So if the prestigious Milliken/Blanchard panel laid out a framework for state policy makers on tax and spending policies that will help grow the Michigan economy, why have their recommendations been ignored?
I think there are three main reasons:
1. As we have learned the last several years both raising taxes and cutting spending are hard. They have to be done, but no policy maker gets rewarded for doing either. So when folks like us come along and say you need to do more of both so as to create the resources needed for priority public investments, we are asking policy makers to take actions that most of their constituents don’t want.
2. Few policy makers believe public investments are important to growing the Michigan economy. Our framework that talent is what is driving the economy so that preparing, retaining and attracting talent is the economic growth priority is not widely accepted. Spending on higher education and quality of place – our priorities – are viewed by most policy makers as not strategically important. They are just another category of spending competing with all the other categories of spending.
3. Which leads to the final barrier: no business leadership. We have long asserted that business leadership is needed even more than political leadership. Elected officials need a constituency for their actions – particularly when they are asking people to make sacrifices. Getting the resources for the needed public investments will involve a lot of sacrifices. Someone with clout and credibility needs to be publicly urging policy makers to follow this path.The folks with the greatest clout and credibility on the economy are business leaders. Unfortunately, by and large, public investments have not been on their priority list. Instead its the usual lower taxes, less government mantra.
Those of us who believe public investments are the most important action policy makers can take to recreate a high prosperity Michigan need to recognize these three barriers to action and develop new ideas/strategies for how we overcome them.