Reports Archives - Michigan Future Inc. https://michiganfuture.org/category/reports/ A Catalyst for Prosperity Wed, 24 Jan 2024 15:35:46 +0000 en-US hourly 1 https://michiganfuture.org/wp-content/uploads/2024/01/cropped-MFI-Globe-32x32.png Reports Archives - Michigan Future Inc. https://michiganfuture.org/category/reports/ 32 32 Two decades later, report finds that knowledge workers, not factory jobs, remain key to prosperity https://michiganfuture.org/2024/01/two-decades-later-report-finds-that-knowledge-workersnot-factory-jobs-remain-key-to-prosperity/ https://michiganfuture.org/2024/01/two-decades-later-report-finds-that-knowledge-workersnot-factory-jobs-remain-key-to-prosperity/#comments Mon, 22 Jan 2024 15:11:02 +0000 https://michiganfuture.org/?p=15772 Twenty years after the first edition of Michigan Future, Inc. and the University of Michigan’s report titled A New Path to Prosperity? Manufacturing and Knowledge-Based Industries As Drivers of Economic Growth was released, the two organizations are releasing a second edition which contains a startling finding: Michigan’s economic standing has plummeted with Michigan now ranking […]

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Twenty years after the first edition of Michigan Future, Inc. and the University of Michigan’s report titled A New Path to Prosperity? Manufacturing and Knowledge-Based Industries As Drivers of Economic Growth was released, the two organizations are releasing a second edition which contains a startling finding: Michigan’s economic standing has plummeted with Michigan now ranking 39th in personal income per capita among the 50 states.

“With Michigan’s new focus on becoming a more prosperous state, one that attracts and retains young talent, we looked to the report we issued in 2004 to see how our analysis held up over time, which we found it did – and with severe implications,” said Lou Glazer, president of Michigan Future, Inc. “Michigan needs to change how it approaches economic development if it wants to be a  prosperous state again.”

The 2004 report outlined a paradigm-altering analysis of what mattered most for state and regional prosperity. The report found that manufacturing –– although still an important and valuable component of the Michigan labor market –– was no longer a driver of growth or prosperity. The path to prosperity had become the knowledge economy. Michigan needed to concentrate more on knowledge-based industries and to do that it needed to attract and retain more young, college-educated adults.

Unfortunately, 20 years later, that shift has not occurred. Instead, if each state’s personal income per capita grew over the next 23 years at the same rate that it did between 1999 and 2022, Michigan would end up as the 48th poorest state in the country by 2045, just above Alabama and Mississippi.

“When we first compiled the data in 2004, we feared that without a recognition of the new drivers of prosperity, we risked falling behind,” said Donald Grimes, an economist at the Research Seminar in Quantitative Economics, part of the Department of Economics in the College of Literature, Science, and the Arts at the University of Michigan. “Nothing really changed and Michigan is now one of the nation’s poorest states.”

Michigan’s per capita income in 2022 was 13 percent below the national average, the lowest Michigan has been compared to the nation since the data was first compiled in 1929. This is the opposite of where Michigan was in the 20th Century when the state was structurally a relatively high prosperity state. In 1999, Michigan ranked 16th in per capita income, slightly below the national average.

The report, both the first and second editions, compares low-education attainment manufacturing as an engine of economic growth with high-paying, knowledge-based industries, such as information, financial activities, professional and technical services, and management of companies.

The researchers say that knowledge-based industries and young professionals will be the most important drivers of future economic growth and communities with high concentrations of both are quite likely to be most prosperous.

“I said this when the report was issued in 2004 and I’ll say it again: the best use of policymakers’ time and attention with respect to the economy would come from developing a new agenda on how best to grow a knowledge-based economy in Michigan,” Glazer added. “If Michigan doesn’t become competitive in the knowledge economy, it will be one of the poorest states. Michigan policymakers must change their approach to the knowledge economy if they want to turn our economic decline around.”

To view the updated second edition of ‘A New Path to Prosperity? Manufacturing and Knowledge-Based Industries As Drivers of Economic Growth’, click here. For more information about Michigan Future, Inc., visit www.michiganfuture.org.

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A New Economic Development Strategy for Michigan: put people and place first to create good-paying jobs https://michiganfuture.org/2021/02/a-new-economic-development-strategy-for-michigan-put-people-and-place-first-to-create-good-paying-jobs/ https://michiganfuture.org/2021/02/a-new-economic-development-strategy-for-michigan-put-people-and-place-first-to-create-good-paying-jobs/#respond Thu, 25 Feb 2021 14:06:37 +0000 https://michiganfuture.org/?p=13549 The evidence is clear that it’s time to stop a failed economic development strategy that invests state resources in businesses, and reorient towards investments in talent. In this commentary, first published by Bridge and co-written with Ned Staebler of Wayne State’s Office of Economic Development and TechTown, we argue that economic developers in Michigan are looking at their […]

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The evidence is clear that it’s time to stop a failed economic development strategy that invests state resources in businesses, and reorient towards investments in talent.

In this commentary, first published by Bridge and co-written with Ned Staebler of Wayne State’s Office of Economic Development and TechTown, we argue that economic developers in Michigan are looking at their task all wrong. For Michigan to be successful, we must flip traditional efforts on their head and adopt a bottom-up approach. Talent doesn’t follow companies, it’s the other way around. That means it’s time to invest in human capital – our people..

Click here to read the report.

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A Tale of Two States: Guest Blogger Rick Haglund’s Final Post https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-six/ https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-six/#respond Thu, 31 Jul 2014 13:06:24 +0000 https://www.michiganfuture.org/?p=5941 Many states have cut benefits to the poor and unemployed in the belief that these payments dissuade people from looking for paid work. Minnesota takes a different view. It has created one of the strongest safety nets in the country, spending generously on benefits to help those who have lost jobs or been stricken by […]

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Many states have cut benefits to the poor and unemployed in the belief that these payments dissuade people from looking for paid work.

Minnesota takes a different view. It has created one of the strongest safety nets in the country, spending generously on benefits to help those who have lost jobs or been stricken by poverty get back on their feet.

That protective net has not trapped Minnesotans and turned them into a bunch of government-dependent slackers. Far from it.

Minnesota’s employment-to-population ratio of 67.2 percent in April was the fourth highest in the country, according to the latest data of the Brookings Institution’s Hamilton Project.

In Michigan, which has trimmed welfare and unemployment benefits, 56 percent of the adult population was working in April. Michigan ranked 41st in that measure.

Minnesota’s jobless rate of 4.5 percent in June was the 10th lowest in the country, according to the Bureau of Labor Statistics. Michigan ranked 47th with an unemployment rate of 7.5 percent.

In 2013, Minnesota spent $6.4 billion, or $1,134 per person, in state resources on health and human services. Michigan spent $6.1 billion, or $617 per capita on these services.

Minnesota spent $8,680 per person on public welfare for those below 200 percent of the federal poverty line, more than any other state except Alaska, according to a March 2013 study by the Center of the American Experiment, a conservative think tank in Minneapolis. Michigan spent just under $4,000 per person.

Lifetime cash assistance benefits are limited to 60 months in Minnesota, in line with federal law. Michigan trimmed its lifetime limit to 48 months in 2011.

But just 11.4 percent of Minnesotans were living in poverty in 2012, according to the Census Bureau. In Michigan, 17.4 percent of residents were living below their respective poverty levels.  The U.S. poverty rate was 15.9 percent in 2012.

Michigan and Minnesota have recently enacted higher minimum wages, but Michigan lawmakers did so mainly to head off a ballot proposal that would have boosted the state minimum wage to $10.10 an hour from $7.40 an hour.

Minnesota’s minimum wage will rise to $8.00 an hour on August 1. It will jump to $9.00 an hour on August 1, 2015 and $9.50 an hour on August1 1, 2016. It will be indexed to inflation starting in January 1, 2018.

The state has a lower minimum wage rate for small businesses with annual sales revenues of less than $625,000. That rate will for those employers will be $7.75 an hour on August 1, 2016.

Minnesota does not allow employers to take a tip credit. Employees must be paid at least the applicable minimum wage plus any tips received.

Michigan’s minimum wage is scheduled to rise to $8.15 an hour on September 1. It will rise in steps to $9.25 an hour on January 1, 2018 and will be indexed to inflation on January 1, 2019. The minimum wage for workers receiving tips will be 38 percent of the new minimum wage.

Minnesota also provides more generous jobless benefits than those offered in Michigan.

Jobless workers in Minnesota are entitled to a maximum state benefit of $610 a week for 26 weeks, nearly 70 percent above Michigan’s maximum weekly payment of $362.

In 2011, Michigan cut the time jobless workers can collect state benefits from 26 to 20 weeks in 2011, the fewest of any state at the time.

Since then, seven other states have cut the number of weeks jobless workers can collect unemployment benefits.

A new study by the Economic Policy Institute found that there has been no “visible improvement state labor market outcomes (specifically, the employment-to-population ratio of workers age 25 to 54)” in states that cut benefits.

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Read #StatePoliciesMatter, Michigan Future’s latest report, here.

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A Tale of Two States: Welcome Everyone https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-five/ https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-five/#respond Mon, 28 Jul 2014 15:52:08 +0000 https://www.michiganfuture.org/?p=5932 Many states have “welcome” signs at their borders. Minnesota means it. It’s a state that embraces immigrants, sees same-sex marriage as a civil right and an economic benefit, and recently enacted groundbreaking legislation designed to improve conditions for women in the workplace. Contrast those policies with Michigan, which is fighting to prevent the legalization of […]

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Many states have “welcome” signs at their borders. Minnesota means it.

It’s a state that embraces immigrants, sees same-sex marriage as a civil right and an economic benefit, and recently enacted groundbreaking legislation designed to improve conditions for women in the workplace.

Contrast those policies with Michigan, which is fighting to prevent the legalization of gay marriage, has a legislature that is viewed by many as hostile to women’s reproductive rights and has not enthusiastically embraced Gov. Rick Snyder’s call for attracting more educated immigrants.

Dane Smith, president of the progressive think tank Growth & Justice in St. Paul, attributes Minnesota’s welcoming attitude in part to its Scandinavian heritage, one that prizes tolerance and inclusion.

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“Minnesotans have been subjected to but never bought completely into the conservative nostrum that welcoming polices and generous economic security benefits would invite a flood of shiftless or lazy people to our state,” he said.

“Rather, we have tended to believe that welcoming policies will actually make us more productive and profitable in the long run,” Smith said.

In 2013, Minnesota became the 13th state to legalize same-sex marriage. Then-Minneapolis Mayor R.T. Rybak didn’t just put out a news release praising the move. He kept city hall open all night when the law took effect on midnight August 1 and performed 46 same-sex marriages throughout the night.

Rybak then traveled to several states where same-sex marriage was illegal to recruit gay couples to marry in Minneapolis, citing an economic opportunity for his state in hosting such weddings.

On his gay-marriage promotion tour, Rybak repeatedly cited a University California Los Angeles study that found Illinois could generate $103 million in new spending annually and $8.5 million in additional taxes by recognizing same-sex marriage. It took legal effect there in June.

Minnesota has welcomed tens of thousands of Somali refugees, the first of whom were brought there by Lutheran Social Services and other welfare agencies when civil war broke out in Somalia 1991.

Today, there are about 30,000 Somalis living in Minnesota, about 40 percent of all Somalis living in the United States. And the state is home to more than 60,000 Hmongs, an ethnic minority in Southeast Asia.

Experts say the Somalis and Hmongs are benefiting from a variety of social and educational services in Minnesota that help them thrive.

Among Minnesota’s welcoming policies is “Dream Act,” which makes undocumented students eligible for state grants, in-state college tuition and private scholarships. Students must attend a Minnesota high school for three years and either graduate or earn a GED to be eligible for the aid.

Michigan does not have a similar law, but several universities, including the University of Michigan and Wayne State University have “Dream Act” policies.

While many states have enacted laws tightening requirements to vote, Minnesota makes it easier for its residents to vote than in most states.

Citizens must reside in the state for only 20 days in order to vote in an election. They also can register to vote on the day of an election by showing a driver’s license or state identification card.

And starting August 12, Minnesotans will be able to obtain an absentee ballot without citing a reason.

On Mother’s Day this year, Minnesota Gov. Mark Dayton signed into law a package of bills that, among other things, requires state contractors to pay men and women equally for similar work, expands unpaid parental leave from six to 12 weeks and requires employers to provide areas for nursing mothers to breastfeed.

“The Women’s Economic Security Act aims to break down barriers to economic progress so that women—and all Minnesotans–have a fair opportunity to succeed,” said Minnesota House Speaker Paul Thissen.

10487176_10152118712941176_8889199760681722676_nRead #StatePoliciesMatter, Michigan Future’s latest report, here.

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A Tale of Two States: The Road To Prosperity https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-four/ Thu, 24 Jul 2014 13:52:56 +0000 https://www.michiganfuture.org/?p=5928 Michigan residents are clamoring for the Legislature to better fund the state’s crumbling roads, bridges and mass transit. But lawmakers have repeatedly failed to boost taxes that would raise the $1.2 billion more a year that Gov. Rick Snyder has said is necessary to fix the roads. Minnesota years ago developed a comprehensive transportation funding […]

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Michigan residents are clamoring for the Legislature to better fund the state’s crumbling roads, bridges and mass transit.

But lawmakers have repeatedly failed to boost taxes that would raise the $1.2 billion more a year that Gov. Rick Snyder has said is necessary to fix the roads.

Minnesota years ago developed a comprehensive transportation funding system that has resulted in the state having some of the highest-quality roads and bridges in the country.

It also spends heavily on statewide public transit and on light rail lines in the Twin Cities. Effective mass transit in urban areas is a key element in retaining and attracting young college graduates who are gravitating to cities.

In fiscal year 2013, Minnesota spent $502 per capita on transportation from state taxes, more than double the $223 per capita Michigan spent that year. Overall, Michigan spent $2.2 billion from state taxes on transportation, compared to Minnesota’s spending of $2.7 billion.

A new White House report on the condition of roads and bridges in the states found that those in Minnesota are in the best shape of any Great Lakes state. Michigan’s roads and bridges are in the worst condition.

The report, which drew on data from transportation industry groups and various government agencies, found that just 11 percent of Minnesota’s roads were in poor condition, compared to 22 percent of Michigan roads considered to be in bad shape.

Just 12 percent of Minnesota’s bridges are deficit or obsolete, according to the White House report. Twenty-seven percent of Michigan’s bridges need repair or replacing, the highest percentage in the Great Lakes region.

Bad roads and bridges are hitting the pocketbooks Michigan motorists hard in the form of costly repairs. They pay an annual average of $538.96 in bad-road-related repairs, the highest among motorists in the Great Lakes States.

What about Minnesota? You guessed it. Motorists there pay an average of $369.25 in repairing damage caused by poor roads, the lowest in the Great Lakes region, according to the White House report.

The state funds its portion of the transportation budget through three major taxes; a gasoline tax, a vehicle registration tax and a sales tax on car and truck purchases.

Minnesota’s taxes gasoline at 28.6 cents a gallon, 9.6 cents a gallon more than Michigan’s 19 cents a gallon. Minnesota last raised its gas tax by 8.6 cents, including a 3.5 cent-a-gallon surcharge in 2008.

The state assesses a 6.5 percent sales tax on the purchase of cars and trucks. Forty percent of the revenue from that tax is allocated to funding public transit.

Michigan last boosted its gas tax in 1997 from 15 cents a gallon. The state also relies on vehicle registration fees to support its portion of transportation funding.

Michigan assesses its 6 percent sales tax on gasoline purchases, but the money goes to fund schools and general government operations.

Minnesota also is far ahead of Michigan in establishing urban light rail systems. Several lines operate in the Twin Cities, including the Green Line, which started service in June, connecting Minneapolis, St. Paul and the University of Minnesota.

Michigan’s only urban light rail is Detroit People Mover, a 2.9-mile-long elevated line that circles downtown.

But construction started this month on the 3.3-mile-long M-1 streetcar line along Woodward Avenue in midtown Detroit that backers hope will spark housing and retail development.

newreportRead the latest report from Michigan Future here.

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A Tale of Two States: Education & More from #StatePoliciesMatter Author, Rick Haglund https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-three/ https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-three/#respond Mon, 21 Jul 2014 15:54:46 +0000 https://michiganfuture.org/?p=5896 Art Rolnick, the former director of research at the Minneapolis Federal Reserve Bank and an expert on economic development, says the secret to Minnesota’s decades of prosperity is found in its commitment to developing human capital. “The key to the success of Minnesota’s economy over the past 50 years is the quality of its work […]

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Art Rolnick, the former director of research at the Minneapolis Federal Reserve Bank and an expert on economic development, says the secret to Minnesota’s decades of prosperity is found in its commitment to developing human capital.

“The key to the success of Minnesota’s economy over the past 50 years is the quality of its work force,” said Rolnick, co-director of the Human Capital Research Collaborative at the University of Minnesota’s Humphrey School of Public Affairs.

Minnesota has long been a leader in support for education, from preschool through higher education. The results of that commitment are impressive.

Last year’s graduating seniors in Minnesota posted an average composite score of 23.0 on the ACT test, the highest in the nation among the 28 states in which more than half the college-bound students took the test in 2013.

Minnesota has led the nation in average composite ACT scores for eight consecutive years. Thirty-nine percent of Minnesota high school students were deemed college-ready in all four subjects in the ACT last year, among the best in the country.

In Michigan, 21 percent of 2013 high school graduates were considered college ready. All of the state’s graduates were required to take the ACT, while about 74 percent of Minnesota’s graduates took the test.

The state’s investment in higher education—and its ability to retain and attract college graduates—has resulted in the state having one of the most highly educated work forces in the country, a clear advantage in growing a knowledge-based economy.

In 2012, 33.2 percent of Minnesotans had a bachelor’s degree or above, the 10th highest in the nation. Michigan ranked 36th with 26 percent of its residents having a bachelor’s degree or above.

Minnesota is a pioneer in recognizing the value of early childhood education for its youngest residents. A 2006 business-led pilot program in St. Paul led to the creation in 2011 of an organization called Parent Aware for School Readiness, which promotes a preschool rating system overseen by the Minnesota Department of Education.

Scholarships are awarded for students to attend only four-star-rated programs run by the private sector and public schools systems.

In the 2013 fiscal year Minnesota spent $153 million from state resources on preschool and childcare assistance and added $30 million more in the 2014 fiscal year.

Michigan also has committed more money to early childhood education. It boosted state funding by $65 million for the current fiscal year, more than any other state.

Minnesota spent $28 per capita on early childhood programming in the 2013 fiscal year, while Michigan spent $27 per capita.

Minnesota also outspent Michigan in K-12 funding by $620 per capita from state and local resources in 2013. Minnesota spent $2,067 per capita while Michigan spent $1,447 per capita on K-12 education.

Michigan’s spending of $14.6 billion in 2013 included $3.4 billion from local funding while Minnesota’s $11.1 billion included $2.3 billion from local property taxes.

Minnesota, a state with about 55 percent of the population of Michigan, spent about 75 percent as much as Michigan did on universities and community colleges in the 2013 fiscal year.

Michigan spent about $1.7 billion on higher education and community colleges, while Minnesota spent about $1.3 billion, mostly for the University of Minnesota and the 31 community colleges and state universities in the Minnesota State Colleges and Universities system.

That works out to $243 per capita in Minnesota compared to $172 per capita in higher education spending in Michigan.

Minnesota budgeted an additional $127.1 million for higher education in the 2014 and 2015 years in exchange for a tuition freeze in those years by its colleges and universities.

After years of cutting, Michigan also is boosting funding for higher education. The state’s 15 universities will share nearly $80 million in additional funding in the 2015 fiscal year. But they are required to limit tuition increases to 3.2 percent and meet certain performance goals to receive full funding.

“The increase will help universities make access to higher education available to more students, and give them the resources to continue serving as an important engine of entrepreneurship and research that is vital to growing an economy in the 21st century,” said Michael Boulus, executive director of the Presidents Council, State Universities of Michigan.

That’s something the Minnesota has long understood.

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A Tale Of Two States: From the Author of Michigan Future’s Latest Report https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-two/ https://michiganfuture.org/2014/07/minnesota-guest-blog-rick-haglund-two/#respond Thu, 17 Jul 2014 12:55:54 +0000 https://michiganfuture.org/?p=5899 Metro Minneapolis-St. Paul has long been one of the nation’s most prosperous metropolitan areas with a rich mix of businesses and one of the best-educated work forces in the country. In 2012, metro Minneapolis had per capita income of $50,260, the 27th highest of all metro areas in the United States, according to the Bureau of […]

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Metro Minneapolis-St. Paul has long been one of the nation’s most prosperous metropolitan areas with a rich mix of businesses and one of the best-educated work forces in the country.

In 2012, metro Minneapolis had per capita income of $50,260, the 27th highest of all metro areas in the United States, according to the Bureau of Economic Analysis.

Metro Detroit ranked 111th with per capita income of $42,261. Metro Grand Rapids had per capita income of $37,264 and ranked 211th.

Metro Minneapolis also had the lowest unemployment rate of any large metro area in the country in May with a jobless rate of 4 percent.

Metro Detroit was tied with Providence, Rhode Island and Riverside, California for having the highest unemployment rate at 8 percent. Metro Grand Rapids’ jobless rate in May was 5.4 percent.

Underpinning the Twin Cities’ prosperity is a decades-long commitment to regionalism, an idea that metro Detroit and many other communities have struggled to accept.

Local governments in metro Minneapolis share a portion of their tax revenues to promote more even economic development and level the tax burden throughout the seven-county region.

And the regional planning agency in the Twin Cities metro area, called the Metropolitan Council, also operates the public transit and wastewater treatment system.

Tax-base sharing in metro Minneapolis is known as the Fiscal Disparities program and was established in 1971. It shifts tens of millions of dollars among 240 local governments and school districts, and dozens of other tax authorities in the metro area.

Under Fiscal Disparities, 40 percent of the growth in the commercial and industry tax base in the metro area goes into a shared pool. Communities with a smaller per capita property value compared to the metro average get a larger distribution, while communities with a larger per capita property value get a smaller distribution.

In 2013, $390 million in tax base, or 37 percent of the commercial and industrial tax base was shared.

Not everyone has been happy with Fiscal Disparities. Some wealthy suburban communities have complained that it takes millions of dollars from their budgets and subsidizes poorer communities that don’t account for how they use the money.

But a 2012 study of the program for the Minnesota Department of Revenue concluded that donor communities weren’t especially harmed by the loss of tax base. The 234-page report did not recommend changes in the program.

Another crucial element in regionalism in metro Minneapolis is the Metropolitan Council, a regional planning agency similar to the Southeast Michigan Council of Governments in Detroit.

The Metropolitan Council was founded in 1976 and is governed by a policy board whose 17 members are appointed by the governor. Unlike SEMCOG, those members cannot be local government officials.

And also unlike SEMCOG, the Metropolitan Council has operational responsibility for the region’s mass transit and wastewater treatment systems. It claims its wastewater treatment rates are 40 percent lower than peer regions.

The Metropolitan Council collects a portion of the state’s motor vehicle sales tax and a metro-wide property tax to fund its operations.

Forty percent of this year’s $887.8 million budget comes from the state and federal government. The rest comes from the property tax, transit fares and wastewater treatment charges.

The Metropolitan Council says it works to foster prosperity in metro Minneapolis by promoting “a healthy environment, clean water, convenient transit options, parks for recreation and exercise, and housing options.”

Its efforts appear to be succeeding.  The Twin Cities, as well as the rest of the state, regularly rank high in national “quality of life” surveys.

Metro Minneapolis ranked fifth highest among the 52 largest metro areas in this year’s Gallup Well-Being study, based on more than 500,000 telephone interviews. Metro Detroit ranked 50th.

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Read the latest report from Michigan Future here.

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Minnesota: a high-tax, high-prosperity state https://michiganfuture.org/2014/07/minnesota-a-high-tax-high-prosperity-state/ Mon, 14 Jul 2014 15:57:03 +0000 https://michiganfuture.org/?p=5901 Many states, including Michigan, have embraced low taxes and small government as their strategy to try to grow their economies. Minnesota has long trod a different path, one that features high taxes and smart investments in areas such as transportation, cities and education. It also has the strongest economy in the Great Lakes region and […]

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Many states, including Michigan, have embraced low taxes and small government as their strategy to try to grow their economies.

Minnesota has long trod a different path, one that features high taxes and smart investments in areas such as transportation, cities and education.

It also has the strongest economy in the Great Lakes region and ranks among the wealthiest states in the country, as Michigan Future has documented in its studies and blog posts.

The state repudiates the notion that high taxes are inherently harmful to economic growth.

The exact opposite is occurring in Minnesota, which like Michigan is a cold-weather state.

Minnesota’s real per capita income in 2012 was $46,227, an eye-popping $8,730 more than Michigan’s per capita income of $37,497. Minnesota ranked 11th in per capita income in 2012, far above Michigan at 35th.

And Minnesota’s job market is much healthier than Michigan’s. Its jobless rate in April was 4.7 percent, while 7.4 percent of Michigan’s residents were unemployed in April.

Perhaps a more important measure is the percentage of adults who are working or available to work. Minnesota had the third-highest labor force participation rate in the country at 70.6 percent in March. Just 60.4 percent of Michigan adults were in the labor force that month, well below the U.S. average of 63.4 percent.

The North Star State has achieved this enviable record with a hefty tax burden that those in the home state of “Prairie Home Companion” host Garrison Keillor sometimes joke about.

“Minnesota residents pay some of the highest taxes in the country and give what’s left over to Minnesota Public Radio,” cracked Dane Smith, president of Growth & Justice, a progressive research and advocacy group in St. Paul.

State taxes alone were $3,880 per capita in Minnesota in 2013, 53 percent above Michigan taxes per capita of $2,535.

Minnesota ranks 6th in state taxes per capita, while Michigan ranks 26th, according to the Federation of Tax Administrators.

At the heart of Minnesota’s tax system is a belief that the wealthy should pay a higher percentage of their income than those on the lower rungs of the income scale.

Minnesota has a progressive personal income tax system in which tax rates range from 5.35 percent to 9.85 percent. The top rate was boosted in 2013 from 7.85 percent, part of a plan to raise an additional $2.1 billion in tax revenues over two years.

In Michigan, everyone pays a flat tax rate of 4.25 percent.

Minnesota businesses also pay much higher taxes than their Michigan counterparts. Minnesota’s corporate income tax rate is 9.8 percent, compared to Michigan’s 6 percent rate.

Both states apply their corporate income taxes to only “C” corporations. But all other Minnesota businesses are subject to a “minimum fee” ranging from $100 to $5,000. That state collected $1.7 billion in business taxes in 2013, compared to $735 million in Michigan business tax revenues.

Minnesota also raises far more money than Michigan does for roads, bridges and public transit.  The state taxes gasoline and diesel fuel at 28.6 cents a gallon, 9.6 cents a gallon more than Michigan’s 19 cent-a-gallon gasoline tax. Michigan taxes diesel fuel at 15 cents a gallon.

Total transportation taxes in Minnesota last year were $391 per capita compared to Michigan’s $232 per capita.

Michigan is engaged in a legislative debate over whether to boost road taxes by more than $1 billion a year to fix its rapidly crumbling roads.

The sales tax in Minnesota also is higher than in Michigan—6.875 percent in Minnesota compared to 6 percent in Michigan.

A variety of local units in Minnesota, including schools and local governments, are permitted to assess a local sales tax. Depending on where they live, Minnesota residents can pay a sales tax rate of as much as 7.875 percent.

As in Michigan, there is a debate in Minnesota over the optimal level of taxation. The business community, in particular, has long complained that high taxes make Minnesota less attractive to new investment.

But Minnesota’s high per capita income and strong job market make it difficult to argue that the state is on the wrong path.

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Read Michigan Future’s latest report here.

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In The News: State Policies Matter https://michiganfuture.org/2014/06/news-state-policies-matter/ https://michiganfuture.org/2014/06/news-state-policies-matter/#respond Thu, 26 Jun 2014 18:44:24 +0000 https://www.michiganfuture.org/?p=5702 What Michigan can learn from Minnesota Detroit News June 27, 2014 It’s an article of faith among many elected officials that low taxes and tight-fisted government spending are essential to healthy state economies.Minnesota has for decades adhered to a different strategy, one that embraces high taxes to fund education, transportation, a strong social safety net […]

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What Michigan can learn from Minnesota
Detroit News
June 27, 2014

It’s an article of faith among many elected officials that low taxes and tight-fisted government spending are essential to healthy state economies.Minnesota has for decades adhered to a different strategy, one that embraces high taxes to fund education, transportation, a strong social safety net and other investments required for citizens to prosper in a knowledge-based economy. >>Read more.

People need to stop using political slogans as a substitute for critical thinking
Michigan Radio
June 24, 2014

I noticed something familiar yesterday after I talked about a new investigative series in the Detroit Free Press on charter schools. What I said drew a fair amount of comment. Virtually none of the comments had to do with anything I said. >>Read more.

Minnesota’s economy is top dog in the Great Lakes region
Michigan Radio
June 23, 2014

As Michigan keeps trying to climb back out of the huge hole that was the Great Recession, a new report suggests we might want to take a closer look at one of our Great Lakes neighbors: Minnesota. A new study done for the nonpartisan think tank Michigan Future examines the policies, priorities and economies of Michigan and Minnesota. >>Read more.

Stephen Henderson: If taxes are evil, why is Minnesota working?
Wausau Daily Herald
June 23, 2014

When you look over into your neighbor’s yard and see greener grass, it’s worth wondering what elixir he’s using to get better results. Right? So lawmakers in Michigan, where the economy has been on a steady but slow rebound for the past four years, ought to be thinking pretty hard about what has gone on in Minnesota, which has grown its economy — and per capita incomes in particular — much quicker. >>Read more.

SELWESKI: Snyder’s ‘comeback state’ slogan wearing thin
Daily Tribune
June 21, 2014

More than a year ago, Gov. Rick Snyder confidently decided upon his 2014 campaign bumper sticker – Michigan is the nation’s “Comeback State.” The governor routinely spouts a list of statistics that boasts of Michigan’s gains since the Great Recession – unemployment down, income up, manufacturing jobs up, home sales up, plant closings down. In fact, the percentages are quite significant. >>Read more.

Could Michigan learn from Minnesota’s high tax success?
WKAR
June 19, 2014

As Michigan works to recover from the economic downturn and the decline in its manufacturing base, there have been plenty of debates over which policies will set Michigan on a long-term path toward more prosperity. With much of the state government controlled by the Republican Party, often the path touted to bring Michigan’s economy back involves lower taxes, a decrease in regulations, and an overall reduction in the role of government. >>Read more.

Stephen Henderson: Think taxes are evil? Well, go ask Minnesota
Detroit Free Press
June 19, 2014

When you look over into your neighbor’s yard and see greener grass, it’s worth wondering what elixir he’s using to get better results. Right? So lawmakers in Michigan, where the economy has been on a steady but slow rebound for the past four years, ought to be thinking pretty hard about what has gone on in Minnesota, which has grown its economy — and per capita incomes in particular — much quicker. >>Read more.

Michigan still looking to recover jobs lost in the Great Recession
Detroit Free Press
June 18, 2014

Two weeks ago, the U.S. government released jobs data showing the nation had finally recovered all the jobs it had lost during the Great Recession five years ago. That’s the good news. Here’s the less good news: No matter how low Michigan’s unemployment rate drops when the state reports jobless numbers today, the total number of jobs in Michigan will remain far short of its pre-recession total. >>Read more.

20 Years Ago, Michigan And Minnesota Were Comparable — How Has Minnesota Pulled Ahead?
CBS Detroit
June 16, 2014

A mix of higher taxes and targeted investment by leaders in Minnesota have helped the state be an economic leader among Great Lakes states, according to a new report titled “State Policies Matter: How Minnesota’s tax spending and social policies help it achieve the best economy among Great Lakes state.” >>Read more.

Why Minnesota outpaces Michigan: Higher taxes?
Bring Me The News
June 16, 2014

Although Minnesota and Michigan are about the same size and in the same region of the nation, Minnesota typically outscores its neighbor to the east on most measurements of business and prosperity. Now a new study suggests why. Think tank Michigan Future Inc. produced a report titled, “State Policies Matter: How Minnesota’s tax, spending and social policies help it achieve the best economy among the Great Lakes states.” >>Read more.

Report: Higher taxes helped Minn. economy outpace Michigan
Crain’s Detroit Business
June 16, 2014

Higher taxes — including those on business — are the key to Minnesota’s economic good fortune in recent years, according to a report issued Monday by Michigan Future Inc. that takes an in-depth look at why our neighbor state has so outpaced Michigan in economic fortune since 1990. >>Read more.

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A Tale of Two States: Shareable Graphics for Michigan Future’s Latest Report https://michiganfuture.org/2014/06/state-policies-matter-infographics/ https://michiganfuture.org/2014/06/state-policies-matter-infographics/#comments Tue, 17 Jun 2014 20:47:48 +0000 https://www.michiganfuture.org/?p=5662 Michigan Future’s latest report looks at Minnesota, the most prosperous state in the region with the lowest unemployment rate, and the public policies that have helped it achieve that status. Below we will release shareable graphics that demonstrate some of the staggering data uncovered in the report. Follow the links below to download the graphics to share on […]

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Michigan Future’s latest report looks at Minnesota, the most prosperous state in the region with the lowest unemployment rate, and the public policies that have helped it achieve that status.

Below we will release shareable graphics that demonstrate some of the staggering data uncovered in the report. Follow the links below to download the graphics to share on your organization’s or personal social media. As you share them, we encourage you to use the hashtag “#StatePoliciesMatter” to help spark conversation around Michigan Future’s latest report.

If you haven’t done so read the full State Policies Matter report here.

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INFOGRAPHIC #1: Right-click on the image and select “Save Image As.” 10487176_10152118712941176_8889199760681722676_n INFOGRAPHIC #2: Right-click on the image and select “Save Image As.” State-Policies-Matter-social-graphic-3

INFOGRAPHIC #3: Right-click on the image and select “Save Image As.”

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