Three Big Ideas For Michigan

While Michigan transitions to improve its business climate, a number of ideas are being thrown around. Most of them revolve around cutting or raising taxes. However, we at metromode believe Michigan's business climate doesn’t necessarily revolve around its tax structure. There is much more to the equation.

Attracting and retaining talent is a major reason Comerica is moving its headquarters and 200 of its top staff to Dallas. The Detroit Free Press quoted Comerica's CEO Ralph Babb saying "there is a question, at times, in people’s minds" about moving to Metro Detroit. Meanwhile, Google is moving its AdWords division to Ann Arbor, creating 1,000 high-paying, new economy jobs.

"The Ann Arbor area has a highly educated workforce, as well as the graduates and resources of the University of Michigan, all of which are attractive to Google as it builds its office and ties with the community," says Grady Burnett, head of online sales and operations for AdWords in Ann Arbor, adding Google goes "where the talent is."

The bottom line is that restructuring taxes isn't a silver bullet, so metromode has come up with three out-of-the-box ideas to help Michigan keep its Comericas and attract more Googles.

Free rides to a higher education

The days when politicians promise a chicken for every pot are long gone, but what if Michigan's leaders promised a college education for every student in the state?

A common refrain is that deep talent pools attract big investments from business. This is apparent in the vibrant economies surrounding the top universities in big metropolitan areas, such as Boston and San Francisco. This has become so obvious that pundits, politicians and business leaders religiously cite higher education as the key to transforming Michigan from a brawn-based economy to a brain-based one.

"Education is the linchpin for Michigan’s future," says John Bebow, executive director of The Center for Michigan, an Ann Arbor-based, think-and-do tank. "It’s that simple."

The state's leaders seem to recognize this, toughening high school graduation standards and calling for the state to double its number of college graduates. But is that enough? What if Michigan went all in by becoming the first state to guarantee a free college education? Could that separate the state from the pack?

Michigan already has a pilot program of sorts for this idea in the Kalamazoo Promise. A wealthy group of benefactors decided in 2005 to guarantee free college tuition to the city residents who graduate from Kalamazoo Public Schools. The immediate effects of this bold move are tantalizing while its long term possibilities are downright exciting.

While thousands of people leave Michigan, people from across the U.S. are moving to Kalamazoo because of the promise. Home sales and property values in the "Promise Land" are up about 10 percent while the state's drop. Nearly 1,000 new students enrolled in the school district this year, bringing millions of dollars into an urban school district that has lost students for decades. Drop-out rates are falling and two new schools are planned in the manufacturing town once known for paper mills and hard times.

"Many people who did not have hope before, who didn't have their sights set on higher education, they do have hope now," says Janice Brown, superintendent of Kalamazoo Public Schools. "That gives us incredible leverage with our kids."

The long-term effects have yet to be determined. No major corporations have announced they are moving their headquarters to Kalamazoo, yet. There is no guarantee these college-bound kids will stick around Kalamazoo or come back after graduation, let alone finish school. But it's hard to ignore the optimism energizing Kalamazoo.

Local leaders see it becoming a major part of the lives of everyone in the community. The type of stimulus that will free up thousands of dollars in family budgets, breed entrepreneurs, attract the attention (and dollars) of big business and make people take a serious second look at Kalamazoo.

"It talks about the priorities of a community," says Steward Sandstrom, president and CEO of the Kalamazoo Regional Chamber of Commerce. "It tells people how much this community values education."

But this could also be the next escalation in an educational arms race that Michigan ignores at its own peril, according to The Center for Michigan's Bebow. A paper he coauthored on the promise notes how Indiana is seriously exploring offering free college tuition. Georgia already pays for a large part of a student's tuition. Wisconsin is looking at a tuition-reimbursement program for college graduates stay in state after school. The paper estimates the annual cost for such programs in Michigan between $400 million to $1.2 billion.

Bebow says Michigan's lawmakers are too wrapped up in solving the latest budget crisis to seriously look at issues like this. Other communities in the state – such as Holland, Flint and Southfield – aren't waiting for Lansing and working to create their own programs. A patchwork system for providing free college tuition might not be ideal, but Bebow says "it's better than nothing." In the mean time, Kalamazoo is positioning itself to become a major, if not key, economic player in the state.

"When you look at Kalamazoo in 10 more years, we will be at the forefront in Michigan in terms of economic vitality," says Bob Jorth, executive administrator for the Kalamazoo Promise.

One percent for art

Retaining and attracting the creative class has become a small obsession in Michigan. The idea is behind a renewed focus on reinvigorating the state's cities to attract the creative people that make a place cool in hopes that economic vitality will follow.

The "Percent for Art" concept falls right in line with that line of thinking. The idea is that a small percentage, usually 1 percent, of the construction budget for a new building be dedicated to the creation of public art, such as sculptures or murals. Dozens of major cities and states have moved forward with these types of plans.

New York City began a percent for art program 1983, prompting more than 210 projects completed with public art and another 45 new projects in progress. Other major, vibrant cities such as Seattle and Portland have followed suit, along with states like Minnesota and Maine. Ann Arbor will debate a percent for art ordinance later this spring, calling for dedication of 1 percent of city construction budgets to public art.

"Public art expresses the soul of a community," says Margaret Parker, chair of the Ann Arbor Commission on Art in Public Places. "It should express what people think is fun and beautiful. It should express what they want to see for a longtime."

Parker has been a major advocate for the idea in Ann Arbor, arguing it is a small investment that can provide huge benefits, such as attracting tourism and improving the city's image.

"It helps label Ann Arbor as a place that is vibrant and interesting for the arts and therefore a vibrant and interesting place to work," says Russ Collins, a DDA board member and executive director of the Michigan Theater.

Even though Ann Arbor is already known for such things it still has a lot of room to improve that image, while the state has even further to go to provide an inhabitable environment for artists.

"Percentage for art programs give artists a better chance at creating a career in Michigan," Parker says. "That means we keep our creative class in Michigan. Why export our artists? Why not keep them here?"

Green points

The Clean Energy Coalition is offering to make $10,000 in energy-efficiency improvements this spring to a home in Michigan. The Ypsilanti-based non-profit dedicated to promoting clean energy technologies isn't just trying to show how much state residents can cut down their energy bills. It also hopes to show just how energy-inefficient so many homes are in Michigan.

"We have some of the worst energy codes in Michigan," says Jacob Corvidae, green programs manager with the Detroit-based WARM Training Center, which promotes energy efficient homes. "We're in the last five states when it comes to energy codes."

Standard new homes in the state use about twice as much energy as houses rated Energy Stars by WARM. That means Energy Star homes save about $1,500 a year in energy costs. When it comes to energy efficiency state regulations lag behind most of the country's. Energy Star homes use 30 percent less energy compared to standard construction for the nation, compared to 52 percent less in Michigan.

Corvidae points out that although consumers usually want energy efficient homes, affordable housing usually goes without them because home builders do the minimum of what codes call for to save costs. And Michigan's codes are written for conditions from at least 15 years ago while a vast majority of the other states have brought their codes up to present day realities.

"Well when the codes are really low affordable housing isn't as affordable because the operating costs are so much higher," Corvidae says.

He adds that green building also has a wide range of benefits beyond saving money on energy. For instance, natural lights from skylights help improve sales at retail businesses, testing scores in schools and make homeowners happier, Corvidae says.

"There is a ton of work that can be done in the existing home market," says Sean Reed, executive director of the Clean Energy Coalition. "I think it would be a great way to go. I'd like to see the state apply more of its resources toward that end."

Perhaps Michigan communities can learn from Boulder, Colorado's Green Points Program. Adopted in 1996, the college town requires applicants to earn "points" by selecting green building measures in order to receive a permit. The contractor or homeowner has a variety of sustainable methods and technologies to choose from based on the size of their proposed structure. The ultimate goal is to encourage cost-effective practices that conserve energy, water and other natural resources.

In April, the city took its green policies even further by enacting a carbon tax on local residents and businesses. Officials say their goal is to reduce local carbon emissions by 350,000 metric tons by 2012. Part of Boulder's "climate action plan," the city of 101,000 intends to combat global warming by meeting goals set by the Kyoto Protocol. They are the first U.S. municipal government to impose an energy tax on its citizens.

While it's unlikely you'll find a Michigan community willing to make that level of commitment, many of the state's leaders believe upping our laws to become a leader in energy efficiency and other green technologies can lead to a boom in the economy.

"Strategically and regionally we are in a place to become a leader in green technology," says state Sen. Jim Barcia, D-Bay City, who is sponsoring legislation to that would help make Michigan competitive in developing green technology.

The state's Public Service Commission's 21st Century Energy Plan calls for renewable resources to provide 10 percent of the state's energy by 2015. And it's trying to raise home energy-efficiency standards, although that effort has stalled. However, there are calls to create a new coal-burning or nuclear plant to satisfy the state's near-future energy needs.

Environment Michigan doesn't think those new plants are necessary. The Ann Arbor-based environmental-advocacy organization says the state can satisfy those future electricity needs through energy efficiency and development of green technologies. Such an initiative could create jobs and help make Michigan more energy independent, keeping billions of dollars inside the state.

"Now is the time to move Michigan toward a clean energy future," Environment Michigan's states in its Energizing Michigan's Economy position paper. "Michigan has a once in a-generation chance to change course— from old and dirty fossil fuel-based energy to a more efficient economy powered by renewable energy."