Next Michigan governor needs 'laser focus' on prosperity, biz group says

Michigan’s prosperity metrics continue to lag the nation’s
A new report offers a roadmap to the next governor, offering strategies that could markedly improve the state
Business Leaders for Michigan, which authored the report, urges focus on education, the workforce and business fundamentals

Michigan’s next governor will need to turn around the state with unifying and decisive leadership on education, talent and competitiveness, a leading business group says.

Business Leaders for Michigan on Monday is releasing a plan for how the winner of the 2026 gubernatorial election can boost the state’s economic performance and increase prosperity.

“What a governor focuses on, especially at the beginning of their tenure, can really define the next four to eight years of activity,” said Jeff Donofrio, president and CEO of the group.

The governor, the report notes, “is the only leader positioned to reverse our slide and overcome fractured governance, competing priorities and diffuse accountability.”

Donofrio said the 40-page “Michigan in a New Era” is a roadmap for state success when voters choose its next leader. So far, the race is crowded with many candidates seeking the job.

“‘Michigan in a New Era’ is not an assessment of what any one administration did or did not do over the last 30 years,” Donofrio told Bridge Michigan. “It is a forward-looking plan focused on where Michigan stands today and what we must do to compete and succeed in the future.

“The trends highlighted in the plan have developed over decades, across multiple administrations and economic cycles.”

He said the focus of the report “isn’t on assigning credit or blame. It’s on establishing a consistent, nonpartisan direction for the decade ahead so Michigan can win in a rapidly changing world.”

Accelerating growth

The report hones in on Michigan’s potential to overcome what Donofrio called “decades of slow growth, industrial disruption, talent outmigration and inconsistent policies” that have left the state playing catch-up as other states increase prosperity.

Doing so, he said, is “a pathway to faster growth, to higher wages, to lower costs.”

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The annual “north star” for Business Leaders for Michigan has long been to move the state into the top 10 for household income, residents completing some higher education and other metrics of prosperity and growth.

But attaining that goal remains a struggle: Benchmarks compiled over many years by the advocacy group that represents leaders of the state’s top businesses show over and over that the state lags behind most others in key economic measures.

While the nation has grown, Michigan:

Ranks 50th in household income growth over the past 25 years
Shows flat growth in high-wage professional jobs over 20 years, while they’ve grown 35% nationally
Fell from 16th to 44th in fourth grade reading over 30 years
Posts one of the highest chronic school absenteeism rates in the nation.

To battle falling further, the report says the next administration needs to focus on “changing what’s within our control — three areas that, when working well, have the greatest power to change our state’s trajectory.”

Governor-driven leadership on education

Michigan’s education system is front and center in the business group’s roadmap for the new governor, Donofrio said.

Jeff Donofrio is CEO of Business Leaders for Michigan. The group says it represents companies responsible for 40% of the state’s economy.

The report notes that over decades “diffuse control and lack of accountability across the system have slowed progress.”

The next governor needs to take ownership of systemic reform to break through this gridlock, it adds. That includes building a coalition to do so, even in areas — like the independently elected state Board of Education — where there is no direct line of authority.

“They can make sure that there’s adequate funding, that there’s shared accountability systems in place to make sure that we’re actually driving outcomes,” Donofrio said of whoever is next elected to lead the state.

“We need to give the governor more authority, but we can’t wait for the governor to get more authority to actually take this on and do it at this moment,” he said of education reform in particular.

Michigan spent an inflation-adjusted $2.1 billion starting in 2015 toward a 10-year plan to move the state’s schools into the nation’s top 10.

Instead, students fell further behind. For example: Students in more than three-quarters of Michigan school districts have lost more than half a grade in reading since 2019, recovering from the pandemic far less than districts in other states.

Beyond that, Michigan fell from 16th to 44th in fourth grade reading since 1998. In that same time frame, Mississippi — which receives less funding per pupil — moved from 49th to ninth in fourth grade reading.

The goals laid out in the report reframe education “not as a siloed issue, but as central to Michigan’s long-term competitiveness and prosperity.”

They include:

Ensuring every child can read by third grade
Tackling chronic absenteeism
Setting a high standard for a high school diploma
Seamlessly connecting students to apprenticeships, college and careers.

Consolidation or other structural changes may also be needed, Donofrio said, given the 700 local school districts serving a declining student population.

Industry understands that improving education in Michigan is critical, Jim Holcomb, CEO of the Michigan Chamber of Commerce, told Bridge.

“The best way to improve our economic standing is to improve our education system,” Holcomb said.

Targeting business issues

Two “Michigan in a New Era,” priorities for business and the economy also align with goals set by the state’s network of trade groups.

The first: Streamlining regulations to make Michigan the easiest state for building and growth. As an example, the report said, project approvals in Ohio may take weeks, compared to months in Michigan.

“We know that inefficiency and delays are costly,” Donofrio said.

Streamlining bureaucracy is “not about sacrificing health or environment,” he added. “It’s about making sure we have faster, more predictable approval processes.”

The state also needs to modernize economic development, the report said, with consistent vision that moves away from “crisis-driven” strategy. That often has meant striving to replace auto manufacturing jobs as a cost of diversifying the economy.

Existing businesses also should be rewarded for investment and growth, it added.

The next governor, Donofrio said, needs to be “laser-focused on creating high wage jobs, making sure that Michiganders are ready for them, and that we can incubate new companies and new industries.”

During Gov. Gretchen Whitmer’s administration, efforts to grow the state’s semiconductor industry have represented diversifying. However, Bridge research also showed that the state’s incentives largely support low-wage jobs.

“There’s not a lot of confidence in the economic development strategies that we have,” Holcomb said. “We have to have a strategy that brings people along and creates buy-in.”

The gubernatorial roadmap represents a good approach to strengthening small businesses in the state, said Brian Calley, CEO of the Small Business Association of Michigan and lieutenant governor during Rick Snyder’s administration.

“There’s a desire in politics these days to have new and flashy things,” Calley told Bridge. “I would love to see a bigger focus on the fundamentals.”

Michigan lawmakers already have taken steps to reform economic development, this fall defunding the largest cash-for-jobs subsidy program and introducing bills to eliminate the Michigan Economic Development Corporation.

Those moves follow two years of bipartisan division over the value of business growth incentives, which grew into $2 billion -plus of spending toward projects promising thousands of jobs. But few jobs have materialized so far as many of the projects stalled or imploded, in part because of community backlash.

Focus on improvement

A better, wholistic approach to the state’s economic well-being

“can increase wages,” Donofrio said. “It can create pathways to the middle class by those stepping-stone jobs. And can make sure that we’re a magnet for talent.”

At the same time, existing Michigan business owners will be looking for a governor who can make them feel rewarded for their efforts, Holcomb, of the Michigan Chamber, said.

“Many business owners feel like they have been ignored even when they’ve focused on making the community stronger and being great employers,” Holcomb told Bridge.

Donofrio said “Michigan in a New Era” was a year-long project, involving many conversations and polls and the plan won’t sit on a shelf until a January 2027 swearing-in.

“This is for leaders now,” Donofrio said. “This is for leaders in the future. We’re talking to the Legislature, we’re talking to the governor, we’re talking to everybody about the need to make sure that we have that unified vision … to move forward.”