Howes: Investment worries on roads, infrastructure, education plague business leaders
Mackinac Island — The hottest word inside the Grand Hotel isn't transit or infrastructure or education. It's investment, and the state's general inability to muster enough of it to keep from being left behind.
For all the progress Michigan has made since the end of the Great Recession — in 540,000 private-sector jobs created, in financial restructuring, in downtown Detroit redevelopment — a brutal fact echoing through the Detroit Regional Chamber's Mackinac Policy Conference this week is that the state is doing a comparatively poor job investing in its future.
Funding for K-12 education is up 12.5 percent over the past decade, essentially tracking overall state spending, but results continue to decline compared with other states. Water infrastructure in a state bordering 20 percent of the world's fresh water is aging and in need of replacement. Roads in the state that put the world on wheels are a costly embarrassment that only will grow worse over time.
"We under-invested in infrastructure not only in Michigan, but across the nation, for decades," Gov. Rick Snyder said Thursday in his eighth and final address to the annual business conference. "We need to invest more. We have to be vigilant. It's not just how much you invest, it's investing smarter."
Blame partisanship and term limits, amplified by social media and parochial concerns. Blame geographic rivalry, where a bloc of largely Democratic lawmakers from southeast Michigan are outnumbered by the mostly out-state Republicans who control the Legislature. Blame too many voters who expect Lansing to do more with less, and then blame lawmakers when results aren't delivered overnight.
And all that's an impediment to attracting economy-changing capital from outside investors (think the failed Amazon.com Inc. bid), to preparing students for the real world (think tanking educational achievement), to competing and winning against rival states generally less polarized along an increasingly uncivil partisan divide.
"If we can't invest in ourselves, why should people invest in us," asked Doug Rothwell, CEO of Business Leaders for Michigan. Exactly right, that, and devastatingly accurate in a state arguably lulled into a collective false sense of security by the manufacturing-driven economic lift of the past eight years.
"You can't get complacent," he added. "The playing field changes year to year. We can't feel good being in the middle of the pack."
This cannot continue, unless the state's highest aspiration is to compete for dead last among states. It's no different than your house: if your neighbors replace their aging roof, repaint the siding, renovate the kitchen and a bathroom while you do nothing, is it any surprise their house turns out to be more valuable than yours?
It shouldn't be, at least not to the adults in the room whose over-riding question isn't always, "What's in it for me?" In a recent poll of 967 AAA Michigan members, nearly 90 percent of the respondents rated the state's roads "fair" or "poor," but 62 percent said they weren't willing to pay more in fees or taxes to make the necessary repairs.
Then who would?
"There's a big disconnect between our legislators and our citizens, particularly on infrastructure," said John Walsh, state budget director and a Republican former state lawmaker from Livonia. "We can't get our elected officers to the point where they will assess a fee or a tax."
Government is no different — provided it's expected to deliver basic services.
"This state has been woefully under-funded on infrastructure" ... especially "roads, drinking water, storm-water and schools," said Suzanne Shank, CEO of Siebert Cisneros Shank & Co. LLC, an investment banking and financial services firm. "We really need to focus on investment — and aggressive investment to attract the right people and jobs. Leadership is the key."
Term-limited Snyder will be replaced on Jan. 1. By whom, and by what kind of policies on investment in infrastructure and economic development, remains to be seen. But this much is certain: Perpetuating a prevailing political culture that obliges a new administration to reject the practices of its predecessor is neither helpful nor reassuring to business.
"Inconsistency and undependability ... that's something that Michigan has unfortunately been known for," said Birgit Klohs, CEO of The Right Place Inc., the economic development arm for the Grand Rapids region. "If we keep changing this, it's going to be harder. It's not good."
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.