Michigan’s riding high. But a downturn is coming and the safety net is frayed.

Michigan is enjoying an economic renaissance, but leaders aren’t doing enough now to address systematic problems with poverty, inequality and education.

That was the conclusion of a group of philanthropic, business and education leaders who gathered in Detroit on Thursday to discuss the state’s opportunities and challenges at The Center for Michigan and Bridge Magazine’s Solutions Summit on Personal Property.

One big problem: The state’s safety net remains frayed, and too many residents aren’t participating in the recovery because of unsolved problems in education, workforce development and transit, officials said. The state should invest in solutions now, they said.

“This is the time to do it,” said Dan Varner, CEO of Goodwill Industries of Greater Detroit.

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Many continue to struggle despite the lowest unemployment rates in 17 years and an economy that has put hundreds of thousands back to work, said Nancy Lindman, director of public policy and partnerships for the Michigan Association of United Ways.

She said 40 percent of Michigan families cannot meet basic needs, most of whom are the working poor.

“We are talking about people who are working who aren’t able to support their families,” Lindman said.

Varner, Lindman and other experts at the summit said the state should help more residents by:

• Increasing access to  post-secondary training, be it a college degree or a skilled trade. Forty-three percent of Metro Detroiters now have post-secondary credentials; a group organized by the Detroit Regional Chamber of Commerce wants to push that to 60 percent by 2030.
• Improving transit so more residents have access to jobs and education. Recent disputes about paying to expand transit in southeast Michigan are “myopic” and harmful to the region, said David Egner, president and CEO of the Ralph Wilson Jr. Foundation.
• Fortifying state aid for child-care and food assistance. Michigan pays little to help working poor with child care costs. (Only Kentucky makes it harder to get state-sponsored child care.to school or work through better transit.) And legislators are now talking about work requirements for Medicaid.  

“The erosion of the safety net is real,” said Gilda Jacobs, president and CEO of the Michigan League for Public Policy.

Most of the problems identified could be solved, in part, by greater investment (read: higher taxes). But in a state where politicians routinely talk about cutting them, the idea of increasing revenue is a tough sell.

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Sandy Baruah, president and CEO of the Detroit Regional Chamber of Commerce, said his and other pro-business groups have been torn lately by the climate in Lansing: They want investment in education, infrastructure and other areas that will cost money.

But pro-business groups also want the state to remain business friendly, and a bump in taxes could imperil the benefits – for businesses at least – of the 2011 tax reform package that slashed $2 billion in taxes from businesses.

That tension remains today: The state needs more money to accomplish important tasks. But where does that money come from? From businesses? From residents who have seen incomes erode?

“I don’t know anyone who knows the answer,” Baruah said.

Despite the urgency, there are plenty of hopeful signs, experts said, including increased regional cooperation.

Students at Wayne State University are getting more help with internships; the city schools are opening their vocational facilities for after-hours classes for adults.

And Baruah pointed out that Detroit, even with the problems in the neighborhoods, is being transformed.

“It’s just getting vibrant and feels like some of the cities I grew up in, Portland and DC,” Baruah said.

Kim Trent, a native and former Detroit journalist who’s now a member of the Wayne State Board of Governors, sees it too.

“You’re seeing an interest in the city that honestly you haven’t seen in my memory,” she said.

But, as a resident with family living far from downtown, she said she’s also aware that not everyone in the city has enjoyed the recovery.