World class colleges, sluggish financial aid

It is a point of pride among Michiganians that we have great public universities and private colleges.

We have two Top Ten universities that are friendly rivals, and high-quality regional universities. In addition to providing an excellent education for Michigan residents, our universities attract respected scholars and cream-of-the crop students from all over the world. We have a number of widely respected private colleges as well.

So why does Michigan lag behind most other Midwestern states and much of the country in providing financial aid that makes such great education affordable?

Per capita, Michigan spends $194 on need-based financial aid grants per undergraduate student — lower than every other Midwest state except Ohio, and is only one-quarter what Indiana and Illinois spend.

According to the Project on Student Debt, in 2011-2012, Michigan private 4-year college graduates owed an average of $32,672 in student debt, 74% more than similar graduates owed in 2003-2004. For public university graduates, it was $28,147, a 50% jump during the same period.

Having highly skilled people in our state is great for business and the economy, but when our graduates spend years paying off debt, it takes a little of the blush off the bloom. High college debt limits the upward mobility of those graduates and restricts the money they can spend in their communities. At worst, it can contribute to severe financial difficulty.

Michigan needs to make the affordability of education as high of a priority as the quality and prestige of our institutions:


Flood waters: a taxing problem

From the League’s First Tuesday newsletter
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My family and I were unfortunate enough to experience the recent flooding in Southeast Michigan. Despite the fact that we lost appliances, some precious photos and an assortment of stuff we had accumulated over the past 37 years, we will be OK. We had insurance and were able to get a company to clean and sanitize our basement very quickly. And we will not need to go into our retirement funds to make our losses whole.

But the 100-year flood event reminded me about Hurricane Sandy almost two years ago in New York and the devastation and damage it wrought. For those of you who read my First Tuesdays religiously, you may remember I wrote about my experience in New York, helping my daughter and her husband with their newborn son, Jacob, who was a Hurricane Sandy baby.

I was struck then, as I am now, about the importance of our public infrastructures, as well as our first responders, and government services such as garbage collection and public transportation. I am also struck and concerned about the devastating losses and public health issues that might arise from this flooding catastrophe, which has been dubbed “Latrina” — losses and health issues that impact those that have no insurance, are underinsured or who don’t have the means or information to adequately clean up their living spaces so that mold or the fallout from contaminated water don’t affect them and their family in the future.

I am also reminded how important taxes are to making sure we have the resources to build a strong infrastructure, and how cutting taxes and/or not increasing revenues has greatly reduced the ability to have updated or state-of-the-art systems to handle such catastrophes. Our taxes pay for Michigan State Police divers who free people from their underwater cars, adequate roads that aren’t crumbling and a public health system that provides information and care. Our taxes pay for police officers who patrol our streets after catastrophic events. Our taxes pay the salaries of garbage collectors who are literally handling tons of contaminated household goods.

The private sector can’t address these needs, but a strong public sector can. Next time you see a police officer, a garbage collector or a woman filling potholes, say thank you. And next time a conversation comes up about taxes, think about what you would do without those folks who are working around the clock to make sure we are safe, sound and healthy.

I am thankful every day that I pay taxes.

– Gilda Z. Jacobs

If there’s a will, there’s a way

A new video and visually engaging report out today strongly makes the case for rebuilding the state’s education system, protecting Michigan’s abundant natural resources and investing in roads and our communities.

The project is called The Michigan Dream at Risk, from the Michigan Economic Center, an affiliate of Prima Civitas, a nonprofit organization that works to create resilient, adaptable communities in Michigan.

Gilda Z. Jacobs, the League’s president and CEO, and board members Charley Ballard and Bob Kleine were interviewed for the project. (more…)

A stronger Michigan economy is within reach

Yes we can grow Michigan’s economy, create good jobs and expand opportunities for all Michiganians with the right public policy decisions. A new report by Erica Williams at the Center on Budget and Policy Priorities outlines how policymakers can make that happen.

Williams explains that states need to invest adequately in education, healthcare, transportation and workforce development. And in order to do that, they need to make decisions about how to raise and spend revenues with an eye toward the future. (more…)

State budget balancing act

As Michigan lawmakers head off to Mackinac Island for the annual Detroit Regional Chamber of Commerce policy conference, they are scrambling to resolve several big ticket issues that have slowed down the budget process and could reduce the amount of money available for services critical to our state’s economic development.

First is how best to fund much-needed improvements in Michigan roads, bridges and public transit. The governor wants at least $1.3 billion a year for improvements while some think that isn’t enough. There is little controversy that something needs to be done, but much disagreement on how to pay for it. (more…)

Feel-good proposal is bad public policy

A new proposal to create so-called sales tax holidays here in Michigan may sound appealing, but it’s poor public policy.

Sen. Mark Jansen’s proposal (Senate Bill 943) exempts certain items from the sales tax for several days prior to camping season, the beginning of school and hunting season. The idea is that eliminating the sales tax during certain times of the year will help low-income taxpayers, spur spending and cost the state little in revenue, but the facts show otherwise.

And because of that, it’s not surprising that in recent years a number of states have ended their sales tax holidays. (more…)

Mich.’s working families pay $247 million more

The numbers are in and they show that the reduction in the Michigan Earned Income Tax Credit from 20% of the federal credit to 6% has resulted in a $247 million tax increase on low-income working families.

Recently released data on the Michigan EITC for tax year 2012 from the Brookings Institution and the Michigan Department of Treasury reveal the actual EITC dollars lost for hardworking Michigan families. (more…)

Tax cuts do not lead to prosperity

Two new studies out this week should help drive a stake through the heart of the argument that cutting taxes will lead to prosperity.

For far too long tax cuts have been the tool of choice for Michigan policymakers. And guess what? Tax cuts don’t work as promised. (more…)

Rebuilding the Homestead Property Tax Credit

Gov. Rick Snyder wants to use some of the state’s budget “surplus” (higher-than-anticipated revenues) to restore a portion of the Homestead Property Tax Credit that was cut in 2011.

The governor reduced the HPTC starting in Tax Year 2012, eliminating the credit for 362,000 Michigan families. He now wants to restore the credit to about 100,000 of those families. (more…)

EVIP madness

As I was filling out my NCAA bracket last week I had an epiphany—maybe this is how statutory revenue sharing is going to be decided in the future, thanks to a complicated Snyder administration program known as EVIP. For example, municipalities could get ranked and placed into a bracket with one another, advance by submitting more meaningless documentation to the state, and maybe receive enough to provide some of the public safety services they have had to stop delivering.

The odds of how much, if any, statutory revenue sharing a municipality will receive are surely similar to the largest of March Madness office pools. (more…)

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