Enough is Enough: Business Tax Cuts Fail to Grow Michigan’s Economy, Hurt Budget

| Executive Summary

Cutting business taxes has not been an effective way to grow jobs and the Michigan economy as promised. This is particularly true when combined with increased taxes on individuals, disproportionately affecting low- and middle-income people and families. In 2011, the Legislature and governor gave businesses a generous $1.6 billion tax cut by repealing a business tax paid by all types of businesses and levied on gross receipts and income, and replacing it with a flat 6% income tax on C Corporations. At the same time, the state raised taxes on individuals by about $1.4 billion. Instead of business tax cuts, we need investments in education, transportation and infrastructure, local communities and job training to create an economy that works for all in Michigan. The current road funding dispute and other budget dilemmas were caused by these business tax cuts, and Michigan has not reaped any economic rewards from them.

Unique Situation in Michigan—Recovery Not Tied to Business Tax Cuts

With a decade-long downturn that began well before all other states, Michigan lost approximately 850,000 total jobs, saw personal income decline and poverty increase. Since coming out of the Great Recession, all states, including Michigan, have seen their economies improve and job growth return. However, although Michigan has returned to pre-2008 job levels, it has not recovered to its peak, and the evidence does not support that the business tax cuts in 2011 facilitated economic growth. In fact, a leading economist at the University of Michigan maintains that the improvement in the job market can almost entirely be attributed to the effects of a national recovery and the improvement of the auto industry.1 Following the Great Recession, Michigan’s employment rebounded sharply but has grown at about the same rate as national employment since 2012, which is when the business tax cuts took effect. In fact, an argument can be made that the economic recovery—in terms of job creation, employment and personal income growth—would have been faster without cuts to business taxes, which ultimately led to both increased taxes for individuals and steep cuts to public services.

 

Michigan’s recession was unique, and its recovery has been as well. The nation slipped into a short, eight-month recession in early 2001. While most states recovered after this downturn, the Midwest struggled. Four of the six Midwest states—Illinois, Indiana, Michigan and Ohio—actually had private job figures peak during 2000 rather than late 2007 to early 2008 as most of the nation. However, of these states, Michigan was alone in that it never even partially recovered before bottoming out in 2009.

Coming out of the recession, Michigan’s economy has made strides, as has the rest of the nation. However, no state in the Midwest, even Ohio or Indiana which are considered low-tax states, has recovered faster than Minnesota, a high-tax state. Minnesota’s unemployment rate is the lowest of the region, and its private job growth is the highest. Ohio, which gave major tax breaks to businesses just before the onset of the recession,2 has a lower unemployment rate than the national average but has barely seen any private job growth. The only state in the region to have a higher unemployment rate than Michigan is Illinois. While all Midwest states except Illinois have seen net job growth since the Great Recession, Michigan, along with Ohio and Illinois, has seen net job losses since its 2000 peak. In fact, Michigan is more than 7.5% below its private job peak.

Michigan’s job situation began to turn around in mid-2010 with the improvement of the auto industry aided by federal assistance. Michigan actually saw a few private jobs return in 2010, with 3,900 in private job growth. In 2011, before the business tax cuts occurred, 106,600 jobs were added, the most per year of the recovery. In 2012, the first year that business tax cuts went into effect, only 90,500 jobs were added and even fewer new jobs were added in 2013 and 2014 (86,000 and 73,500, respectively). Over the past year, Michigan businesses reported adding 84,600 jobs,3 but total Michigan private employment is still roughly 7.5% below January 2000. Had the business tax cuts truly spurred job creation in the state, we should have seen more jobs being added in 2012 and 2013. Instead, job growth actually slowed following the tax cuts.

Even with employment increases expected, the unemployment rate is projected to drop mostly due to a shrinking workforce. Michigan’s workforce participation rate, which measures the percentage of working-aged persons who are employed or looking for work, peaked in 2000, and has stagnated around 60-61% since 2011, below the national average. As of July 2015, Michigan ranked 40th in the nation. Also of concern is long-term unemployment, with Michigan’s unemployed workers being out of a job for approximately 37 weeks on average in 2014. And Michigan’s labor underutilization rate was 13.9% in 2014, the 5th highest in the nation. This includes the total unemployed, those who are not looking because they believe there are no jobs, those that want a job but have not looked in four weeks for any reason, such as lack of transportation, and those employed part-time for economic reasons. The evidence does not suggest that implementing cuts for businesses has improved the job market in Michigan.

Michigan’s per capita income, another indicator of economic recovery, while growing, has lagged behind both the U.S. and regional averages. In 2014, Michigan’s per capita income level was $40,740, 11.5% lower than the U.S. average and 5.9% lower than the average for the Great Lakes Region, which includes Michigan, Ohio, Indiana, Illinois and Wisconsin. The gap between Michigan and the national average has been relatively stable since 2007, varying only a little over a percentage point during that time frame. When Minnesota is included in this region, the gap between Michigan and the regional average grows to 7.1%. Michigan’s per capita personal income ranking was 38th in 2010, improved to 36th in 2011, and then slightly worsened to 38th in 2012, after the business tax cuts occurred. But overall, our ranking has been relatively stagnant.4 The last time Michigan ranked better than 30th in per capita personal income was over a decade ago.

Even more startling is wage growth, where Michigan is also failing. Between 2011, the last year of the MBT, and 2012, the first year of the CIT, the average weekly wage of an employee of a private employer grew by just over 2%. This was the slowest growing state in this period in the region. In comparison, Minnesota’s average weekly wage grew by almost 3.5%. The rate of wage growth beginning with the period just prior to the enactment of cuts to business taxes through 2014 shows Michigan is one of the slowest growing states in the Midwest, tied with Indiana.

Increased Demand, Not Increased Profits, Create Jobs

Michigan’s business tax cuts have not produced the promised jobs. Signing the new law in 2011, Gov. Rick Snyder stated, “…the overhaul of our tax structure lets job providers nationwide know that Michigan is the place to be.”5 Theoretically, in the majority of policymakers’ perspectives, cutting taxes would attract new businesses to create jobs in the state and put more money in the hands of current Michigan employers to enable them to hire additional workers. Indeed, many state business climate rankings seem to argue that low tax burdens make the state more attractive to job creators.6

In actuality, businesses do not hire or expand unless there is an increased demand for their goods or services. According to the Congressional Budget Office, a nonpartisan policy agency for Congress, increasing after-tax income of businesses in the form of tax cuts does not create an incentive to hire or produce more, because adding more goods and services depends on their ability to sell them.7 A company will not need additional workers if there is not a need for more of its goods or services. Instead, those extra profits are pocketed.

In the most recent Michigan Future Business Index, a survey of small- to medium-sized business owners in Michigan, the number of respondents hiring more individuals follows more closely along with the number expecting increased sales than with those expecting increased profits. This correlation is even stronger when looking at the years immediately following the enactment of the Corporate Income Tax. Therefore, we can see that anticipated increases in sales do more to drive business hiring practices than profits, which have been helped by recent business tax cuts.

Michigan’s New Job Market

Prior to the recession, manufacturing jobs related to the auto industry were the largest share of Michigan’s job market. And while manufacturing jobs have made a comeback, accounting for over 35% of the total jobs gained since June 2009, Michigan’s economy needs to diversify. Almost every industry in Michigan has seen growth since the bottom of the recession, with significant gains also in professional and business services, education and healthcare services, and leisure and hospitality, with jobs in the first two sectors anticipated to dominate job growth long term. Low-wage, low-skill jobs are still the predominant employment opportunity for Michigan residents, making up 46% of Michigan’s employment by occupation skill level.8 Middle- to high-skill jobs, which provide the opportunity for higher wages,9 generally require postsecondary education or training, and are being threatened by the state’s lack of a skilled workforce.

Low-Wage Jobs Dominated Post-Recession

Low-wage jobs dominate Michigan’s economy. Currently,10 63% of all Michigan jobs pay less than $20 per hour, which is approximately $40,000 annually for a full-time job.11 It is projected that most new jobs will be in the service industry with wages below $15 an hour and will only require a high school diploma or less.12 Additionally, it is estimated that new hire wages were approximately half of what incumbent workers made between 2002 and 2014,13 which makes it even harder for new employees in low- to mid-wage jobs to make enough to meet basic needs.

Over the past 35 years, wages for low- and middle-income workers have dropped significantly. From 1979 to 2013, real hourly wages for low-income workers fell by 13.4% and 12.7% for mid-wage workers.14 When compared to other Midwest states, Michigan’s wages fell the most (12.7%). Minnesota, considered a high-tax state, experienced an increase of 11% and Indiana, a low-tax state, had an almost 1% decrease in real median wages over the same time period.15

Many families are struggling to make ends meet because of low wages. The continued upsurge in these types of jobs will not benefit the state economy. The most recent U.S. Census data show that from 2009 to 2013, the share of households making less than $10,000 a year grew the fastest. Very simply, when wages are low, workers are unable to meet basic needs, let alone save, often leaving them one financial emergency away from slipping into poverty, which harms the economy.

Talent Disconnect Hurts Growth

Higher wage, higher skill jobs, including jobs in the fast-growing high-tech area, are left unfilled in Michigan due to a talent or skills gap. These are the types of jobs that once supported the middle class; however, they require education and training beyond a high school diploma. A recent report determined that the metro Detroit area has jobs for these middle-skilled employees but many go unfilled for weeks or months due to the lack of a skilled workforce, which needs to be changed in order to grow our economy.16

In Michigan, about 1 in 3 people are employed in a middleskill job. An analysis of projections from the Economic Modeling Specialists International shows that demand in Michigan for jobs in the health profession is expected, with nurses, medical secretaries, dental hygienists, paramedics and lab technicians topping the list.17 Generally, these jobs pay between $30,000 and $80,000.18 Although a bachelor’s degree may not be necessary for these positions, additional training and education beyond high school, such as an associate’s degree or certification, are required. A recent study determined that by 2020, 70% of jobs in Michigan will require some postsecondary education, with 37% of these in “middle skills.”19

Jobs in Michigan’s high-tech fields have grown in every year since the end of the recession, at times faster than nationwide. A now rebounding industry, manufacturers are creating high-tech jobs that also require more than a high school diploma. In 2014, automotive manufacturing contributed the most jobs in high-tech employment followed by engineering and other consulting services.20 Wages for high-tech jobs average around $82,180 in Michigan21 and all will require workers to obtain more than a high school diploma—at least a bachelor’s degree in some cases.

Michigan’s workforce, however, is lagging behind other states in educational attainment, creating a drain on economic growth both in terms of business expansion leading to new hires and in companies’ ability to fill current and future openings. Former president and COO of Alro Steel Corp., Mark Alyea, cites the lack of skilled workers as the reason their manufacturing customers are limited in growth and also why the state has been unable to raise per capita income.22

Compared with other states considered to have low business taxes, such as Indiana and Ohio, Michigan has about the same percentage of its population 25 years or older with postsecondary education. However, when compared with Minnesota, a high-tax state with low unemployment and high per capita income, there is a significant difference in educational attainment. In 2013, Minnesota spent about $242 per capita on higher education while Michigan spent only $172 per capita.23 Minnesota’s decision to invest in higher education and retain those graduates has clearly helped grow its skilled workforce, and fill and grow jobs in a knowledge-based economy. It is this workforce investment that helped Minnesota secure the No. 1 slot in a recent state economic climate scorecard.24

There is a talent disconnect in our state resulting from a lack of education attainment: 16% of small- and mid-sized Michigan businesses recently surveyed reported that this is their No. 1 concern, 64% say they have had difficulty filling open positions, and 69% of those hiring say there are not enough qualified applicants.25 For the first time since the start of the survey in 2006, there were more negative responses than positive when asked to rate access to qualified personnel. This has been a significant concern for the past few surveys. In a survey from a year earlier, one business owner responded that “Michigan has systematically underfunded schools, municipalities and infrastructure to the point that young people and talented people are unlikely to make Michigan their first choice to live and locate their families.”26 This lack of skilled talent contributes to the drag on our economic recovery.

Business Tax Cuts Hurt Roads, Schools, Communities and Michiganians

When the governor and Legislature reduced taxes on businesses, it created a significant hole in the state budget. Some of this lost state revenue was replaced by increasing taxes on individuals; however, not all of it was recovered which led to cuts in other programs and services for people. Cutting business taxes through the repeal of the Michigan Business Tax and phase-out of the Personal Property Tax left fewer funds available for Michigan to invest in our people through education, transportation and public safety, stunting economic growth and recovery from the Great Recession.

While businesses benefit from state investments in schools, roads and local services, the share contributed by businesses to support these programs has dropped significantly. Historically, under the Single Business Tax (SBT) business tax revenue as a proportion of General Fund dollars varied from a low of 14% to a high of 26%.27 Likewise, the short-lived Michigan Business Tax (MBT) made up between 15% and 19% of GF/GP funds.28 It is estimated that the new Corporate Income Tax (CIT) will only contribute around 10% to 11% of GF/GP revenues.29 Since Fiscal Year 2010, the amount of net business taxes going to state General Funds has been cut nearly in half. Cutting business taxes may have cushioned profits, but it resulted in disinvestment in the resource that businesses rely most upon: people.

There have been many disputes over whether Michigan has cut funding for education; however, there have been significant disinvestments in K-12 education which are only exacerbated by the business tax cut. The MBT contained a $600 million School Aid Fund earmark that dedicated business tax revenue to schools and the CIT did not carry it forward; without the business tax cut, the School Aid Fund would have had more to spend on educating students. Per-pupil K-12 spending declined significantly following cuts to taxes for businesses. Per-pupil spending through the foundation allowance, the largest unrestricted funding source for school districts, in 2011 was $7,146 dropping to $6,846 in 2012, and has slowly climbed.30 It took seven years for per-pupil funding to fully rebound as it will finally be above the 2009 peak in 2016.

Compared with other states, Michigan ranked 13th worst in the country for the amount of spending per student that decreased over Fiscal Year 2008 to Fiscal Year 2015.31 Minnesota, the Midwest state that has experienced the most job growth and lowest unemployment rate over the same time period, has invested the most in education in the region and is 4th best in the country in terms of dollar increases.

There have been clear consequences from Michigan’s decision not to invest more in education. Schools have been forced to cut spending on programs that are beneficial to student learning, reducing the number of teachers and support staff, thereby increasing classroom sizes and inhibiting student progress. Nationally, Michigan students are falling behind their peers in math, reading and science—the core areas needed by employers to fill jobs and grow their businesses in a global economy.32

As much as people do, Michigan businesses also rely on the state’s roads as a way to transport their goods. According to a national report on Michigan’s roads, in 2009, trucking accounted for 67% of the freight tonnage moved while rail (19%), water (14%) and air (<1%) were used much less.33 Michigan is at the bottom of the Midwest states in per capita spending on roads, making road conditions unsafe, causing unnecessary damage and wasting fuel. Michigan lawmakers have struggled for the last decade to solve the transportation funding shortage. Business tax cuts have only added to the problem. Good, safe roads are critical to helping people get to work, children to school and products delivered. Increased revenue—rather than cutting revenue—is needed, because one-time funding solutions are not working.

Also suffering from a lack of state revenue and investment are Michigan’s local communities. Over the last 15 years, statutory revenue sharing to Michigan’s cities, villages and townships has declined from over $600 million annually to approximately $250 million.34 Counties have experienced reductions in state aid in recent years as well. These revenues are used to support local services, such as public safety, water and sewers, and roads. The last year Michigan fully funded statutory revenue sharing was budget year 2001. The Legislature’s constant diversion of revenue sharing to fill the state’s budget holes has caused local governments to postpone capital projects, scale back or eliminate recreational and library programs, and significantly reduce police and fire protection.

An educated workforce, good roads and local services are things that businesses rely upon to not only be successful and grow, but also in deciding where to locate. Michigan lawmakers may believe that providing tax cuts to businesses is the only incentive needed; however, without an investment in its people and communities, the state will continue to experience slower economic growth.

Increased Taxes and Poverty for the Rest

In their effort to promote business growth and job creation, Michigan lawmakers and the governor significantly shifted taxes to individuals. In 2011, taxes on individuals were increased by 23%, or $1.4 billion, while taxes for businesses were cut by 83%, or $1.6 billion. Several tax credits that were intended to provide tax relief for Michigan’s lowest earners were either reduced or eliminated. These tax increases on people came at a time of high poverty, high unemployment rates and a still recovering economy, making it even more difficult for people to make ends meet.

In general, most people believe that low- and middle-income people should not have to pay more of their income in taxes than others. However, the tax increases in Michigan have disproportionately harmed low- and middle-income people. With the changes fully implemented, the lowest income taxpayers (annual incomes under $19,000) experience the largest tax increases: 1% of their incomes; top earners (annual incomes $392,000 or more) experience no increase.35

With high poverty and unemployment levels, families were already struggling before their taxes were increased to benefit businesses. Poverty remains high in Michigan with nearly 1 in 6 living below the poverty level ($24,000 a year for a family of four). Deep spending cuts over the last decade, exacerbated by decisions to cut taxes for businesses, have taken a toll on the people in this state who need the most help. Since 2011, significant policy changes to public assistance ranging from implementing lifetime limits and asset limits to creating bureaucratic barriers to receive aid have reduced caseloads, but not poverty.

In the most recent Kids Count Data Book, Michigan falls behind all other Midwest states on child well-being; Minnesota is ranked first in the nation while Michigan’s overall rank is 33rd. In 2013, 1 in 4 Michigan children lived in poverty, and 1 in 3 children lived in a household where neither parent held a full-time job or they were forced to piece together part-time jobs that do not provide stable employment.36 Research shows that reducing income for already struggling families can have a particularly negative effect on children related to their educational attainment, future earnings and health, and thereby driving down economic growth.37

Policymakers in the state have shifted taxes onto working families. They have asked individuals to pay more, businesses to pay less, and have not chosen to use state revenues to invest in people. These decisions have led to families having smaller amounts left of their earnings, causing them to spend less and struggle more, all of which negatively impact the economy. Raising taxes on low earners slows economic growth; for every dollar lost due to a tax increase, total spending drops by about a dollar.38

Recommendations

Michigan has had a much larger climb out of the recession than other states. At its worst, Michigan had the highest unemployment rate in the nation. Michigan has still seen lags in personal income gains and poverty rates stagnated. Tax cuts for businesses have not proven to be a wise investment, especially in a state budget environment with historically low revenues, and have slowed the state’s economic recovery. To restart Michigan’s economic growth, lawmakers should:

Resist the temptation to cut business taxes even further. The recent tax cuts for businesses went too far and have not been the drivers for new job investment. Additionally, as part of the tax shift in 2011, businesses that had entered into agreements to receive generous tax credits for retaining and creating jobs and making capital investments in the state were allowed to keep these agreements. These credits have provided some uncertainty and instability in our budgeting and revenue streams, in terms of both amounts of the credits and when the credits are going to be claimed. While the state is attempting to provide some clarity to these credits and to better estimate revenue losses due to them, these credits will continue to reduce available revenue for investments in things that will grow our economy for decades.

Additional tax cuts would mean less revenue available for the state, which either means increasing taxes on families again or decreasing spending, hindering both the creation of communities that people and businesses want and the development of a workforce that can compete in a global economy. As costs of providing vital state services, such as Medicaid and the Healthy Michigan Plan, grow, lawmakers are already faced with a tight budget situation. Further cuts would only exacerbate that problem. Instead, policy- makers should revisit the 2011 tax shift to ensure the state has enough revenue to invest in Michigan’s priorities.

Explore new avenues for revenue to invest in things that people and businesses value. The state must invest in its people, workforce, infrastructure and communities. If Michigan is to truly recover it needs to become a place where people want to stay, live and raise families. Businesses use these factors much more when determining where to locate as do recent college graduates when determining whether to leave or relocate to a state. To do so will require raising additional state revenue. Options include:

    • Reviewing and eliminating ineffective tax expenditures. A tax expenditure is a broad term for preferential tax treatments, such as credits, deductions and exemptions, that reduce tax revenue. In other words, it is spending through our tax code. In Michigan, tax expenditures cost the state roughly $34-35 billion per year. While some of these continue to suit the purpose for which they were intended, many go unchecked and simply cost the state money. The state already provides a thorough list of tax expenditures, but does not have a process for reviewing these spending measures to ensure that they accomplish set goals.
    • Increasing the Corporate Income Tax rate or expanding the base. Michigan’s Corporate Income Tax (CIT) rate is below the national average and if increased, could help to recover lost revenue that occurred with the change.39 While the move from the Michigan Business Tax to the CIT was to eliminate the “double taxation” of pass-through entities, such as LLCs or partnerships, currently the business income of business entities is taxed at different rates depending on how they are formed. This left a highly volatile revenue stream from business taxes. If the base were broadened, the rate could be lowered and still bring in more revenue.
    • Adopting a fairer income tax structure. Michigan is one of only seven states that still relies on a flat income tax structure, which leaves low- and middle-income families having to pay a greater share of their incomes for taxes than the wealthy. Modernizing the income tax structure to a graduated tax could generate additional revenue and ensure more fairness for all earners.
    • Diversifying our sales tax base. Michigan’s sales tax is levied on the purchase of goods. Economists and policy experts have long argued that as the economy evolves from a goods-based economy to a service-based economy, sales and use taxes should reflect those changes. Otherwise, sales and use tax revenues will be continually reduced because they only capture a shrinking portion of economic activity. In addition, taxing goods and not services creates an unfair advantage for service-based sectors of the economy. Expanding the sales or use tax base to services also makes the tax more progressive because wealthier individuals tend to spend a greater percentage of their income on services.

Restore tax credits that help low- and middle-income people, and the economy. In the great tax shift of 2011, policymakers reduced the Michigan Earned Income Tax Credit (EITC) by 70%, increasing taxes on the workers earning the least in Michigan by $261.6 million. The EITC is one of the most effective ways to support working families and lift them from poverty. The EITC has a two-generation benefit, helping children in these families become healthier, do better and stay longer in school, and earn higher wages in adulthood. Research shows that the budgetary savings from cutting low-income tax credits has significant economic costs, making it more difficult to develop the highly skilled workforce needed in today’s economy. However, lawmakers should not take this recommendation to support a broad based income tax rate reduction. While the EITC provides targeted relief to the working families who need it most, a rate reduction disproportionately benefits those who make the most while hurting Michigan’s budget.

  1. Lester Graham, How much can a governor really affect job creation?, Michigan Radio, October 13, 2014.
  2. In 2005, the Ohio Legislature eliminated its Corporate Income Tax and began to phase out local taxes on business tangible property. These were replaced with a Commercial Activity Tax (CAT) on gross receipts. The CAT has collected approximately half of the revenue of the taxes it replaced. The evidence does not support any economic benefit for the state or individuals. (Michael Mazerov, Cutting State Corporate Income Taxes is Unlikely to Create Many Jobs, Center on Budget and Policy Priorities, September 14, 2010.)
  3. Joint Economic Committee of the United States Congress, Vice Chair, State-By-State Snapshots, October 2015.
  4. Michigan Department of Technology, Management & Budget, Bureau of Labor Market Information & Strategic Initiatives, Michigan Economic and Workforce Indicators and Insights, Summer 2015.
  5. Snyder signs tax reform bills to fuel state’s turnaround, Press Release, Office of Governor Rick Snyder, May 25, 2011.
  6. The Tax Foundation’s 2015 State Business Tax Climate Index looks solely on various tax systems in ranking states. Indiana and Michigan are the two top ranked Midwest states, coming in at 8th and 13th respectively, while Minnesota ranks 47th. (Scott Drenkard, Joseph Henchman, 2015 State Business Tax Climate Index, Tax Foundation, October 28, 2014.) ALEC’s state economic outlook weighs 15 different policy variables equally, but 8 of those 15 deal with taxes or tax changes. For the most recent document, Indiana, a low-tax state, is the top ranked Midwest state at 3rd, and Minnesota comes in at 48th (Michigan at 24th). Interestingly, when looking how states have performed over a 10-year period in terms of GDP, domestic migration, and non-farm payroll, Michigan and Ohio come in 50th and 49th in each ranking over the past 8 editions, while Minnesota has been the top performing Midwest state. (Dr. Arthur B. Laffer, Stephen Moore, Jonathan Williams, Rich States Poor States, American Legislative Exchange Council, April 2015.)
  7. Congressional Budget Office, Options for Responding to Short-Term Economic Weakness, January 2008.
  8. Michigan Department of Technology, Management & Budget, Bureau of Labor Market Information & Strategic Initiatives, Michigan Economic and Workforce Indicators and Insights, Winter 2015.
  9. Michigan residents with postsecondary education or training, such as an associate’s degree, have significantly higher earnings and are less likely to be in poverty. (Peter Ruark, Willing to Work and Ready to Learn: More Adult Education Would Strengthen Michigan’s Economy, Michigan League for Public Policy, March 2015.)
  10. ALICE – Asset Limited, Income Constrained, Employed – Michigan: A Study of Financial Hardship, Michigan Association of United Ways, September 2014.
  11. Ibid
  12. Ibid
  13. Michigan Department of Technology, Management & Budget (Summer 2015), op. cit.
  14. Yannet Lathrop, Labor Day in Michigan Report: Pay Falls for Low-Wage Men yet Women Still Far Behind, Michigan League for Public Policy, August 2014.
  15. Ibid
  16. JPMorgan Chase, Driving Opportunity in Detroit: Building a Middle-Skill Workforce to Strengthen Economic Recovery and Expand the Middle Class, April 2015.
  17. John Wisely, What will the future of Michigan’s job market look like?, Detroit Free Press, October 1, 2014.
  18. According to a recent analysis, over 40% of those employed in a middle-skill job make a median wage of $15 to $19 per hour, and one-third make between $20 and $30 per hour. (Michigan Department of Technology, Management & Budget, Bureau of Labor Market Information & Strategic Initiatives, Michigan Economic and Workforce Indicators and Insights, Winter 2015.)
  19. Anthony P. Carnevale, Nicole Smith and Jeff Strohl, Recovery: Job Growth and Education Requirements through 2020, Georgetown University Center on Education and the Workforce, June 2013.
  20. Michigan Department of Technology, Management & Budget (Summer 2015), op. cit.
  21. Cyberstates 2015: The Definitive State-by-State Analysis of the U.S. Tech Industry, Tech America Foundation, 2015.
  22. John Wisely, op. cit.
  23. Rick Haglund, State Policies Matter: How Minnesota’s Tax, Spending and Social Policies Help It Achieve the Best Economy Among Great Lakes States, Michigan Future Inc., June 2014.
  24. “Never since we began rating the states in 2007 has a high-tax, high-wage, union-friendly state made it to the top of our rankings. But Minnesota does so well in so many other areas – like education and quality of life – that its cost disadvantages fade away.” (Scott Cohn, Minnesota is 2015’s Top State for Business, CNBC, June 24, 2015.)
  25. Michigan Future Business Index, Phoenix Innovate, Michigan Business Network, and Accident Fund Insurance Company of America, June 2015.
  26. Michigan Future Business Index, Phoenix Innovate, Michigan Business Network, and Accident Fund Insurance Company of America, June 2014.
  27. Senate Fiscal Agency, General Fund/General Purpose Revenue: FY 1978-79 to Estimated FY 2015-2016, January 16, 2015 Consensus Revenue Estimates, http://www.senate.michigan.gov/sfa/Revenue/GFGPRevDistrib.PDF.
  28. Ibid
  29. Ibid
  30. Pat Sorenson, Preschool Boosted, Per-Pupil Funding Increased in Education Budgets Signed by Governor, Michigan League for Public Policy, July 23, 2014.
  31. Michael Leachman and Chris Mai, Most States Still Funding Schools Less Than Before the Recession, Center on Budget and Policy Priorities, October 16, 2014.
  32. Based on 2013 National Assessment of Education Progress data on fourth and eighth grade reading, math, and science scores as outlined in Stalled to Soaring: Michigan’s Path to Educational Recovery. 2014 State of Michigan Education Report, The Education Trust-Midwest.
  33. TRIP, Michigan Transportation by the Numbers: Meeting the State’s Need for Safe and Efficient Mobility, January 2014.
  34. Jim Stansell, Revenue Sharing, House Fiscal Agency Budget Background Briefing, October 2014.
  35. Impact of 2011 Personal Income Tax Changes Enacted into Law, if Fully Phased?in for Tax Year 2013, All Michiganders, 2013 income levels, Institute on Taxation and Economic Policy, January 2015. 
  36. Annie E. Casey Foundation, Kids Count 2015 Data Book, August 2015.
  37. Kate W. Strully, David H. Rehkopf, and Ziming Xuan, Effects of Prenatal Poverty on Infant Health: State Earned Income Tax Credits and Birth Weight, American Sociological Review, XX(X)1?29, 2010. 
  38. Nicholas Johnson, Budget Cuts or Tax Increases at the State Level: Which Is Preferable When the Economy Is Weak?, Center on Budget and Policy Priorities, http://www.cbpp.org/cms/?fa=view&id=1032.
  39. Andrew Phillips, Caroline Sallee, Katie Ballard, and Daniel Sufrankski, Total State and Local Business Taxes. State-by-State Estimates for Fiscal Year 2013, Council on State Taxation, August 2014.