WSW: Does the Michigan Dream Require a Tax Increase?

Jul 24, 2014

Michigan flag - file photo
Credit IStock/Katherine Welles

A new interactive report calls for a greater investment in Michigan's infrastructure, education arts and environment. 

The report called The Michigan Dream at Risk was produced by the Michigan Economic Center. CEO John Austin is also the President of the Michigan Board of Education. He told WMUK's Gordon Evans that the report was inspired by one the Michigan Economic Development Corporation's Pure Michigan videos. 

He says this one included video of children jumping into one of the state's lakes, promoted the University of Michigan, and showed cars traveling on roads. But Austin says he thought of the increase  in beach closings in the state, the rising cost of college tuition at state universities and the poor condition of the state's roads. 

Austin says the report was produced after a series of focus groups and surveys. He says they asked people what is important to Michigan. Austin says there was broad consensus on the most important attributes of the state. He says that includes a beautiful outdoors, especially the Great Lakes, strong institutions of education, industry and innovation , and great communities that are great places to raise a family.  

"Everybody agrees that we've got to spend some money to fix the roads. Our leaders cannot find the political spine to do it, to pull the trigger."

Respondents also found that those assets have been degraded and diminished, according to Austin. He says the response of citizens is more important than any facts and figures. Asked if high quality roads, fully-funded universities and more investment in the environment will mean higher taxes, Austin says "yes." But he says the state has cut corporate business taxes and the income tax over the last 12 years. Austin says that has taken $8-billion away that could be used for fixing roads and holding down the rate of tuition at state universities. "Everybody agrees that we've got to spend some money to fix the roads. Our leaders cannot find the political spine to do it, to pull the trigger." But he says citizens are willing to pay more for better roads and better schools. 

Austin says he hopes the report will get people to put pressure on lawmakers to change priorities. Austin says the state's political landscape has been dominated by what he calls a "theology" that says that reducing taxes will automatically grow the economy. But Austin says investing in education and other services is important for economic development. He says the Kalamazoo Promise is an example of how investing in public education can boost a city. Austin says even though the scholarship program is privately funded, it shows than an investment in education can make a city an attractive place to live and do business. 

In the web version of the interview, Austin says that other states in the Midwest have gone to voters and asked them to raise taxes in order to invest in roads, education, and innovation. He says that has helped states like Ohio and Minnesota grow their economy. 

Dedicated revenue for specific services may be the way of the future, according to Austin. He says people want to get something back for investment in things like higher education. Austin says Michigan's tax system could be reformed to cut taxes for many citizens, while raising more money overall. He says that includes a graduated income tax, and a lower sales tax that also includes services.