drew
down all its financial
reserves in the 2000s
resulting in a low bond
rating.
This increases the cost of
borrowing for all
governments in Michigan
and is a symbol of the
state’s fiscal health.
14
Michigan
12
# States

10
8
6
4
2
0
AAA
AA+
AA
AA-
A+
A-
SOURCE: S&P
9
The Impact on Michigan:
Poorer Residents
Poorer Relative
to U.S.:

Michigan’s per capita
income had been close to
the national average for
nearly 40 years until
declining dramatically in
the last decade.
Difference in MI Per Capita Income Growth
Compared to the Nation
2.0%
1950-1960
1960-1970
1970-1980
1980-1990
1990-2000
2000-2010
0.4%
0.0%
-2.0%
-4.0%
-1.9%
-3.3%
-6.0%

Michigan’s per capita
income has fallen to
39th due to falling GDP
over the past decade.
-8.0%
-7.8%
-10.0%
-9.9%
-12.0%
-14.0%
-13.8%
-16.0%
SOURCE: U.S. Bureau of Economic Analysis
10
The Impact on Michigan:
Smaller State
Declining
Population:

Michigan is the only
state to lose
population in the last
decade (0.6% decline).

This has resulted in
Michigan becoming less
attractive to business
due to a declining share
of the consumer
market.
SOURCE: U.S. Census Bureau Population Estimates Program
11
The Impact on Michigan:
Losing Talent
Lack of Jobs Has
Forced Talent
to Leave:

Michigan’s high
unemployment rate
and economic decline
across sectors has
caused talent to
migrate out-of-state to
where most of the jobs
are — the Sun Belt
states.
SOURCE: Forbes based on U.S. Census data (2008)
12
The Impact on Michigan:
Past Ten Years Performance
Weak Ten Year
Economic TrackRecord:

Michigan’s combined
ranking on per capita
GDP growth, per
capita personal
income level and
employment growth is
last among states over
the past ten years.

This has placed
Michigan far behind its
U.S. and global
economic competitors.
SOURCE: 2011 BLM Benchmarking Report
13
Michigan’s Competitive Position:
Seeking the Right Balance
The Cost/Value
Equation:

No one factor determines
where economic growth
occurs. Taxes, talent
availability and quality of
life factors all matter.

Economic growth occurs
in places that offer the
most value relevant to the
needs of specific types of
businesses at costs
commensurate with the
value offered.
COST
>
VALUE
14
Michigan’s Competitive Position:
Positives on Rise;
Negatives Still
High:
Michigan’s “cost/value”
scorecard is getting
better, but still isn’t
strong enough to
dramatically accelerate
growth.

Simply put, we need to
increase the positive
attributes and lessen the
negative drawbacks.
Talent Production
Technical Talent
Base
Innovation
Environment
Geographic
Location
Costs
Regulatory
Climate
Education
Attainment
Infrastructure
Urban Vitality
SOURCES: 2011 BLM Benchmarking Report
& Anderson Economic Group Report for Brookings
NEGATIVES

POSITIVES
Cost/Value Proposition Improving
15
Michigan’s Competitive Position:
Strong Talent Production
Competitive
Supply of Highly
Educated
Graduates:

Future workplace
demands will require
increasing the number
of educated workers.

Current levels of
college graduates
make Michigan
competitive with
most states.
1 States with the same score received the same rank
2 “Top Ten” states for job and economic growth: KS, MD, MT, NE, ND, SD, TX, VA, WA, WY
SOURCE: U.S. Department of Education, National Center for Education Statistics,
Integrated Postsecondary Education Data System (IPEDS);
U.S. Census Bureau; Moody’s Economy.com
16
Michigan’s Competitive Position:
Strong Technical Talent Base
Highly Competitive
Supply of Technical
Talent:

Michigan’s manufacturing
and life sciences heritage
has resulted in one of the
highest concentrations of
technical talent, both
with advanced degrees
and technical certificates,
in the nation.
#1
Engineers per Capita
(2008)
#9
Science &
Engineering Degrees
(2005)
#10
Science &
Engineering: Share
Workforce (2008)
#11
Total Science &
Engineering
Employment (2008)
SOURCE: National Science Foundation
17
Michigan’s Competitive Position:
Strong Innovator
Innovation
Outcomes Rank
Favorably:

Michigan’s university
and industry-based
innovation outcomes
rank favorable against
top tier U.S.
competitor regions
and is a driver of longterm growth.
Rank Among Major Regional Clusters
9
University
$R&D
(2009)
IndustryFunded
University
$R&D
(2009)
Industry
$R&D
(2007)*
Start-Up
Companies
Cultivated
(2005-9)
Patent
Grants
(2005-9)
Michigan
4
6
4
5
3
N. California
1
2
1 (CA.)
3
1
S. California
2
3
1 (CA.)
2
4
Illinois
6
7
5
6
5
Massachusetts
7
4
3
1
2
North Carolina
3
1
7
7
7
Pennsylvania
5
5
6
4
6
SOURCE: 2010 URC Economic Impact Report,
* State Science & Technology Institute
18
Michigan’s Competitive Position:
Geographic Location
Location
Advantages:
Michigan has three unique
geographic advantages that
could be leveraged to
increase exports and
attract foreign direct
investment:
 One of largest U.S. air
hubs to Asia
 Center link of NAFTA
highway
 Closest entry to
Midwest from Halifax
port
Halifax
Port
Asian
Markets
Latin
American
Markets
19
Michigan’s Competitive Position:
Higher Business Costs
Total Business
Costs Greater than
National Average:

Companies pay on
average 3% more in
“total business costs” in
Michigan than the U.S.
average.

Costs can be as much as
19% above the “Top Ten”
states and peers we
most often compete
against for jobs &
investment.
1 Consists of 75% labor costs, 15% energy, 10% state/local taxes
2 States with the same score received the same rank
3 “Top Ten” states for job and economic growth:
KS, MD, MT, NE, ND, SD, TX, VA, WA, WY
SOURCE: North American Business Cost Review; Moody's Economy.com
20
Michigan’s Competitive Position:
Business Taxes Higher Than Competitors
Tax Climate
Improving, but Worse
than Competitors:

New corporate income
tax expected to improve
Michigan to 22nd best
ranking.

Property taxes still high
due to personal property
tax – a tax not assessed by
most states Michigan
competes with.

UI tax increase to repay
federal debt.
1. Includes both real and personal property tax in Michigan
2. Rankings do not reflect recent changes to Michigan Unemployment Insurance
requirements or changes made to Michigan’s corporate and individual income taxes
SOURCE: 2011 BLM Benchmarking Report
21
Michigan’s Competitive Position:
Complex Regulatory Climate
Michigan
Regulatory Climate
Ranked #43:

Regulatory requirements
in Michigan are often
greater than those of
other states and the
compliance process can
be more difficult due to
the multiplicity of
jurisdictions and ease of
doing business.
SOURCE: Pacific Research
22
Michigan’s Competitive Position:
Less Educated Workforce
Education
Attainment Less
than Top Ten
States:

% Adults 25-64 w/BA or Higher Degree
Michigan is competitive
in the amount of talent
it produces, ranking
21st in number of total
college degrees
conferred per capita but
only ranks 31st in the
percent of population
over age 25 with a
bachelor’s degree or
above.
SOURCE: NCHEMS
23
Michigan’s Competitive Position:
Poor Infrastructure
Infrastructure
Impedes Global
Competitiveness:

STRENGTHS
WEAKNESSES
The quality and capacity of
Michigan’s physical
infrastructure limits the
state’s ability to leverage a
strong geographic location
to increase exports and
expand foreign direct
investment in a global
economy.
1. BTS, 2. aapa-ports.org, 3. FAA.com, 4. NTIA,
5. Reason Foundation (Comb. Rural/urban), 6. Detroit Regional Chamber
24
Michigan’s Competitive Position:
Less Attractive Urban Centers
Michigan Cities
Rank Low On
Urban Vitality:


Michigan cities
generally rank low on
most “best cities to
work, live or grow a
business” lists.
Low rankings reflect a
combination of fact and
perception-based
issues that detract from
Michigan’s image.
MICHIGAN:
Highest Rank Cities
SOURCE
Best Cities for Singles
34:
Forbes
Best Places for Business
& Careers
97: Grand Rapids
195: Detroit
Forbes
America’s Top 50 Best
Cities
0
Bloomberg
BusinessWeek
Cities Ranked & Rated
5:
Ann Arbor
Sperling
World’s Most Livable
Cities
64:
Detroit
Business
Week
Best Cities for Families
4:
95:
101:
Ann Arbor
Grand Rapids
Detroit
Parenting
Detroit
25
Michigan’s Competitive Position:
Global Competition Escalating
Michigan
Competes in a
Global Economy :
 The fastest economic
growth is expected to
continue to occur in
emerging global
markets.
1.2
E.U.
(7.1)
MI
20002010
2.3
1.7
U.S.
11.4
8.5
CHINA
5.2
 Michigan’s ability to
accelerate economic
growth is tied to the
state’s ability to
compete in the global
economy.
1.5
0.8
1.3
JAPAN
5.4
AFRICA
3.2
3.9
LATIN
AMERICA
7.6
8.7
INDIA
GDP: 2000-2010
GDP: 2010-2020 (Projected)
SOURCE: The Conference Board
26
Progress:
Lower Unemployment


Michigan’s
unemployment rate
dropped more than
any other state,
except Nevada, over
the past year.
This improvement was
nearly three times
faster than the
national recovery.
16
Seasonally Adjusted Unemployment
Rate
Michigan Has 2nd
Best Recovery of
Any State:
14.1
14
11.9
12
10
8
9.8
9.6
9.8
8.6
2009
2010
2011
8.9
7.3
6.2
6
4.7
4
2
0
2007
2008
U.S.
Michigan
SOURCE: BLS Seasonally Adjusted November Unemployment Rate
27
Progress:
Higher Gross Domestic Product (GSP)
2010 – Above Average
Increase in GDP:

Michigan GDP increased at a
faster rate than most peer
states and nearly as fast as
“Top Ten” states in 2010.

The increase put Michigan
above the national average for
GDP growth for the first time
in a decade.

The increase was largely due
to economic recovery in the
automotive and
manufacturing sectors.
% Per Capita Gross Domestic Product (GDP) Growth
SOURCE: 2011 BLM Benchmarking Report
Ten” states for job and economic growth:
KS, MD, MT, NE, ND, SD, TN, TX, WA, WY
1 “Top
28
Progress:
Higher Per Capita Income
2010 - 7th Best
Increase in Income:
Difference in MI Per Capita Income Growth
Compared to the Nation
6

Michigan’s per capita
personal income increased
by nearly 4% in 2010
which increased the state’s
ranking from 39th to 38th.
The increase was nearly
one and a half times the
national average.
1970-80
1980-90
1990-2000
2000-09
2009-10
3.5
4
2
Percentage Point Difference

1960-70
0.4
0
-2
-1.9
-4
-6
-8
-7.8
-10
-9.9
-12
-14
-16
-14.1
SOURCE: U.S. Bureau of Economic Analysis
29
2012 MTP Overview:
The Goal
“Top Ten” State for Job & Economic Growth =
Higher Personal Income for Michigan Residents
30
2012 MTP Overview:
Characteristics of Top Ten States
DISTINCTIVE
INNOVATIVE
COHESIVE
Known for several
core competencies
and unique assets
that enable
economic growth
Regions
collaborate well to
minimize divisions
and facilitate
progress
Forward-looking
culture that
embraces
entrepreneurism
and innovation
Well-run, fiscally
stable, costcompetitive
locations that are
welcoming to
business
COMPETITIVE
31
2012 MTP Overview:
Potential Results of Growing Like a Top Ten State
Michigan
Per Capita Income
Michigan
Private Sector
Employment
Where We Are (2010)
$34,691
3,338,200 (2011)
“Top Ten” Target (2020)
$49,9661
3,551,9352
Increase Needed to
Reach “Top Ten”
$15,275
+ 213,735 more jobs
1. Based on Michigan accelerating per capita income growth to match the rate
of #10 state Mississippi whose rate was 44%. 2. Employment growth is
accelerated to match the rate of Hawaii which accelerated at 6.4%.
Sources: US Bureau of Economic Analysis and BLS
32
2012 Michigan Turnaround Plan Overview
STEP 1:
STEP 2:
STEP 3:
Responsibly Manage
Finances
Efficiently &
Effectively Provide
Public Services
Create a Competitive
Business Climate
STEP 4:
STEP 5:
STEP 6:
Strategically Invest for
Future Growth
Accelerate the
Economic Growth of
Cities & Metros
Leverage Assets to
Grow the New
Michigan
33
Step 1:
Responsibly Manage Finances
Weak Overall
Fiscal Condition

A scorecard of five key
metrics developed by
Business Leaders for
Michigan to assess the
overall condition of state
and local finances. All
show positive trends in
2011, but operating
reserves, pension
obligations and overall
debt levels continue to
need further attention.
Michigan Fiscal Metrics*
Public budget gap:
Using current year revenues to cover expenses
Cash balances:
Paying current bills with cash on-hand
Reserves:
Equal to 10% of operating expenses
Pension obligations:
Fully funded pension & post-retirement benefits
Debt levels:
Incomes growing faster than debt levels
*Arrows indicate positive or negative trends
Colors indicate whether the metric has been fully achieved
34
Step 1:
Responsibly Manage Finances
Original MTP Goals
& Recent Progress








Public-private revenue estimating
council to improve forecasting
Quarterly survey of Michigan
businesses to improve forecasting
Multi-year financial & budget plans
to improve fiscal discipline
Citizen-friendly balance sheet to
improve transparency
Zero-based budgeting or other
system to increase results
No new programs unless others
eliminated or revenues grow
Strategic plan to set priorities
Require fiscal notes to identify
compliance and other costs
Where We Stand
2012 MTP Goals








 = Accomplished or significant progress
■ = Not accomplished
19 states adopt biennial budgets¹
Revenue estimates are more
volatile in changing economy²
Michigan, as a relatively poor
state, must set fiscal priorities
more than the average state
Increasing Michigan’s bond rating
from AA- to AAA would save
interest costs
State borrowing has increased
over three times the growth of
personal income in the past
twenty years and now exceeds
annual state revenues³
State unfunded pension liabilities
exceed $18B³
Michigan’s unemployment
insurance debt was retired
through an innovative bond
issuance



Set clear spending priorities
• Adopt a strategic plan setting
goals & expected outcomes
• Adopt performance-based
budgeting with ROI measures
“Price” the cost to comply with
proposed legislation
• Adopt fiscal notes for all
legislation
Memorialize sound fiscal
management practices in
legislation or policy (e.g., timely
adoption of a structurally-balanced
budget, two-year budget plan,
citizen-friendly balance sheet)
Reduce debt levels to achieve
AAA bond rating
1. NCSL, 2. Pew Center on the States,
3. 2011 Citizen’s Guide to MI Fiscal Health
35
Step 2:
Efficiently & Effectively Provide Public Services
Greater Return on
Investment:
POOR RETURN
• #34 Student Test Scores1

Significant progress has
been made to reduce the
cost of government in
Michigan.

But more work is
needed to reduce costs
and increase
productivity to improve
the state’s
competitiveness and
reflect its relatively low
per capita income.
• Below Average Public
Sector Productivity Gains2
SIGNIFICANT
INVESTMENT
• #8 Per Capita K-12 Funding3
• 12th Most Units of
Government4
1. ALEC (NAEP SCORES), 2. McKinsey,
3. Anderson Economic Group, 4. U.S. Census
36
Step 2:
Efficiently & Effectively Provide State Services
Original MTP Goals
& Recent Progress






Reduce state workforce
Enact corrections management &
sentencing reforms
Reduce optional services that
exceed federal standards
Eliminate state programs that
duplicate or overlap federal
standards
Benchmark and increase state
employee health care premium
contributions to the average of
U.S. state employees or all
Michigan employees
Benchmark and freeze pay for
state employees to the U.S.
average for state employees
 = Accomplished or significant progress
■ = Not accomplished
Where We Stand
2012 MTP Goals





Average total compensation for
state employees was $22,000
more than the private sector
average in Michigan in 2010¹
Michigan state employees total
compensation is 14% above the
U.S. median state and 22% above
Indiana²
Michigan’s incarceration rate is
51% higher and our prisoners stay
48% longer than the Great Lakes
average. Michigan spends 30%
more to house prisoners than
Ohio and 80% more than Texas²
Government productivity gains in
the U.S. have under-performed
most other sectors for twenty
years3
Improve the cost and
productivity of the state
workforce
• Adopt a total compensation
system that enables the state to
compete for talent in highly
competitive fields and rewards
performance at a cost
comparable to the average state


Reduce corrections costs to the
Great Lakes average
Improve the efficiency of state
government
• Invest in programs that have a
proven track-record of reducing
long-term costs (e.g., prisoner reentry, home health care)
• Adopt best practices to provide
self-directed citizen & business
transactions through the use of
technology
1. BEA Comp. of Employees by NAICS, 2. U.S. Census, 3. McKinsey
37
Step 2:
Efficiently & Effectively Provide School Services
Original MTP Goals
& Recent Progress





Benchmark and increase public
school employee health care
premium contributions to the
average of U.S. state employees
for all Michigan employees
Provide incentives for local district
cost-sharing
Retain demanding graduating
standards
Allow an unlimited number of
charter schools, especially in
under-performing districts
Fully transition teachers to a
defined contribution retirement
system
 = Accomplished or significant progress
■ = Not accomplished
Where We Stand




2012 MTP Goals
Michigan student test scores rank
at (8th grade reading = 32nd) or
below (8th grade math = 37th) the
national average while per capita
spending ranks above average
(8th)1
Average annual salary costs for
public school teachers was $3,370
more (6% higher) than the
average of U.S. public school
teachers in 20092
Michigan has more than 500
school districts – 6th highest in the
U.S.3
The education sector’s
productivity has declined for 20
years in the U.S.4
Improve the return on investment from
the 0-12 education system
• Accelerate the consolidation of
schools where appropriate and the
sharing of school services to direct
more resources to student learning
• Fully transition teachers to a defined
contribution retirement system
• Provide access to quality early
childhood education
• Maintain rigorous standards in
reading, math and science
• Maximize the time students spend on
academic learning
• Attract, train and retain excellent
teachers
• Attract and train excellent school
leaders
• Measure and reward schools,
teachers and school leaders that
perform at a high level
• Improve the collection and use of data
1. NAEP & AEG analysis, 2. National Education Association,
3. U.S. Census, 4. McKinsey
38
Step 2:
Efficiently & Effectively Provide Local Services
Original MTP Goals
& Recent Progress





Encourage & enable local
government service sharing
Modify or eliminate binding
arbitration for municipal police &
fire workers
Adopt best management practices
Align local employee benefits to
average of all Michigan
employees
Adopt competitive tax & regulatory
standards
 = Accomplished or significant progress
■ = Not accomplished
Where We Stand




Michigan has 2,800 units of
local government – 12th highest
in the U.S.¹
Michigan ranks among the top
ten states in the number of
elected officials with over
17,000¹
Local government boundaries
don’t align with regional
economies
State and federal program
boundaries don’t align with
regional economies (e.g.,
Michigan has 25 workforce
development, 17 adult
education, 14 planning and 19
arts regions none of which align
with each other)²
2012 MTP Goals

Advocate state government enable
improvements in local service
delivery by:
•
•
•

Providing incentives & disincentives in
all state programs that recognize local
service sharing
Aligning federal & state program
boundaries with regional economies
Accelerating efforts to consolidate local
administrative services and increase
regional service delivery
Advocate local governments adopt
best practices and “fix the basics”
by ensuring:
•
•
•
•
•
•
•
•
Competitive tax & regulatory standards
Sound fiscal management practices
Strong ethics standards
Effective public safety
Results-oriented redevelopment
strategies
Cost-effective, reliable basic services
Professional communications that
improve perceptions
Support for regional solutions
1. U.S. Census, 2. WMSA
39
Step 3:
Create a Competitive Business Climate
Costs > Value:

Companies compare the
“total cost of doing
business” against a
region’s assets when
evaluating site location
decisions.

Michigan ranks
average to below
average on most site
location factors.

State assets fail to offset
our higher cost
structure.
SOURCE: 2011 BLM Benchmarking Report
40
Step 3:
Create a Competitive Business Climate
Original MTP Goals
& Recent Progress
Where We Stand
2012 MTP Goals









Reform the Michigan Business
Tax to make Michigan more
competitive
Create a regulatory report card
Require regulations to
demonstrate cost/benefit analysis
Annually benchmark Michigan’s
competitiveness
Reform UI system
Eliminate the personal property
tax
Prohibit state regulations that
exceed federal standards





 = Accomplished or significant progress
■ = Not accomplished

Michigan’s corporate tax burden is
projected to rank 22nd, up from 48th,
with the new corporate income tax¹
Michigan’s overall property tax
burden ranks 32nd2
Michigan’s UI tax burden ranks
45th2
Top site location factors include
total costs, workforce skills, taxes,
transportation infrastructure, utility
costs & infrastructure, regulatory
environment, economic
development effort & incentives,
and innovation resources2
Michigan has many barriers
precluding a cohesive culture
toward business, such as having
the 12th highest number of
governmental units3
Michigan’s business climate image
ranks 48th2 and is impacted by the
above conditions
Michigan ranks in the 3rd quartile for
the availability of risk capital4
Benchmark Michigan’s business
costs to Top Ten states
•

Create a responsive, collaborative
regulatory system
•
•
•

•
Align state & local site development
& business regulations
Create a modern, cost-effective
incentives program
Strengthen Michigan’s workforce
•
•
•

Deliver responsive customer service
Align Michigan’s regulatory
requirements with national standards
Require regulations to demonstrate
cost/benefit analysis
Provide a seamless, one-stop
process for business growth
•

Eliminate the personal property tax
Foster a frictionless workforce
environment
Match education & training supply
with workforce demand
Retain & attract skilled immigrant,
mid-career & young talent
Increase capital availability
1. Tax Foundation, 2. BLM Benchmarking Report,
3. U.S. Census, 4. State Science and Technology Index (2010)
41
Step 4:
Strategically Invest for Future Growth (Higher Education)
Growing Need for
Educated Workers:

60% of Michigan workers
will need Associate’s
degree equivalent or
more by 2025.

Michigan will not meet
that need if current trends
continue without
significant new
investments and
approaches to higher
education.
Michigan Projected Degree Gap = 16.6% By 2025
(% 25-64 Year-Olds w/Associate’s Degree or Higher)
Goal
Trend
Future Workforce
Needs
SOURCE: Lumina Foundation
42
Step 4:
Strategically Invest for Future Growth (Higher Education)
Original MTP Goals
& Recent Progress
Where We Stand
2012 MTP Goals


Increase the percent of the Michigan
workforce with post-HS education:

Make Michigan a Top Ten state
for higher education funding
Rationalize the management of 28
community colleges & 15
university campuses to realize
greater administrative efficiency




By 2018, 62% of Michigan jobs
will require post-secondary
education – 39% of Michigan’s
current workforce has postsecondary education¹
Michigan ranks 31st in postsecondary attainment²
Michigan ranks 39th in higher
education state support per
student³
College affordability in Michigan is
low - Michigan has the 10th
highest tuition rate in the nation²,³
Higher education needs to
increase degree productivity by
23% on average to meet future job
requirements⁴
•
•
•
•
By 2022, fund Michigan’s universities
at a level comparable to Top Ten
states if they meet, exceed or are
progressing toward performance
metrics
Adopt outcome-based performance
metrics to fund higher education that
address quality, productivity and
efficiency, affordability and access,
and economic impact
Publish an on-line performance
dashboard
Grow universities’ contribution to
Michigan’s economy and grow our
talent pool by:
•
•
 = Accomplished or significant progress
■ = Not accomplished
•
1.
Increasing out-of-state enrollment to
at least the average of peers without
reducing access for in-state students
Establishing an international tuition
rate similar to other nations
Increase public awareness of the
benefits of higher education
Center on Education & the Workforce, 2. NCHEMS,
3. SHEEO, 4. McKinsey
43
Step 4:
Strategically Invest for Future Growth (Infrastructure)
Key Investments
Could Accelerate
Growth:


Strategic investments could
leverage Michigan’s unique
geographic location to
accelerate job growth.
Growth in the logistics
sector and development of
the Detroit Region
Aerotropolis could create as
many as 180,000 new jobs.1
Detroit
Region
Aerotropolis
Great
Lakes
Freight
Gateway
Statewide
Logistics
Centers
Opportunity to Accelerate
Michigan Job Growth
1. McKinsey Analysis
44
Step 4:
Strategically Invest For Future Growth (Infrastructure)
Original MTP Goals
& Recent Progress
Where We Stand
2012 MTP Goals




Advocate for incentives and
provide support for the Detroit
Region Aerotropolis
Adopt new funding formulas to
support a Top Ten transportation
infrastructure




Michigan ranks #38 in the U.S. in
urban interstate highway condition
and #47 in urban congestion¹
State & local highway spending in
Michigan ranks #48 in the U.S. per
capita²
Michigan has the 15th busiest
airport in the U.S. (Detroit Metro)4
Michigan has the 38th busiest air
cargo airport in the U.S. (Detroit
Metro)4
Detroit is the busiest land border
crossing in the U.S.³
Connect Michigan with the
global economy through
strategic investments in
infrastructure
• Build the New International
Trade Crossing
• Expand international rail freight
access
• Develop the Aerotropolis
• Develop an inter-modal freight
facility
• Increase bandwidth capacity
and access
• Fund investments that improve
Michigan’s highway system to
Top Ten quality
 = Accomplished or significant progress
■ = Not accomplished
1. Reason Foundation, 2. FHWA, 3. Detroit Chamber, 4. FAA.gov
45
Step 5:
Accelerate the Economic Growth of Cities & Metros
Metros Drive
Economic Growth:


Just as in the nation as a
whole, Michigan metros
disproportionately drive
the economy.
Accelerating the growth
of metros is the best way
to accelerate the growth
of both the state as well
as the cities that are
located within them.
*
*Ann Arbor, Battle Creek, Bay City, Flint, Holland, Jackson, Kalamazoo,
Lansing, Monroe, Muskegon, Niles, Saginaw
SOURCE: Brookings, “Michigan’s Urban & Metropolitan Strategy”
46
Step 5:
Accelerate the Economic Growth of Cities & Metros
Original MTP Goals
& Recent Progress

Develop an urban agenda to
revitalize central cities
Where We Stand

•
•


2 of 14 Michigan metros met or
exceeded the U.S. average for
economic output growth
3 of 14 Michigan metros met or
exceeded the U.S. average for job
growth
2 of 14 Michigan metros
performed better than their peers
on economic growth
Michigan metros are more
productive, export-oriented and
talent-rich than the average U.S.
metros
Michigan metros have many
strengths to accelerate economic
growth:
•
•
•
 = Accomplished or significant progress
■ = Not accomplished

From 1980-2009:
•
2012 MTP Goals
Drive 85% of the state’s exports
Home to 90% of science and
engineering employment
Home to 85% of population with
post-secondary degree
Accelerate the redevelopment of
Michigan’s largest cities & metros
with special emphasis on Detroit:
•
•
•

Support regional strategies
designed to strengthen the link
between innovation and
manufacturing to increase exports
and attract global investments
Support strong regional systems to
train existing workers and welcome
new ones to fuel economic growth
Make targeted investments that
leverage distinct assets in urban
and metropolitan areas to transform
regional economies
Support metros’ efforts to improve
delivery of basic public services
(see step 2)
SOURCE: Brookings, “Michigan’s Urban & Metropolitan Strategy”
47
Step 6:
Leverage Assets to Grow the New Michigan
Original MTP Goals
& Recent Progress




Support job growth in all sectors
Grow the entrepreneurial
infrastructure
Develop strategies to grow broad
business sectors that leverage key
assets
Strengthen university-business
collaboration
Where We Stand
2012 MTP Goals






 = Accomplished or significant progress
■ = Not accomplished
Michigan must dramatically
accelerate performance to achieve
Top Ten job, economic and
personal income growth
Actions taken through Steps 1-5 of
the Michigan Turnaround Plan lay
the foundation for Michigan to
accelerate growth
Michigan lacks a consistent, longterm strategy to leverage key
assets that transcend election
cycles
The link between
entrepreneurship, innovation and
manufacturing will be a major
driver of future growth
The nation and world are largely
unaware of the progress Michigan
has taken to rebuild its economy
Champion strategies that
leverage Michigan’s unique
assets to accelerate long-term
economic growth:
•
•
•
•
•
•



Global Engineering Village
Gateway to the Midwest
Higher Education Marketplace
Natural Resource Economy
Global Center for Mobility
Life Sciences Hub
Build support among key
stakeholders for growth
strategies that transcend
election cycles
Support a strong foundation of
entrepreneurship, innovation
and manufacturing
Raise awareness of progress
being made toward building a
New Michigan
48
Step 6:
Leverage Assets to Grow the New Michigan
49
Step 6:
Leverage Assets to Grow the New Michigan
50
Top Ten: Where We Should Be
If Michigan had grown like a Top Ten state since 2000, we would have…
949,510
$7,654
$12,489
More Jobs
More
Income/Person
More
Income/Family (4)
SOURCE: AEG Analysis of BEA & BLS Data
50
A Commitment & A Promise:
From Business Leaders for Michigan

We commit to serving as a catalyst, advocate and champion to transform
Michigan’s economy
•
•

Michigan is our home: We live, work and raise our families here
We believe a vibrant Michigan economy will make our state a place where business
wants to invest and people want to live and work
We promise to sustain our effort for the long-term and take an active role
in leading this transformation
•
•
We will work beyond election cycles to sustain the effort
We will focus on achieving the plan’s goals and welcome different ideas for
achieving them
52
Business Leaders for Michigan: Board of Directors
JAMES B. NICHOLSON
CHAIR OF THE BOARD
PVS Chemicals, Inc.
TERENCE E. ADDERLEY
Kelly Services, Inc
DANIEL F. AKERSON
General Motors Company
G. MARK ALYEA
Alro Steel Corporation
GERARD M. ANDERSON
DTE Energy Company
JON E. BARFIELD
The Bartech Group, Inc.
KURT L. DARROW
La-Z-Boy Incorporated
JAMES P. HACKETT
Steelcase Inc.
STEPHEN P. MacMILLAN
Stryker Corp.
CYNTHIA J. PASKY
Strategic Staffing Solutions
BRAD SIMMONS
Ford Motor Company
DAVID C. DAUCH
American Axle & Manufacturing
RONALD E. HALL
Bridgewater Interiors, LLC
BEN C. MAIBACH III
Barton Malow Company
ROGER S. PENSKE
Penske Corporation
LOU ANNA K. SIMON, Ph.D.
Michigan State University
RICHARD DeVORE
PNC Financial Services Group
RICHARD G. HAWORTH
Haworth
TIMOTHY M. MANGANELLO
BorgWarner, Inc.
WILLIAM F. PICKARD
Global Automotive Alliance
SAM SIMON
Simon Holdings
DOUGLAS L. DeVOS
Amway
CHRISTOPHER ILITCH
Ilitch Holdings, Inc.
RICHARD A. MANOOGIAN
Masco Corporation
SANDRA E. PIERCE
Charter One
MATTHEW J. SIMONCINI
Lear Corporation
J. PATRICK DOYLE
Domino’s Pizza, Inc.
MICHAEL J. JANDERNOA
Perrigo Company
FLORINE MARK
The WW Group
GERRY PODESTA
BASF Corporation
JAMES E. DUNLAP
Huntington
MILES E. JONES
Dawn Food Products, Inc.
SARAH L. McCLELLAND
Chase
CHARLES H. PODOWSKI
The Auto Club Group
BRIG SORBER
Two Men and A Truck
International, Inc.
DAVID W. JOOS
CMS Energy Corporation
CHARLES G. McCLURE
Meritor, Inc.
STEPHEN R. POLK
R. L. Polk & Co.
HANS-WERNER KAAS
McKinsey & Company
DAVID E. MEADOR
DTE Energy Company
JOHN RAKOLTA, JR.
Walbridge
ALAN JAY KAUFMAN
H. W. Kaufman Financial Group
HANK MEIJER
Meijer, Inc.
ANDRA M. RUSH
Dakkota Integrated Systems, LLC
JOHN C. KENNEDY
Autocam
MICHAEL MILLER
Google, Inc.
DOUG ROTHWELL
Business Leaders for Michigan
STEPHEN M. KIRCHER
Boyne Resorts
MARK A. MURRAY
Meijer, Inc.
JOHN G. RUSSELL
CMS Energy Corporation/
Consumers Energy Company
JAY B. KNOLL
Energy Conversion Devices, Inc.
CATHLEEN H. NASH
Citizens Bank
BLAKE W. KRUEGER
Wolverine World Wide, Inc.
THOMAS D. OGDEN
Comerica, Inc.
ANDREW N. LIVERIS
The Dow Chemical Company
JAMES O’LEARY
Kaydon Corporation
DANIEL J. LOEPP
Blue Cross Blue Shield of
Michigan
WILLIAM U. PARFET
MPI Research
ALBERT M. BERRIZ
McKinley, Inc.
FREDERICK H. EPPINGER
The Hanover Insurance
Group, Inc.
MARK J. BISSELL
BISSELL Inc.
JEFF M. FETTIG
Whirlpool Corporation
STEPHEN J. BOSHOVEN
Foremost/Farmers Specialty
Insurance
WILLIAM CLAY FORD, JR.
Ford Motor Company
STEPHEN CARLISLE
General Motors Company
KIETH COCKRELL
Bank of America
MARY SUE COLEMAN
University of Michigan
TIMOTHY P. COLLINS
Comcast Cable Corporation
ROBERT S. CUBBIN
Meadowbrook Insurance Group, Inc
YOUSIF B. GHAFARI
Ghafari Associates, LLC
DAN GILBERT
Quicken Loans, Inc.
ALLAN D. GILMOUR
Wayne State University
ALFRED R. GLANCY III
Unico Investment Company
DAN GORDON
Gordon Food Service, Inc.
STEPHEN E. GORMAN
Delta Air Lines, Inc
RICHARD F. RUSSELL
Amerisure Mutual Insurance
Company
ALAN F. SCHULTZ
Valassis
ALAN E. SCHWARTZ
HONIGMAN
J. DONALD SHEETS
Dow Corning Corporation
DONALD J. STEBBINS
Visteon Corporation
DOUGLAS W. STOTLAR
Con-Way, Inc.
ROBERT S. TAUBMAN
The Taubman Company
SAMUEL VALENTI III
TriMas Corporation
STEPHEN A. VAN ANDEL
Amway
MICHELLE L. VAN DYKE
Fifth Third Bank
TIMOTHY WADHAMS
Masco Corporation
BRIAN C. WALKER
Herman Miller, Inc.
WILLIAM H. WEIDEMAN
The Dow Chemical Company
WILLIAM C. YOUNG
Plastipak Holdings, Inc.
53
www.MichiganTurnaroundPlan.com
© 2012 Business Leaders for Michigan
47