The case for raising taxes II
Terrific Larry Gabriel column in the Metro Times. It is about the causes of Detroit’s horrible population decline. Now the 18th largest city in the country, down from 4th. As Gabriel points out the problems may be worse in Detroit, but the whole state is facing the same challenges. Too many mobile individuals don’t want to be here!
Much of Gabriel’s column is based on the must read speech Paul Hillegonds gave at Grand Valley. Gabriel writes:
Hillegonds told me over the weekend… “Having worked for 15 years in the city of Detroit, through my experience at Detroit Renaissance and DTE, you realize that a cornerstone of urban revitalization is K through 12 and higher education. You need educated twenty- and thirtysomethings who want to live in the city. You can’t sustain that growth without some public investments. It’s not that taxes are unimportant to the business climate, but a more highly educated workforce is more important.”
Hillegonds has turned around on some issues because he paid attention to the facts rather than ideology. He pointed out some revealing statistics in his GVSU address.
“In 2008, of the 55 U.S. metro areas with populations of 1 million or more, Detroit ranked 33rd in knowledge-based industries concentration, 36th in per capita income and 37th in college attainment. Metro Grand Rapids lagged even more, ranking 54th in knowledge-based industries concentration, 53rd in per capita income and 45th in college attainment. Over the past 10 years, state funding for higher education has been cut by 27 percent. Michigan is now 42nd among the 50 states in per capita support, reflecting the fact that higher education has been a less important state priority than prisons and tax cuts. … Michigan Future’s analysis of extensive tax and economic data found that the most successful states are not characterized by low taxes. If anything, they tend to be more high-tax states than low. On the other hand, states with the lowest taxes tend to have lower per capita incomes, lower concentrations in knowledge-based enterprises and lower proportions of adults with four-year degrees or more.”
As Paul said: “You can’t sustain that growth without some public investments. It’s not that taxes are unimportant to the business climate, but a more highly educated workforce is more important.” End of story!
The reality is Michigan’s lost decade came when we were lowering taxes (that’s right taxes went down, not up) and cutting public investments in higher education and quality of place (think revenue sharing, the arts, transportation, etc.). That is the recipe for getting poorer.