By Rick Haglund/Bridge Magazine correspondent
Gov. Rick Snyder campaigned for the state’s top elected office in 2010 with a promise to “reinvent” Michigan.
Although Michigan’s economy has performed a U-turn from a decade of job losses, most other measures on the scorecard show the state is essentially running in place.
Of the 28 areas assessed in the scorecard, five showed improvement, five went backward and 17 experienced no change. Another category, environment, is being reviewed under a standard this year than was used in the 2010 scorecard.
“It’s no surprise that results would be mixed, especially when you consider that Michigan is still overcoming the fiscal and economic challenges of the past decade,” said Snyder administration spokesman Ken Silfven. “That’s reflected on the state’s own dashboard as well.”
“The Michigan Scorecard benchmarks the state’s performance on measures citizens deem most important for the state’s transformation to a new era of prosperity,” said John Bebow, the center’s president and CEO.
Those benchmarks encompass three broad areas:
* Talent and education;
* The economy and quality of life;
* Effective, efficient and accountable government.
Statistics used in the ranking come from the latest available public data, as of January.
If there’s one area where life is getting better for Michigan residents, it’s the economy. Employment, personal income and exports all have improved since the last scorecard in 2010.
Personal income and employment jumped from “poor” in 2008 and 2010 to “average” in this year’s assessment. And data released since the scorecard was compiled has shown the momentum is continuing.
Michigan per capita income rose 5.2 percent last year, slightly above the national average of 5.1 percent. That was the fifth-fastest increase among the states.
But Michigan’s per capita income of $36,533 last year still was only the 36th highest in the country. Michigan ranked 19th in per capita income as recently as 2000.
Update: Michigan has added about 160,000 payroll jobs since the state economy hit bottom in December 2009. That’s mostly a result of a recovery by the auto industry and the broader manufacturing sector. Still, the state is down about 700,000 jobs from its May 2000 high of nearly 4.7 million payroll jobs.
Alabama and Michigan tied for having the biggest unemployment rate drop in the nation, with each state posting a 2 percentage-point decline between March 2011 and this past March.
Update: Michigan’s unemployment rate has fallen from a recent high of 14.2 percent in August 2009 to 8.3 percent in April. But the April jobless rate still is substantially higher than it was throughout most of 1990s, prior to what some called Michigan’s “lost decade” of economic decline.
“The glass is getting fuller, but it still has a lot of emptiness,” said Michigan State University economist Charles Ballard, an expert on the state economy.
State slips on ‘knowledge’ front
Michigan, though, has slipped in the scorecard’s measure of economic transformation, falling to “average” from “good” in 2010 and 2008.
The downgrade was due mainly to a sharp drop in knowledge economy employment.
Michigan still ranks 12th among the states in the number of knowledge-economy businesses — and the jobs they create. But Michigan is not keeping pace on creating more such jobs.
Knowledge jobs fell 5 percent between 2008 and 2010, the latest period available, plunging Michiganto a “growth” ranking of 47th nationally.
Michigan’s economy is still heavily dependent on doing what it has done for more than a century — making things. A study released this month by the Washington, D.C.,-based Brookings Institution found that since 2010, Metro Detroit had the second-highest percentage increase in manufacturing jobs of any metro area in the country.
Snyder’s focus on boosting Michigan’s economy has centered on restructuring the tax code, in part by giving businesses a $1.7 billion tax cut.
The state’s business tax climate ranks 18th this year, down from 17th in 2010, according to the Tax Foundation. But the ranking does not reflect the switch from the Michigan Business Tax to a 6 percent corporate income tax, which took effect in January.
the Tax Foundation lauded the MBT repeal and said the switch to the simplified corporate income tax will improveMichigan’s ranking next year.
Poverty rate climbs
Despite the state’s economic recovery, Michigan has made no progress in alleviating poverty, according to the scorecard.
Overall, the percentage of Michigan residents living in poverty jumped from 13.5 percent in 2006 to 16.8 percent in 2010. No Great Lakes state had a higher proportion of its residents living in poverty.
Although it doesn’t exactly qualify as good news, 33 states had faster rates in the growth of poverty than Michigan between 2009 and 2010.
Higher education becomes flashpoint
Major concerns remain about the state’s ability to attract talent and educate its citizenry for a more complex, technologically advanced economy revealed in the scorecard.
Michigan gets “poor” grades in K-12 investment, student performance, higher education investment, college affordability and college graduation rates.
Those grades roughly track with the Snyder administration’s dashboard indicators of progress in education.
“We’re not vaulting to the head of the class in terms of our educational outcomes,” MSU’s Ballard said. “That’s a concern for the long run.”
Snyder and the Legislature took $1 billion from the School Aid Fund last year to fund higher education, drawing sharp criticism from local school districts.
Business Leaders for Michigan, a group of the state’s top business and university leaders, is calling for a greater investment in higher education. Currently, the state spends $1.1 billion a year on its universities, compared to $2.5 billion by North Carolina.
“Our state cannot afford to continue to continue its recent trend of declining investment in the talent pool of tomorrow,” Domino’s Pizza CEO J. Patrick Doyle said at a recent BLM conference on higher education, according to the Associated Press.
“Michigan faces a very real shortage (by 2025) of nearly 1 million workers with a two-year degree or better, so we need to think about educating and developing our workforce,” Doyle said.
But allocating significantly more money for higher education is likely to be a tough sell in the Republican-controlled Legislature, where many lawmakers view the universities as wealthy, free-spending institutions.
The ‘good,’ the ‘poor’ and otherwise
The scorecard assigned “good” grades to high school completion rates, research and development, exports, the percentage of residents owning a home, philanthropy, the environment, government efficiency and voter participation.
Among the 14 areas rated “poor” were availability of venture capital, population growth, public safety, arts and culture, infrastructure and political leadership.
The political leadership grade reflects low job approval ratings for Snyder and the Legislature.
Snyder started his term in 2011 with relatively strong ratings; 44.5 percent rated his job performance as good or excellent in MSU’s State of the State survey.
But by fall of last year, Snyder’s approval rating had slipped to 19 percent, about where former Gov. Jennifer Granholm stood near the end of her term in 2010.
Ballard, who leads the MSU survey, attributed Snyder’s poor rating to frequent attack ads being run against him by Ambassador Bridge owner Manuel Moroun and Snyder’s unpopular first budget, which extended the personal income tax to pensions.
And in the latest survey, released Wednesday after the Scorecard had been compiled, the percentage of voters rating Snyder’s work as good or excellent had climbed back to 33 percent.
The Legislature had a 48 percent disapproval rating in the Marketing Resource Group’s Mood of the Michigan Electorate poll in 2011. In February 2012, Publlic Policy Polling found that only 20 percent of voters approved of Republicans in the Legislature, while 36 percent approved of the Democrats.
Even with the political numbers, Silfven said the center’s Michigan Scorecard provides valuable information to guide policy-makers and citizens for the future.
“These types of measurements are helpful in gauging how far we’ve come and how far we still have to go,” he said. “We know the work that still lies ahead. So it’s up to all of us — policy-makers and stakeholders — to rise to the challenge.”
Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.