In 2011 significant progress was made in addressing the first three steps of the Michigan Turnaround Plan (MTP). These recommendations represented “fixing the basics” – common sense actions needed to set Michigan on sound financial footing and put in place practices to make Michigan competitive over the long-term.
Step 2 of the MTP focuses on providing state and local government and local public school services in an effective and efficient manner. Several key measures were enacted last year to advance this area, including:
· Legislation to bring school employees’ share of health care costs in line with the private sector
· Contract negotiations that brought state employees’ share of health care costs in line with the private sector
· Legislation to make a local community’s ability to pay the primary consideration in contract arbitration with local police and fire services
· Legislation amending several state statutes to remove barriers that had previously made it difficult for local governments to consolidate services
In 2012 and beyond, our focus needs to turn to the following at the state level:
· Improve the cost & productivity of our state workforce by adopting a total compensation system that enables the state to compete for talent in highly competitive fields and rewards performance at a cost comparable to the average state
· Reduce corrections costs to the Great Lakes average
· Improve the efficiency of state government by i
For our public schools, we need to improve our return on investment by accelerating the sharing of school services and the consolidation of schools where appropriate, and by fully transitioning school employees to a defined contribution retirement system. These measures will direct more resources to improving student learning through proven methods, including:
· Providing access to quality early childhood education
· Maintaining rigorous standards in reading, math and science
· Maximizing the time students spend on academic learning
· Attracting, training and retaining excellent teachers
· Attracting and training excellent school leaders
· Measuring and rewarding schools, teachers and school leaders that perform at a high level
Our local governments should adopt their own Turnaround plans that include steps to “fix the basics” by ensuring:
· Sound fiscal management practices
· Cost-effective, reliable basic services
· Strong ethics standards
· Effective public safety
· Competitive tax & regulatory standards
· Results-oriented redevelopment strategies
· Professional communications that improve perceptions
· Support for regional solutions
State government can enable improvements in local service delivery by:
· Providing incentives & disincentives in all state programs that recognize local service sharing
· Aligning federal & state program boundaries with regional economies
· Accelerating efforts to consolidate local administrative services and increase regional service delivery
In 2011, great strides were made toward getting the state on sound financial footing and improve the tax and regulatory environment. In 2012 we need to build on those efforts at state and local levels to help make Michigan as competitive as possible.
There is a lot of discussion in the world today about the debt being racked up by many nations. In most cases, this debt was accumulated after years of not following sound fiscal and accounting practices. America is a good example. For years we’ve failed to balance our budget, based budgets on overly optimistic revenue forecasts and did not take into consideration the long-term costs of our policy actions. Our growing debt obligations has led to a great deal of uncertainty about the future. This has caused job providers to slow investment and consumers to cut back on spending. Michigan experienced much the same situation during the past decade and this has contributed to our “one state, decade long” recession.
This is why Business Leaders for Michigan made the first step of the Michigan Turnaround Plan about responsibly managing finances. The Plan is a holistic, fact-based strategy to make Michigan a Top Ten state for job, economic and personal income growth.
Our original plan called for the state to manage its money the way a responsible household or business would – by balancing the budget without one-time gimmicks, projecting revenues using sound information and projecting spending needs over the long-term. Fortunately, the state has implemented many of these suggestions during the past year and as a result has been able to start paying down debt and generating a small budget surplus. As a result, business confidence is up and Michigan’s economy is turning around.
We must build on the solid foundation laid this past year by memorializing in policy or law the practices outlined above so we don’t slip back into bad habits after this Governor and legislature leave office. We need to continue paying down the billions of debt we racked up the past decade and require that every piece of proposed legislation have a “price tag” attached to it so policy makers understand the consequences of their actions. We also recommend the state adopt a long-term strategic plan that clearly identifies what we should expect from state government to guide annual budgets.
Adopting sound accounting practices and fiscal policies don’t get much attention in the news. But we’ve seen around the world what happens when we ignore these basics.
Business Leaders for Michigan today released the 2012 Michigan Turnaround Plan (MTP) to make Michigan a Top Ten state for job, economic and personal income growth. The new version of the Plan reflects BLM’s optimism for Michigan’s future based on progress made during the past year that aligns with the original Plan’s recommendations and the opportunities this progress provides for building a vibrant state.
The 2012 MTP, similar to the original that was issued in 2009, outlines the case for change, Michigan’s competitive position, specific action items and the potential outcome of following the recommendations. It is organized into six steps:
Steps 1- 4 of the 2012 MTP continue to place a strong emphasis on improving the fiscal and business climate of Michigan by reiterating the need to implement unfinished work from the original Plan and outlining additional reforms. But the Plan also reflects BLM’s view that the past year’s accomplishments have set the stage for Michigan to “push the pace” of growth faster than was originally projected.
BLM originally forecast it would take five years to fully implement the Plan and ten years to achieve the economic benefits. But great strides have been made toward restoring our state. Much of original Plan has been fully or partially achieved and Michigan has begun to see evidence of economic turnaround with lower unemployment, higher economic growth and rising incomes.
In recognition of this progress, the 2012 MTP expands the Turnaround agenda by:
The New Michigan strategy is the most prominent feature of the new Plan. It recognizes that while fiscal, budget, tax and business climate reforms are critical, they are insufficient for Michigan to become a Top Ten state in today’s economy. Regions around the nation and world that have been most economically successful leverage their unique assets to become growth leaders.
Step 6 of the 2012 MTP: Leveraging Assets to Grow the New Michigan, identifies distinct Michigan strengths and their inherent opportunities for long-term economic growth in Michigan:
Rather than picking business sectors to attract to the state, BLM views building on prominent assets already in Michigan as the best path to growth. These assets were identified after researching a wealth of data, case studies and turnaround models from similar economies around the globe. Each of the opportunities identified promises tremendous potential for success. Together, they have the potential to make our state into a vital economic powerhouse.
For instance, by capitalizing on its core strengths, Michigan has the potential to increase current growth projections by as much as 40 percent, add up to half a million jobs and grow the personal income of each Michigan resident by as much as $18,000 by 2020.
It merits emphasis that these assets can only be leveraged by simultaneously pursuing the first five steps of the Plan and cultivating a strong entrepreneurial, innovation and manufacturing environment.
Like the original Michigan Turnaround Plan, the new version will need the support and help of all Michiganders to fully realize. This includes government, civic and business leaders, private sector and supporting organizations and those guiding economic development. We invite you to be part of this work. Each of us can have a role in Michigan’s turnaround. Please share the 2012 MTP with your colleagues, organizations you’re a part of and with those that might be interested in learning about what Michigan can become if we focus our efforts. You can view and download the video and find additional information at www.MichiganTurnaroundPlan.com.
Six months ago we declared Michigan’s economic turnaround had begun based on the dramatic reforms being passed in Lansing that align with the Michigan Turnaround Plan and the optimism these changes were fueling among our members – Michigan’s largest job providers. The skeptics wanted to wait until the hard data came in. Now it has and it says Michigan is in full turnaround mode.
Michigan’s unemployment level has dropped faster than the national average while personal income and the overall level of economic output is rising faster than most states over the past year. The rebound of our automotive industry and the manufacturing sector have been major drivers of these improvements and it underscores the importance of continuing to support these critical businesses. But the state’s turnaround is also being powered by businesses from all sectors, large and small, that are gaining renewed confidence in Michigan as a place that is finally committed to a long-term turnaround.
When Business Leaders for Michigan unveiled the Michigan Turnaround Plan in 2009, we thought it would take five years to implement most of the recommendations and another five to see major results. In one year, thanks to a tremendous commitment from Gov. Snyder, Senate Majority Leader Randy Richardville and House Speaker Jase Bolger to accelerate Michigan’s job recovery and return our state to prosperity, much of the original Michigan Turnaround Plan either has been fully or partially addressed. We are already seeing tangible economic benefits. From adopting long-term budget plans and aligning public sector employee benefits with the private sector to getting Michigan’s business taxes in line with other states and reforming archaic regulations, Michigan is on a path to global competitiveness.
One year doesn’t complete an economic turnaround and, after a decade of decline, Michigan will need several more years of progress to accelerate growth as fast as we would like. But 2011 was the year the state’s long-awaited turnaround began. Happy New Year 2012 – you have a hard act to follow.
Business Leaders for Michigan is proud to be one of 20 major organizations sponsoring the 2010 Great Debates organized by The Center for Michigan. Launched this year, this debate series includes more than 50 statewide debates for the gubernatorial and legislative elections. On October 10th, as part of the 2010 Great Debates series, the Center for Michigan hosted the only gubernatorial candidate debate between candidates Rick Snyder and Virg Bernero. If you missed the gubernatorial debate or are interested watching any of the legislative debates you can view them by visiting The Center for Michigan’s website.
Proposal 1 on the November 2, 2010 general election ballot will ask voters whether or not a Constitutional Convention should be convened to redraft the state’s Constitution. It is a provision of the current Constitution that the question be automatically placed before the voters every 16 years. If approved, primary and general elections would be held in February and May of 2011 to select 148 convention delegates on a partisan basis. The last time a convention was held, the entire process from beginning to end took over two years.
Michigan cannot afford to effectively be put on “pause” for two years or more while a Con‐Con does its work. It will cost the state at least $45million to hold the special elections and conduct the actual Constitutional Convention. Most importantly, a Con‐Con will create even more uncertainty and anxiety for Michigan’s job providers and schools, community colleges and universities as critical investments, initiatives, and reforms will be delayed.
Leading groups representing agriculture, education, faith, manufacturing, labor, business – both large and small, transportation and infrastructure, real estate, and medicine have joined together to urge voters to vote now on Proposal 1. For the list of groups, click here.
For more information, please visit www.NoMichiganConCon.com.
This question is taken from Business Leaders for Michigan’s one-page tool for voters, “10 Questions Every Voter Should Ask Candidates Running for State Office.” The questions address the most urgent issues facing all Michiganders – the economy and jobs.
Ask your candidate, “Will you support a pay as you go policy that would prevent the state from adopting new programs without being able to pay for them?”
Why is this question important?
When Michigan was a wealthy state, it could afford to fund all programs well and not set priorities. But with per capita income at 37th in the nation, we are now a relatively poor state, and need to set spending priorities that will re-grow the state’s economy. Since 2000, state tax revenue has declined or been flat. However, the state has continued to add new programs, which has exacerbated budget shortfalls while state revenues have declined. Unless revenues increase or other program expenses are reduced, the state should not be adding new programs that create additional unsustainable spending pressures.
Here are some answers voters should look for from candidates for State office:
In its Michigan Turnaround Plan, Business Leaders for Michigan proposes that legislators adopt no new programs unless eliminating others or revenues grow. This will help instill fiscal discipline and put the state back on a sustainable budgetary path. To help with adopting priorities, the state could:
· Adopt a strategic plan with clear goals, expected outcomes and metrics.
· Require fiscal notes for all new legislation and regulations estimating the implementation costs on government and business.
· Adopt zero-based or similar budgeting systems to increase results.
· Adopt no new programs unless eliminating others or revenues grow.
The full list of questions can be found at: www.michiganturnaroundplan.com. The Michigan Turnaround Plan is a holistic, fact-based strategy to get Michigan’s economy back on track.
Over the past eight months, many organizations around the state, thousands of individuals and nearly all of the state’s major newspapers have expressed their support for the Michigan Turnaround Plan.
In an effort to continue this momentum and build support for the Michigan Turnaround Plan (MTP), we’ve created an MTP Action Kit. The Action Kit identifies a number of simple ways individuals and groups can express their support for the Plan.
Also, an updated version of the MTP is now available. Dubbed “MTP 1.5,” the Plan includes updated data and action steps that communities & business leaders can take on their own to advance the objectives.
You can download a copy of the MTP Action Kit or updated MTP by visiting www.MichiganTurnaroundPlan.com.
Almost every state in the country will face a budget deficit next year and more than half will face budget shortfalls in the double digits. An article in the current issue of Time Magazine (Inside the Dire Financial State of States, June 28, 2010) discusses how states across the country are facing staggering budget deficits for the third straight year. The billions of dollars of federal stimulus money will end this year and, so far, Congress has been unwilling to support a $50 billion emergency aid bill. Therefore, states across the country, including Michigan, will have no other choice but to address their budget deficits head on and address several difficult issues including education, Medicaid, public employee pay and benefits, and corrections funding. Another major issue is the long-term pension fund obligations that are not fully funded. The Pew Center on the States estimates that state pension plans as a whole are at least $1 Trillion short.
Michigan’s budget deficit will continue to grow if we don’t adopt a long-term, comprehensive budget solution that includes tax, budget, and fiscal reforms. If Michigan wants to be a competitive place to do business and retain, grow and create jobs, we must tackle these difficult issues sooner rather than later.
Interesting Facts from the Article:
· The estimated collective gap between states’ income and obligation next year is $55 Billion.
· The expected growth in the number of Medicaid recipients on average next year is 5.4%. Anticipated funding is expected to hardly grow at all.
· 31 states are projecting a 2011 shortfall of 10% or more as a percentage of this year’s budget.
· According to the Pew Center, half the states ran fully funded pension plans in 2000, but by 2008, that number had dwindled to four.
We’re all frustrated by the limited progress being made fixing Michigan’s economy. But the answer isn’t to give up or feel the problem is too big for you to impact. The answer is to get engaged!
-Get every civic, business or community group you are part of to spend time talking about the Michigan Turnaround Plan.
-Get those groups to express their formal support for the Plan – it doesn’t mean you have to agree with every recommendation, just most of it.
-Ask candidates running for office very specific questions about what they will do if they are elected.
-Ask candidates how they will work across party lines and seek reasoned compromise to get things done.
-Give financial support only to those candidates that are aligned with your views.
-Write or call your elected leaders. Praise them when they cast difficult votes. Tell them when you disagree.
-Talk to your employees, friends and co-workers about the Turnaround Plan and ask them to get engaged.
As citizens of this great country and state, we have a responsibility to spend some time engaging in the governance of our democracies. Most of us haven’t allocated enough time to do this in recent years. But that has to change if we are going to leave a better country and state for the next generation. It’s time to engage!
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