Restored Public Goods Investment Project - Michigan Economic Center

“Michigan Dream” Restored Public Goods Investment Project Focus Group and Investment Policy Scan Report

Contents

Investment Policy Scan Discussion and Policies & Funding Mechanisms Tested

Detailed Findings

Executive Summary

Background & Methodology

Public Goods Investment Project p.2

Public Goods Investment Project Citizen Focus Groups Key Findings October 2012

Caveat: This report is based on findings from qualitative research. These findings should be considered directional in nature, as the number of respondents was limited.

Background & Methodology

Background

Our assignment was to engage Michigan residents and gain their feedback on a range of potential public goods investments Objectives: u  u  u  u 

Identify common Michigan values across residents Identify common perceptions of the key challenges facing Michigan Evaluate potential public goods investments Evaluate various funding mechanisms


Methodology

Eight focus groups were conducted with civic-minded Michigan residents in Metro Detroit, Ann Arbor, Flint, Grand Rapids, and Traverse City between October 6-12, 2012 October 6 Farmington Hills, MI o  Oakland County Residents – white collar skew o  Detroit Residents – African-American

Flint, MI o  Flint-area Residents – Seniors (62+)

Participants were recruited by the following specifications: o  Recruited 11 to seat 8 o  Have not participated in a political/public

affairs focus group in last 12 months

o  Likely voter in November 2012 election

October 8

o  Self-identified as likely voter

Ann Arbor, MI

o  Have voted in at least one state or local

o  Out-county Wayne Residents – blue collar skew o  Ann Arbor-area Residents

October 11 Grand Rapids, MI o  Grand Rapids-area Residents o  Grand Rapids-area Residents – Young Families

October 12 Traverse City, MI o  Traverse City-area Residents

election the past year

o  Mix of party affiliation (D, R, I) appropriate to

particular citizen segment/geography

o  Have at least a base level of civic-

mindedness (measured attitudinally)

o  Roughly 50/50 male/female o  Mix of incomes and education-level

appropriate to particular citizen segment/ geography

o  Mix of occupations o  Standard Security Screen Public Goods Investment Project p.7

Methodology

The groups covered a discussion of general perceptions of Michigan, Michigan’s current reality vs. ideal; Michigan “values; and key challenges facing the state before moving into evaluation of policy ideas and funding/accountability mechanisms General Flow of Discussion: u 

Michigan “Values” o  Michigan free association o  Picture sort – respondents choose from range of pictures: three pictures that represent

Michigan “ideal”; three pictures that represent Michigan reality

o  Respondent ranking of various Michigan “values” listed on cards u 

Michigan Challenges: o  Respondent listing of challenges facing the state o  Ranking of challenges according to most important/most urgent

u 

Policy Ideas: o  Respondent ranking of various policy ideas listed on cards

u 

Funding/Accountability Mechanisms: o  Respondent ranking of various policy ideas listed on cards

u 

Synthesis o  Discussion of links between values, challenges, policies, and funding/accountability

mechanisms

o  Respondents form initial “clusters” Public Goods Investment Project p.8

Executive Summary

Executive Summary

1.  Michigan residents share common values, despite differences in background and geography; most immediate among these values is the idea of “economic opportunity for all who are willing to work hard” o  Fusion of two values that resonated with a wide range of citizens and provided underpinning for a range of popular investment policy ideas: l 

“We believe everyone should have the opportunity to succeed”

l 

“We value hard work”

o  This “economic opportunity/hard work” idea is rooted in Michigan’s history, with residents relating their family stories of parents and grandparents who migrated to the state for the opportunity to work in the auto industry o  This promise of earning a living is also the value most threatened by the current economic climate, and residents shared stories of relatives and friends who have left the state in search of opportunity o  Many residents have internalized their struggles to overcome the difficult economy, identifying as “fighters” who struggle through adversity

Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.10

p.10

Executive Summary

2.  In addition to economic opportunity, Michigan residents also value the opportunity to enjoy what they feel is special about Michigan – the outdoors o  Residents enjoy the opportunity to “escape” to Michigan’s outdoors – its lakes, rivers, forests, and wildlife, as captured in the idea of “up North” o  This is seen as something unique and differentiating about Michiganders o  Compared to economic opportunity, however, Michigan’s natural resources are not seen as a priority issue to address

3.  This vision of Michigan as a great place to earn a living and enjoy the outdoors represents something of a Michigan “dream”, and for this reason many residents feel that Michigan is a “great place to raise a family” 4.  Michigan residents were consistent across groups in their support for various policies, with the primary focus on fixing the basics through support to vital services o  For many, public safety has become the most pressing concern o  Addressing vital services – police, fire, basic infrastructure – was commonly viewed as a necessary condition for economic growth


p.11

Executive Summary

5.  After vital services, Michigan residents are interested in policies that support higher education and small business/innovation, but they want “strings attached” o 

For education, this means giving back through public service or continued residence in the state, as well as top performers who have proven themselves

o 

For small business and innovation, it means support for businesses and entrepreneurs either from Michigan or committed to staying in Michigan

o 

The overall notion of “strings attached” ties back to the core value of “economic opportunity for all who are willing to work hard”

6.  Residents do not see environmental investment as an immediate priority, but they are supportive when it is linked back to economic opportunity o 

“Pure Michigan” campaign has near universal awareness, is seen as helping drive tourism, and instills pride in the state; it also provides a strong potential “hook” in linking environmental investment to economic opportunity

o 

There is interest in, but also some skepticism of policies aimed at supporting future industries based on natural resources (e.g. wind, solar), preferring more straightforward support for small business

o 

Policies that focused purely on the environment without a link back to economic problems facing Michigan residents were viewed positively but not considered immediate priorities in need of support Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.12

p.12

Executive Summary

7.  On balance, there is support for funding priority investment areas if those investments are linked to the core values shared by Michiganders o 

There is shared understanding that many public services and assets have been cut to a critical level – particularly core services like roads, public safety, and education

o 

Citizens support a range of specific public investment programs, provided they have a grounding in economic opportunity and have the right “hard work” strings attached and a fair method of funding

8.  There is real opportunity to “bundle” programs addressing a range of important investment priorities, provided they are themed around these shared core values o 

There appears to be support for programs that combine more immediate priorities (e.g. “vital services” like safety and infrastructure) with less urgent but still highly valued areas such as environmental protection, provided that the value linkage is there


p.13

Detailed Findings

Detailed Findings - General Observations

Michigan residents prioritized addressing basic needs such as public safety and jobs over more higher order needs such as natural resources and the environment u 

Education and small business are also highly valued, but with less urgency than creating jobs and reducing crime (except in urban areas like Detroit/Flint) Jobs/ Economy

Education Public Safety

Value Most

Small Business/ Innovation

Natural Resources/ Environment Mass Transit

Basic Infrastructure/ Roads Cities/ Detroit

Gas Prices/ Energy

Government Waste

Most Urgent


p.15

Detailed Findings: General Observations

In identifying “Michigan Values”, residents focused on values indicative of their current challenges such as “hard work”, “fighting”, and “opportunity to succeed” u  However, residents continue to value recreation, the outdoors, and having a good place to raise a family/keep it close Top Michigan Values

Overall Score

We value hard work

25

We fight through adversity

18

We value having great places to escape

16

We believe everyone should have the opportunity to succeed

15

We care about our abundant natural resources

15

We believe our children should have the same opportunities we had

14

We value having a good place to raise a family

14

We believe it is important to help those in need

12

We are proud of our neighborhoods and communities

11

We are family oriented and want our family members to stay close

11

Innovation is part of our DNA

9

We believe that we have the power to shape our future

8


p.16

Detailed Findings: General Observations These values underpinned their choices of policies, with “opportunity for all to succeed” and “hard work” framing the most popular education and small business policies, while “good place to raise a family” resonated across all policies as a universal value Infrastructure/Roads

Education

Innovation / Small business

Cities

Stay in Upgrade Michigan Michigan Hatch Vital Michigan Michigan Vital Brownfield Magnet Merit Michigan Promise Michigan Services Corps Services / Historic Cities College Roads Program Scholarship Fund Fund

Outdoors/Natural Resources

Michigan Pure Resource Sustainable Michigan Innovation Cities Fund Fund Fund

We value hard work We believe everyone should have the opportunity to succeed We value having great places to escape We care about our abundant natural resources We value having a good place to raise a family We believe it is important to help those in need We are proud of our neighborhoods and communities We are family oriented and want our family members to stay close Innovation is in our DNA


p.17

Detailed Findings - General Observations The priorities of Michigan residents can be viewed against Abraham Maslow’s hierarchy of needs, with the focus on the more immediate needs of public safety and economic opportunity u 

u 

Policies focused on longer-term/aspiration issues such as natural resources and urban quality of life may not fully resonate until the “must haves” of safety and economic security have been met The more urban and economically depressed areas in Michigan are even more focused on the “bottom of the pyramid” issues

Nice to Have

Small Business/Innovation Higher Education

Must Have

Jobs/Economic Opportunity Public Safety

Great place to raise a family

Natural Resources, Recreation, and Urban Quality of Life

Economic Opportunity for all who are who work hard

Aspirational: Michigan Ideal


Detailed Findings - General Observations

More exploration is needed, but residents were open to policy “bundles” that address both immediate needs (public safety) and longer-term issues related to education, innovation, cities, and natural resources u 

Michigan Ideal

u 

There is a clear opportunity for a broader vision or road map to address Michigan’s near-in and longer-term policy priorities Policies focused on longer term priorities could have short term relevance if tied to more pressing needs such as economic opportunity

Support for natural resources and urban quality of life Innovation/Small business Incentives for businesses committed to Michigan

Michigan Reality

Access to Higher Education in exchange for service/ hard work

Focus on Vital Services

Short term

Pounce CatLong Treats Qualitative Term Public Goods Investment Project Exploratory p.19

p.19

Detailed Findings – Perceptions of Michigan

Michigan residents share common top-of-mind associations of what “Michigan” means to them u  The

Great Lakes was the most common association among all groups u  Many think of the outdoors, with a specific focus on outdoor recreation (fishing, boating, and hunting) u  The auto industry was also common, both in a historic and present sense u  The difficult economy and unemployment was top-of-mind for many u  Other common responses included the universities (and college sports), professional sports teams, the four seasons/cold winters, and Detroit Respondents are mixed in identifying as “Michiganders”, with Detroit residents in particular identifying as being Detroit residents first and foremost. u  There also appears to be a fairly distinct Northern Michigan identity, and to a lesser extent people in the Grand Rapids area have their own regional identity. Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.20

p.20

Detailed Findings – Michigan reality vs. ideal

There is a significant gap between the current reality facing Michigan and the ideal u  Michigan’s

reality is largely defined by hardship, anxiety, and struggle*

o  In describing Michigan’s reality as one of adversity, it is important to note that

residents often spoke in terms of resilience and overcoming adversity as opposed to despair - “we’ve been beaten, bloodied but we’re still standing”

*The exception is the Grand Rapids group of younger respondents with young children – for the most part they were positive about the current reality


p.21

Detailed Findings – Michigan reality vs. ideal

Michigan’s ideal is a state that has overcome its problems and is a great place to work, play, and above all raise a family u  Michigan’s ideal included images of future industries (e.g. wind and solar) as well as a restored auto industry


p.22

Detailed Findings – Michigan values

Michigan residents value hard work, linking it to Michigan’s history as a place where people from across the United States came to work in the auto industry u  “If

you wanted to work hard, you could do well” u  This value came through in the education policy concept discussions, where many respondents emphasized the need to link education incentives to performance, service, and giving back to the state u  While outside the scope of this study, it might be useful to explore if people outside of Michigan share this perception of Michigan residents as hard workers


p.23


There is a strong identity among many Michigan residents of being “tough” and “fighters” – that people from Michigan have endured much, from the decline of the auto industry to unemployment in general, but they continue to fight through the adversity u  This

identity is reinforced by the harsh winters u  For Detroit residents, this is also linked to the ability to persevere despite high levels of crime – “Detroit is hard core”


p.24


Michigan residents prioritize “family” in many ways, with values focusing on the family resonating across groups u  Michigan

is viewed as being “a good place to raise a family”, inclusive of good schools and the outdoors u  Many residents want “their children to have the same opportunities” that they had, a value they feel has been challenged by the reality of Michigan today u  Many residents did express frustration in keeping their family close, with many discussing the need for friends and relatives to depart to find opportunity


p.25


Residents value Michigan’s natural resources and Great Lakes, primarily through the lens of recreation u  “Up

north” as a place to escape (a “haven”) is a key part of what makes Michigan special, and is often associated with family u  The emphasis on the “outdoors” and recreational activity was common among all groups, while the more abstract notion of “environment” and clear air and water had less resonance u  For urban Detroit residents, these values were also present but translated more as clean and maintained city parks and green spaces u  While Michigan residents value their natural resources, when pressed they place greater value on more immediate needs


p.26


Michigan residents care about their neighborhoods and communities, and for many this resonated with the need for public safety and reducing crime u  The

image of Detroit’s decline was common across groups, but so was the important of “fixing” the city - and the importance this has for the image of the state as a whole u  “We are only as strong as our weakest link” Values such as “we work together” and “embracing change” did not resonate with the current reality but came through as aspirational u  While respondents didn’t think they were necessarily true for Michigan now, in discussing policy ideas they often chose these values as representative Other self-identity images that occasionally surfaced included: u  Midwestern-style friendliness, heritage for innovation (associated with Henry Ford, car industry primarily). Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.27

p.27

Detailed Findings – Policy Ideas

Michigan residents have a strong interest in improving the basics in terms of public service delivery Michigan residents are focused on solving more immediate problems such as public safety/crime and poor/decaying infrastructure u  Addressing these issues is viewed as necessary for success in other areas such as attracting business and keeping kids close u 

o  “Safety is crucial for business” o  “Roads are terrible…people don’t want to come here”

In this vein, the “Vital Services Fund” policy idea was particularly popular across groups, especially in Detroit, Oakland County, and Flint u  In terms of infrastructure alone, the same preference for getting the basics right was evident – residents are looking for better quality roads before mass transit/ transportation alternatives u 

Policy Idea

Overall Score

Vital Services

34

Upgrade Michigan Roads

24

Mass Transit

17

Urban Innovation Districts/21st Century Places

13

State Infrastructure Bank

10

Transportation Alternatives

Pounce Cat Treats Qualitative 7 Public Goods Investment Project Exploratory p.28

p.28


Residents emphasized the importance of education, but they prioritized policies with “strings attached” in exchange for student support u 

Residents preferred concepts that emphasized “hard work” such “Michigan Merit” or giving back such as “Stay in Michigan” and “Michigan Corps” o  “College is expensive, but it’s not a handout” o  “Retains Michigan talent, and that way we get something out of it”

Policy Ideas - Education

Overall Score

Michigan Corps

33

Stay in Michigan College Fund

26

Michigan Promise Program/college access for all

25

Michigan Merit Scholarship

25

Michigan College Fund

17

No Worker Left Behind

15

Keep Our Colleges Competitive

13

Science, Arts, and Culture Fund

7


p.29


With regard to innovation and small businesses, residents gravitated to support for local entrepreneurs as opposed to supporting new industries that may be unproven u  Residents

expressed a general interest in supporting businesses committed to Michigan, that either started here or are willing to stay o  “Like Pure Michigan, I want to see Pure Opportunity”

u  Hatch

Michigan, emphasizing support to start ups, was popular across groups u  Residents wanted to support the Michigan Resource Innovation Fund, but they wanted more reason to believe that the industries mentioned could be successful Policy Idea Hatch Michigan Fund

Overall Score 41

3rd Frontier Innovation Fund

6

Michigan Resource Innovation Fund

4 Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.30

p.30


Residents by and large supported Pure Michigan amongst the natural resources policy ideas This policy linked closely to their own interests - enjoying the outdoors and tourism/jobs u  Respondents thought the more conservation-focused concepts were important, but not as broadly appealing as “Pure Michigan” and not as immediate of a priority to other policy priorities u  Pure Michigan is a hook that leads with tourism but can then bring along with it some of the conservation-related policy ideas u 

o  “Pure Michigan is great because it brings tourists to the state, good for the

tourists, clean connotation, protecting the outdoors fits with who we are as Michiganders” Policy Ideas – Outdoors/Natural Resources

Overall Score

Pure Michigan Fund

41

Michigan Resource Innovation Fund

20

Sustainable Cities Fund

18

Outdoor Legacy Fund

14

Mass Transit

Pounce Cat Treats Qualitative 9 Public Goods Investment Project Exploratory p.31

p.31


Respondents did not always initially identify “cities” as a major policy problem up front, but upon further discussion it was generally viewed as one of the top areas of need u 

Cities play a key role in both the overall image of Michigan but also in keeping families close o  “Cities are important to keep people here” o  “Michigan is Detroit and people think of Detroit they think of crime”

The focus again was on “Vital Services”, however, when introduced later in the groups, “urban innovation districts” garnered support u  Residents recognize the need for making cities more livable, not just from a quality of life stand point, but as a means of attracting business and giving their kids a reason to stay in Michigan over moving to Chicago or other major areas u 

Policy Idea

Overall Score

Vital Services

35

Brownfield/Historic Preservation Tax Credit

21

Magnet Cities

17

Sustainable Cities Fund

15

Urban Innovation Districts/21st Century Places

14

Science, Arts, and Culture Fund

Pounce Cat Treats Qualitative4 Public Goods Investment Project Exploratory p.32

p.32

Detailed Findings – Funding Mechanisms

Residents did not embrace funding mechanisms per se; however, there was not strong opposition to funding policy priorities – it is a question of how u  The

greatest interest was in mechanisms that taxed other groups, such as a “sin tax” or taxes on polluters and extractive industries u  There was moderate support for a progressive income tax u  “Violence tax” was introduced in later groups, and generated some interest, but the difficulty determining which types of weapons would qualify for the tax became problematic u  There is support in principle for local/regional taxing authority for certain types of initiatives (e.g. roads/infrastructure), though the mechanics easily become confusing u  The idea of a broader, but lower rate sales tax needs further fine-tuning to fully evaluate, as respondents quickly expressed concerns about how it would affect them and change their purchasing behavior u  Vehicle registration taxes area seen as something that have already been overused u  There was absolutely no interest in additional fuel tax of any sort Pounce Cat Treats Qualitative Public Goods Investment Project Exploratory p.33

p.33

Michigan Dream Restored -‐ Public Goods Investment Project

Public Good Investment Policy Inventory Na=onal and State Scan Advisory Board Review – August 2012

Discussion: Public Good Investment Strategies Successful State Examples Minnesota Clean Water, Land and Legacy Amendment (2008) Legislature placed cons=tu=onal amendment on ballot, passed by voters to raise sales tax by 3/8 cent for 35 years to dedicate funding to protect drinking water sources; to protect, enhance, and restore wetlands, prairies, forests, and fish, game, and wildlife habitat; to preserve arts and cultural heritage; to support our parks and trails; and to protect, enhance, and restore our lakes, rivers, streams, and groundwater. Raises @$300 million annually How it works: 33% annual revenue to Outdoor Heritage Fund (conserva=on); 33% to Clean Water Fund; 14.25% to Parks and Trails Fund; 19.75% to Arts and Cultural Heritage Fund. Legislature makes recommenda=ons for funding based on recommenda=ons from stakeholder councils. Money must supplement exis=ng funding sources. What helped it succeed: Sophis=cated message tes=ng and framing ballot ques=on to speak to core values of Minnesota ci=zens, i.e. water, outdoors make our state special

Discussion: Public Good Investment Strategies Successful State Examples Ohio Third FronOer (2005, 2010) Third FronOer a $2.3 billion state bond-‐financed ini=a=ve that supports a variety of innova=on-‐promo=ng economic development programs. Voters approved a legisla=vely referred program of $1.6 billion in 2005; and in 2010 approved a legisla=vely-‐ referred state statute authorizing $700 million in addi=onal general obliga=on bonds to support 3rd Fron=er ac=vi=es. How it Works: Bond proceeds support: pre-‐seed and venture funds; cataly=c and intermediary organiza=ons that work with universi=es and outside investors to commercialize research; research university centers of excellence. What helped it succeed: First effort failed in 2003; succeeded in 2005 when coupled with public infrastructure and University facili=es investment for “economic development and jobs”. 2010 “reup” succeeded with voters due to evalua=on/evidence of economic impact: 10:1 ROI; $6.6 billion in economic ac=vity, 41,000 new jobs, $2.4 billion new wages.

Discussion: Public Good Investment Strategies Other Big State and Local Successes California Stem Cell Research and Cures IniOaOve (2004): $3 billion ballot measure to mark California as center for Stem Cell Research Pennsylvania Growing Greener II (2005): voter referendum to borrow $625 million for environment, open space, farmland preserva=on, brownfields, abandoned mines and watershed protec=on Maine Technology Asset Fund (2007) $55 million voter approved bonds for research, development and commercializa=on Texas Cancer PrevenOon and Research InsOtute (2007) legisla=vely placed voter referendum on $3 billion bonds to finance Cancer Preven=on and Research Ins=tute of Texas Ohio Clean Ohio Fund (2000) $400 million and (2008) $400 million reup -‐ legisla=vely referred voter referendum for environmental conserva=on, preserva=on, and revitaliza=on

Discussion: Public Good Investment Strategies Other Big State and Local Successes

TransportaOon Measure R -‐ Los Angeles (2008) ½ cent sales tax 2/3rds voter-‐approved – $40 billion over 30 years for new county transporta=on investments TransportaOon Denver Fastraks (2004) is a twelve-‐year, $6.5 transporta=on expansion plan funded through voter approved $.4 cents sales tax increment increase, leveraging private and federal investments. Allegheny Regional Asset District (PiXsburgh): (1993) County Commission and 128 local governments approved a 1% local op=on sales tax ($170 million/year): ½ strategic grants; ¼ county government; ¼ formula to local governments. Sold as “tax reform” to provide needed revenue for local governments and fund “regional assets”. Denver Metro ScienOfic and Cultural FaciliOes District: (1988) 7-‐ county district (matching transporta=on district) voter approved .1% sales and use tax ($35 million/ annum) to fund arts, culture, scien=fic and programs; to benefit “future genera=ons”. CauOonary Tale: Georgia TransportaOon Referendum (July 31, 2012). Only 3 of Georgia’s 12 regional transporta=on district approved a local op=on 1% transporta=on sales and use tax for regionally iden=fied transport projects

Discussion: Public Good Investment Strategies Michigan Ideas: Higher EducaOon Investment Policy Idea 1) Higher Educa=on access for All Michiganders: Fund every adult for 2 or 4 years postsecondary educa=on: •  Michigan 2020 plan. (4 year university median cost -‐ $1.8 billion; less with CCs) •  “No Worker Len Behind” 2 year community college equivalent for all ($200 Million) •  Michigan Merit “Promise Scholarship” renewed ($140 million) •  Michigan Future Tax Credit and Loan Fund: tax credit for costs of higher educa=on; loan fund to advance $ 2) Put Michigan back in a compe((ve funding posi=on vis-‐à-‐vis higher educa=on •  “Top 10 funding for Top 10 performance” or $100 million/year universi=es (need to add in community colleges) •  Fund to a level at least equal to na=onal average for states ($950 million more) •  Fund to a level gepng at least back to 50/50 individual/family tui=on vs. state appropria=ons; or Back to historic 1/3 tui=on-‐2/3rds state (Universi=es): 1/3;1/3;1/3 property tax for Community Colleges

Discussion: Public Good Investment Strategies Michigan Ideas: Higher EducaOon 3) Create a P-‐22 Educa=on fund within which higher educa=on gets significantly more of an enhanced revenue stream 4) Higher Educa=on –Talent Fund –(2% tax on services, sales tax down to 5%) to: increase students at public universi=es (50%), global research (14%), student financial aid (for public and private), 35% 5) 3rd Fron=er (Ohio or Maine-‐like) state university centered-‐-‐research/ commercializa=on and innova=on fund growing new firms, and jobs, through higher educa=on-‐led centers of excellence • 

Or, Public-‐Private Higher Educa=on Innova=on matching fund -‐ rewards regionally determined centers of excellence and success at private-‐public resource matching

6) Refundable loan of up $8,000 to student; Each year remains in Michigan, 20% forgiven 7) Pay for Service Learning – Americorps 8) Michigan Higher Educa=on “Promise Fund”: match/leverage state/private/ philanthropic dollars to pay for postsecondary for graduates of x community schools

Discussion: Public Good Investment Strategies Michigan Ideas: Higher EducaOon Reform – InnovaOon -‐ CreaOve Angle

• 

Fund students, not ins=tu=on

• 

Fund for performance (comple=on of degrees, mee=ng regional/ins=tu=onal criteria for performance, economic development goals)

• 

Public-‐Private Matching Requirements

• 

Leverage Community Colleges: fund first years of post-‐secondary at low-‐cost CC’s

• 

Eliminate differen=al treatment/preferences in Michigan’s tax code: (e.g. services not taxed: tax services, reduce tax on other goods consistent with Governor bias for equal treatment)

• 

Fund talent remaining in Michigan

Discussion: Public Good Investment Strategies Michigan Ideas: Higher EducaOon Financing Mechanism • 

“Fair Tax” idea-‐ some form of lower rate, less exemp=ons, that raises more money: like 2% sales tax on services (including health care)-‐ reduce sales tax on goods from 6-‐5%

• 

Public, private, philanthropic match funds (local) – 

Capture tax benefits of rising housing values

• 

Sunset tax credits; collect online taxes, procurement savings (Michigan 2020)

• 

Tax or Fee of 6% against the gross sales of alcohol/sin taxes in Michigan

• 

Bond-‐ballot ini=a=ve like 3rd Fron=er

Discussion: Public Good Investment Strategies Michigan Ideas: Urban -‐ CiOes Investment Policy Idea 1) Restore revenue sharing to an (historic target) level 2) Locally/county designed, elected official (county) or voter-‐approved tax (excise/sales/ income) to support “public infrastructure” (fire/safety/roads/water) that is founda=on of economic development/growth 3) 21st Century Places Fund: Package place-‐shaping investments in new framework. expanded mul=-‐dimensional state funding flows in targeted urban communi=es 4) “Real Cool Ci=es” leverage private investment with tax treatment incen=ve to push urban development projects across the economic feasibility line-‐ 20 year freeze of property taxes at the Taxable Value of the property preceding construc=on commencement 5) Repackage a 3.0 version of brownfield and historic preserva=on tax credit

Discussion: Public Good Investment Strategies Michigan Ideas: Urban -‐ CiOes Reform – InnovaOon – CreaOve Angle • 

Performance driven formula (locals embrace best prac=ce criteria including health/ pension and cost sharing—basically Snyder’s proposal)

• 

State is “gap-‐filler” for market/private sector driven investment ac=vi=es in defined urban core zone (Brookings -‐21st Century Places fund)

• 

Move to local/county-‐wide/consolidated public infrastructure funding in return for tax/ funding ability

Discussion: Public Good Investment Strategies Michigan Ideas: Urban -‐ CiOes Financing Mechanism •

State bond ini=a=ve for urban place-‐making-‐ (21st Century places fund)

•

County-‐wide new taxing authority

•

Local sales tax op=on (1% or similar)

•

Freeze/forgo property tax increase for new urban investment

•

New form of brownfield/historic tax credits

Discussion: Public Good Investment Strategies

Michigan Ideas: Infrastructure: Roads/Bridges/Transit/Air/Cyber

Investment Policy Idea 1)  Investment to fulfill Gov. Snyder’s Special Message target $1.5 billion 2)  Enhanced State Infrastructure Bank (SIB) (Brookings: like Ohio and Florida) created to provide addi=onal resources for leverage public private investments and fund strategic projects of city/state, economic development significance 3)  Regional/County op=on transporta=on/transit/mul=-‐model funding source (gas tax, vehicle registra=on) or public-‐private matching fund 4)  Tax all energy usage, gas/diesel at pump, electricity by coal (highest rate), natural gas (lower rate), all revenues dedicated to mul=-‐modal transporta=on, (bikes,transit, ports roads 5)  Change Transporta=on funding away from PA 51 road formula to strategic mul=-‐modal (transit, bikes, along with roads/bridges)

Discussion: Public Good Investment Strategies

Michigan Ideas: Infrastructure: Roads/Bridges/Transit/Air/Cyber

Reform – InnovaOon – CreaOve Angle • Performance-‐based criteria, projects determined by project’s economic merit and/or public private match criteria

• Local/County decision-‐making can be more strategic with tax dollars, while also more aurac=ve given local-‐controlled vs. state Financing Mechanism •  User fees, trucks, buses; tolls •  ‘Dirty energy tax’ (coal-‐burning, gas) to fund infrastructure, roads •  Vehicle registra=on fees other User fees; trucks/buses/tolls •  Raise/replace gas tax with different energy tax mix •  State bond ini=a=ve to fund state infrastructure bank •  County wide transporta=on fund; millage, sales tax •  State incen=ves to reward/encourage county-‐locals to consolidate transporta=on funding. E.g. reward with a streamlined approval process, and State Infrastructure Bank support

Discussion: Public Good Investment Strategies Michigan Ideas: Outdoors/Water/Parks/ConservaOon Pure Michigan Investment Policy Idea

1)  Pure Michigan Fund/Blue-‐Green Fund: more robust financing vehicle to support clean water, parks, greenways, blueways, conserva=on, tourism promo=on 2)  Enhanced User fees: Passport, fishing, boa=ng, hiking Reform – InnovaOon – CreaOve Angle • Make poten=al polluters “pay” (gas, mining) • Couple with redesign of parks system for the 21st Century user—(underway?) Financing Mechanism • User fees •  Severance tax on growth of extrac=ve industries, natural gas, oil, mining • Use/ leverage/add to exis=ng Natural Resources Trust Funds • Dedicated bond fund or sales tax increment – Michigan’s “Water/Outdoors Legacy Act” Like Minnesota’s

POLICY IDEAS TESTED IN FOCUS GROUPS

Michigan Promise Program

Fund 2-‐4 years of post-‐secondary educaOon for every Michigan high school graduate

No Worker Lec Behind Two years community college equivalent for every adult in the workplace

Michigan Merit Scholarship

College funding for high performing students

Michigan Corps

College funding in exchange for public service

Michigan College Fund Interest free loans for college

Stay in Michigan College Fund

Loan forgiveness for graduates who stay in Michigan

Keep our Colleges CompeOOve

Fund Michigan colleges to at least naOonal averages

STEM Scholarship Fund College scholarships to retain Michigan students Science, Technology, Engineering and Math

3rd FronOer InnovaOon Fund Funding for State University Research & InnovaOon Centers of Excellence

Vital Services Fund

Funding for Michigan ciOes to improve public safety and infrastructure (police, fire, roads, water)

st 21 -‐Century Places

Fund & Urban InnovaOon Districts

Funding for economy growing investments in key Michigan urban centers

Magnet CiOes

Public-‐private matching funds for urban development projects to keep and aXract talent

Sustainable CiOes Fund Funding for sustainable improvements to the urban environment (urban farming, city parks, bike paths, waste management)

Hatch Michigan Fund

Investment funding for Michigan Small Businesses and Entrepreneurs

State Infrastructure Bank

Public-‐Private Matching Funds for Strategic Development Projects

Science, Arts and Culture Fund

SupporOng science programs, libraries, arts and cultural insOtuOons

Mass Transit

Funding for strategic investments in mass transit

Upgrade Michigan Roads Funding for improvements to key roads and bridges

TransportaOon AlternaOves

Funding for bike-‐ and pedestrian-‐ friendly urban developments

Pure Michigan Fund

Funding to support clean water, parks, greenways, blueways, conservaOon, tourism promoOon

Outdoor Legacy Fund

Funding to protect Michigan’s fishing, hunOng, and recreaOonal resources

Brownfield/Historic PreservaOon Tax Credit

Tax credits for development of unused/abandoned industrial land and buildings

Michigan Resource InnovaOon Fund

Fund industries that build on Michigan’s unique environmental assets (e.g. clean water technology, agriculture, wind turbine technology)

FUNDING MECHANISMS

Progressive Income Tax

Tax rates linked to income levels

Sales Tax

Broader (including services), lower rate sales tax

Matching Funds

Funding shared by public, private, and philanthropic sources

Sin Tax

Taxes on alcohol, tobacco, and gambling

State Bond IniOaOve Funding through the sale of state-‐backed bonds

County-‐wide Taxing Authority

Grant counOes the authority to levy new taxes to fund core services (e.g. water, transportaOon, fire, safety) or criOcal new iniOaOves

Local Funding

Local sales, excise, or other taxes to fund local iniOaOves

Fuel Tax

Tax on gasoline and other fuel purchases

Vehicle RegistraOon Cost Increase

Enhanced Park/ Outdoor User Fees

Polluters Pay

Tax on high polluOon industries

NaOonal Resources Trust Fund

Use of exisOng Michigan Fund established from natural resources revenues

Tax on ExtracOve Industries

Charge fee to companies who extract resources from the state (e.g. natural gas, ore, etc.)

“Dirty Energy” Tax

Tax on all polluOng forms of fuel/energy (e.g. coal, oil and gas)