Chicago Sun-Times columnist Mark Brown is a Michigan tourism junkie who's been shooting the state's magnificent Pure Michigan campaign directly into his veins...

"You're driving to work in the morning while listening to the radio, or you've just plopped into your favorite chair to catch some TV at night, and, before you know it, you've been sucked into the Michigan trap," Brown wrote this month. "It starts with the gentle tinkle of piano music, strings playing softly underneath. Then the voice starts, soothing and friendly, familiar too, but you can't quite place it. By now, you don't even have to listen to the words to know what the commercial is saying. Come to Michigan, it purrs. The music and voice alone have triggered the desired Pavlovian response. Your eyes roll back in your head, visions of blue lakes, sandy beaches and sunsets overtake your thoughts as the full orchestra joins in."

Columns like that have rushed forth from the keyboards of travel writers across the land in the past couple years as Pure Michigan has captured the imaginations of the work-weary.

Funding for the Pure Michigan campaign is set to run out soon. A package of bills moving through the state House attempts to set a wise course of a more sustainable funding source, with a small portion of the sale tax collected by tourism businesses being directly reinvested in the state’s taxpayer-funded promotion campaigns.

Economic studies have shown that the state gets big returns in additional sales tax revenue for every dollar invested in tourism promotion.

So, if you head north, send a postcard to your legislator, urging a long-term, sustainable solution for funding the promotion of Michigan’s distinctive and competitive natural resources and tourism industry.

A couple images to get you in the mood. Click here for the latest Pure Michigan videos. And, finally, check out this monster brown trout caught this month on the Manistee River by Lance Weyeneth, a Gaylord-based real estate agent and angling consultant at Gates Au Sable Lodge in Grayling…

Speaking of big-picture thinking, Chris Rizik, one of Michigan's most experienced venture capitalists, is guest blogger on Metromode this week. Among his conclusions...

Over 10% of the jobs and 18% of the GDP in the United States today are in companies with venture capital origins, and an entire generation of technology companies, from Intel to Google, are trophies of the venture capital community. At a time when states are throwing literally hundreds of thousands of dollars in incentives for each job created in manufacturing, statistics show that significantly smaller investments in venture capital yield more and higher paying jobs and companies that pay more taxes to states than their “old economy” counterparts, all while delivering returns to venture capital investors that materially outperform the stock market... In the venture capital business it means creating a generation of trained entrepreneurial managers (CEOs, CFOs, marketing people, etc.), professional service providers (i.e., lawyers, HR professionals and accountants), university technology transfer specialists and investment and banking professionals, all of whom have the relevant experience in creating and quickly growing technology-based companies in a changing world. But most of all, it means transforming a low-risk culture – a culture that has resulted from two generations of insulation by the unparalleled success of our large, institutional businesses, where innovation and daring decisions are often suppressed or bogged down by bureaucracy. This is all a major challenge that will test our region’s real desire for and commitment to change."

Finally, how 'bout a big cheer for the next step toward a major, jobs-and-wealth-producing Aerotropolis for Metro Detroit. Nine governments finally and formally signed on this month....

"The next step in the process is help pass legislation setting up incentives to bring businesses to the area, most notably setting up Renaissance Zones eliminating most state and local business taxes," the Detroit News reported. "Ficano said the state still stands to gain from income taxes, estimated to be about $67 million a year for over 64,000 jobs. The nine local governments involved are Romulus, Taylor, Belleville, Van Buren Township, Huron Township, Ypsilanti, Ypsilanti Township, Wayne County and Washtenaw County."

The commission prepares to soon hit the road on a statewide listening tour to gather citizen reaction. Click here for a full outline of the reformers' proposals. Here's a quick summary of a few of their ideas:

1. Save $300 million in the state general fund by zeroing out community college funding and then re-funding the community colleges with the same amount taken from resources previously spent on K-12 schools. To achieve the schools savings, the commission recommends a retirement buyout for 10,000 schools employees, school district consolidation, and consideration of a state-run health care plan.

2. Eliminate or restructure the Promise Grant scholarship for college kids. (A recommendation the Senate is already seeking to enact.

3. A wide range of tightened eligibility, efficiencies, and program cuts to Medicaid.

4. Reductions in prison spending through "more nuanced approaches to sentencing, parole, and incarceration,"  cutting prison guard overtime in half, from $100 million to $50 million, and saving $250 million per year on prisoner health care (which may be very difficult given stringent federal oversight of prison health programs).

5. Provide revenue sharing to local governments only for specific services, rather than blind per capita allocations. But the commission would also grant local governments wider taxing authority.

6. A wide range of management suggestions to improve efficiency in purchasing, staffing levels, and contracting.

To keep tabs on the upcoming schedule of public meetings, go to http://council.legislature.mi.gov/lcge.html

There's no shortage of need for smart and brave political leaders in Michigan. And politically ambitious women, especially, have a great opportunity to get involved at all levels through The White House Project and its July 10-12 political leadership training boot camp in Saginaw.

"Michigan Go Run 2009 is a nonpartisan political leadership training for women throughout Michigan," White House Project Michigan coordinator Shannon Garrett wrote to us this week. " Go Run will inspire you to step into leadership.  Go Run will inform you about campaign work and demystify the political process.  Go Run will equip you with the skills it takes to run for elected office and win. Michigan Go Run 2009 is for women at every stage of political involvement – whether you plan to run this year, next year, in ten years or if you just want to get more civically involved, you’re invited to join the 2009 class of Michigan Go Run!"

The application deadline is July 6, so don't wait! Apply online at thewhitehouseproject.org.

So, it is sad to report that ongoing budget negotiations in Lansing are way out of step with the pre-K priorities so many citizens have expressed.

Judy Samuelson, CEO of the Early Childhood Investment Corporation, reported in a widely distributed email this week that a Senate proposal would result in "wiping out pre-K in Michigan for 30,471 4-year-olds."

"We understand that the state must have priorities and we understand that budget cuts are inescapable, but to balance the budget on the backs of children when most programs are taking 10 percent reductions, is just unacceptable," Samuelson wrote.

"Unacceptable" is a word rolling of the tongues of many individual interest group advocates in Lansing this spring as every budget ox gets gored.

The unrest is only going to intensify on all sides unless and until Michigan has a Governor, House Speaker, and Senate Majority Leader who can negotiate cooperatively and clearly outline not just the budget numbers, but the underlying strategy to the state budget. Right now, there is no clear strategy -- no clear priorities, other than to distribute cuts across all budget areas with the least possible pain to all interest groups.

"Metro Detroit was at the center of a $50 million Medicare fraud case unveiled Wednesday that netted arrests as far away as Miami and Denver," The Detroit News reported.  "In all, 53 defendants, including four doctors, either appeared Wednesday in federal court in Detroit or are expected to do so in the coming days. Six other defendants are fugitives believed to have fled the country, officials said. The huge case is really a collection of eight cases involving physical therapy and injection or infusion therapy clinics. A common thread is that patients received kickbacks for use of their Medicare numbers; the federal health care program for the aged and disabled was billed for services that were never provided; and the hefty spoils were shared among a group of clinic owners, doctors, recruiters and other co-conspirators, according to grand jury indictments unsealed Wednesday."

Medicaid health care for those in poverty accounts for more than a quarter of the state's general fund budget. State funds match federal funds to total some $9 billion a year to cover the health care for some 1.5 million Michigan residents. The Medicaid portion of the general fund is more than three times larger  than it was in 1980.

This week's story of Medicaid fraud reminds us of another scandal last summer in which the Michigan Auditor General found more than $200 million in improper and fraudulent child care payments for Michigan families on social assistance.

Gov. Granholm has made it her top priority to take care of Michigan's vulnerable populations during this deep recession. Budget hawks and reformers in Lansing are proposing significant, controversial and complex cuts to social programs, including tightened eligibility and tightened coverage options for Medicare.

The budget fights over social program cuts will be bitter. But so, too, is the reality that many other strategic priorities for Michigan's future -- like K-12 funding, higher education funding, and natural resources protection -- suffer as the Medicaid budget continues to grow.

When every budget penny counts, there is simply zero room for any tolerance of Medicaid and social program fraud. Imagine the other productive uses for the $50 million in Medicaid fraud alleged by the feds this week. Imagine the real needs of the poor that are going unmet today. Here's just one example... that wasted $50 million is enough to restore one-third of the proposed state Senate cuts to college scholarships, including scholarships for low income students.

Medicaid scammers rob more than the taxpayers. They rob the many low income residents working against long odds to rise out of poverty.

Ongoing budget negotiations include proposed cuts to the Auditor General. That's penny-wise and pound-foolish. Doubling the Auditor General's budget to $25 million is a better solution. More auditors could help assure that more of Michigan's precious state budget resources are used properly and efficiently.

Posted by Fellowship of the Rich.

Before they go to prison, before they drop out, many of them begin their downward spirals with school suspensions. And school suspensions in Michigan are disproportionately dispensed to African-American students, according an ACLU report this week called "Reclaiming Michigan's Throwaway Kids: Students Trapped in the School-to-Prison-Pipeline."

In Ann Arbor, for example, 18 percent of public school students are African-American, but they receive 58 percent of the suspensions. In Clintondale, African-Americans account for 45 percent of the students and 80 percent of the suspensions.

A key solution, the ACLU argues, is to reinvent alternative education programs so they are not "dumping grounds" for troubled students.

Another solution to the prison problem is to assure parolees have at least a fighting chance to lead productive lives once their sentences are complete. Researchers at Michigan State University are working to help companies understand how best to employ ex-prisoners and limit potential liability in doing so.

MSU assistant professor Stacy Hickox explains...

Employers are often reluctant to hire applicants with a criminal record because of potential liability for negligent hiring and performance issues.  But through Michigan Works! and other agencies associated with the Michigan Prisoner Reentry Initiative (MPRI), some employers are willing to hire ex-offenders.  Why do they do it?  How do they address liability and performance concerns?  The Michigan State University School of Labor & Industrial Relations (SLIR) is conducting research to find out.

Faculty at SLIR are collecting data from employment agencies and employers in Michigan to assess the factors that employers consider in deciding to hire ex-offenders. This information will then be distributed to agencies which assist ex-offenders as well as employers in Michigan.

Numerous studies have shown that employment after release from prison greatly reduces the chances that an ex-offender will commit another crime.  This SLIR study will help employers and work placement agencies make better informed, more justifiable hiring decisions regarding ex-offenders, and is expected to promote the hiring of ex-offenders in Michigan.   The study may also provide valuable information to Michigan Department of Corrections and the MPRI programs on how to better prepare inmates for employment upon release.

The study will also discuss legislation passed in other states which limits the reliance of employers on criminal convictions when making hiring decisions.  Several states, including Wisconsin and New York, prohibit the consideration of a criminal conviction in a hiring decision unless that conviction is related to the applicant’s qualification for the position being filled.  Just recently, Minnesota passed “ban the box” legislation which prohibits a question about criminal convictions on public employers’ applications.  The study will also discuss the ways in which employers can avoid potential liability for hiring employees who then cause harm to coworkers or others, under the doctrine of negligent hiring.  For a short discussion about potential liability for negligent hiring, visit the SLIR web site at http://www.lir.msu.edu/hretc/hrlr/documents/Avoiding_Liability_for_Hiring_Dangerous_ Employees.pdf.

Employers should benefit from the information produced by this study because it will identify ways for employers to hire ex-offenders while still minimizing the potential risks of doing so.  This work is important given the potential adverse impact on people of color resulting from employer policies that totally screen out ex-offenders who apply.  Because of this impact, the Equal Employment Opportunity Commission (EEOC) is currently creating new guidelines on this topic.

If you would like to participate in SLIR’s research or receive the results of the study, please contact Assistant Professor Stacy Hickox at hickoxs@msu.edu.

"It’s not enough to just say, a la Howard Beale, 'we’re mad as hell and we’re not going to take it any more.' There has to be a better plan, too. And for the moment, no one seems to be doing as much as the Center to develop one. This is the sort of grass rootsy movement that can make the political establishment very nervous...And that’s a good thing... If you attend one of these conversations, you’ll have a chance to say what kind of place you want Michigan to be, and how we can fire up a more diverse economy yet preserve the natural qualities that make the state attractive. (One idea gaining traction in conversations so far is a major promotion of this state as the “north coast,” a freshwater option to the crowded East Coast, unstable West Coast and hurricane-prone Gulf Coast.)...You’ll get to vote on priorities and when the Center finishes all its meetings and runs a final tally for a report next year, you’ll know somebody, somewhere was listening. I believe all these voices will be hard to ignore.

You can join the conversation today. Five thousand people have participated so far. Five thousand more will participate in the next several months.  To convene, or participate in, a community conversation in your area, just drop us a line at  info@thecenterformichigan.net or call 734-769-4625.

Despite the one-time gift of federal stimulus money, the House and Senate remain at least $300 million apart on their separate budget approaches.

The state begins its 2009-10 budget in October. The Center for Michigan has tracked the budget proposals for 2009-10 since February. As of early this month, even with the one-time gift of huge federal stimulus dollars, the House and Senate are at least $300 million apart on their approaches for how to spend the general fund -- the main discretionary purse for the state.

Click here for an at-a-glance summary of the proposals since February.

Quick takeaways:

1. SLASH AND BURN. The House has set a target to slash 7 percent and the Senate 10 percent from the budget first proposed by Gov. Jennifer Granholm in February.

2. THE COST OF POVERTY. Under any proposed scenario, the combined cost of social programs, prisons, courts, and state police account for at least two-thirds of general fund spending.

3. LAW AND ORDER. As a percentage of overall planned spending, the costs of courts, prisons, and state police have remained whole since the original proposal in February.

4. MIXED SIGNALS ON EDUCATION. At the national economic summit in Detroit this week, the governor talked for the umpteenth time about the importance of improving Michigan's proportion of college graduates. But the latest legislative budgets would slash $90 million or more from colleges and universities -- with some of those cuts coming in college scholarships. But funding for community colleges has so far remained whole at roughly $300 million.

5. WHERE'S THE STRATEGY? As we and many others have pointed out since the 2007 budget debacle, there is no clearly delineated strategy in the state budget. What are we, as a people, trying to accomplish with this budget? So far, the budget negotiations have been a painful and tortured attempt to limit bleeding and preserve many status quo functions if not their traditional funding.

Business groups are huddling to develop sweeping tax reform changes, including possible cuts to the much-maligned Michigan Business Tax surcharge.

Number crunchers are looking at everything from a graduated income tax to fresh discussion of extending the sales tax to some services.

And bipartisan groups of legislators are sharpening their knives in an attempt to do surgery on some $35 billion in tax breaks Michigan doles out every year. For a thick list of the dozens of annual types of tax breaks -- from affordable housing development credits, to tax-free pensions, to business development tax credits, to credits for small beer brewers -- click here.

The tax reform options are dizzying, but Tim Bartik, a leading economist at the Upjohn Institute, makes it easy to understand. Bartik, in testimony before the state House this week, outlined five ways to build a better tax system in Michigan:

1. A broader sales tax including services. This would be fairer and grow more proportionately with the growing sectors of the economy. Such a broader sales tax would resemble the so-called “Fair Tax.” However, I don’t think that the rates or broad design proposed by the Fair Tax are feasible, and I believe that the revenues projected are overstated. Therefore, I do not think that the Fair Tax should be seen as a tax that can feasibly substitute for most other state taxes.

2. A more progressive income tax system. More progressivity in the income tax system would help long-run revenue adequacy, and would move the overall Michigan tax system towards being less regressive. A progressive income tax would seem to require a constitutional amendment. However, it may be possible to increase the progressivity of Michigan’s income tax system by increasing the tax rate and introducing additional broader earned income credits and sales tax credits.

3. Elimination of the pension exemption. If this cannot be done, at least the exemption level should be frozen in nominal dollars; that is, not indexing the exemption level to consumer prices. This would reduce the long-run threat of the pension exemption to revenue adequacy. It also is fairer in taxing all incomes regardless of source.

4. A regular review of tax expenditures to keep them within a budget constraint.

5. Focusing on making the business tax system more business friendly by focusing business tax relief on businesses making investments or businesses expanding employment.

Gov. Jennifer Granholm and honorable members of the Michigan Legislature,

We support you and the Michigan Department of Corrections on making the difficult decisions to close three prisons and five camps this year.

This is an important step that will save the state millions of dollars and contribute to getting the state's financial house in order.

It is important to note that those who would be released through the prison closure strategy are already eligible for parole. The prison closures will cause layoffs and may place added burdens on local communities as paroles return home in a very challenging economy. These are regrettable tradeoffs, but the state’s dire fiscal condition requires sweeping corrections system reform.  At the same time, the state must do all it can, through the Michigan Prisoner ReEntry Program, to assure smooth and productive transitions for parolees returning to society.

The announced prison closures quickly provoked criticism.  Critics, however, must face the reality of the worst budgetary crisis in memory.  Those who would argue for no accelerated paroles, no significant cuts to prison spending, or no further staffing and operations efficiencies have an obligation to explain to the public: 1) Which other state budget priorities they would sacrifice to keep whole the status quo corrections system; 2) What other cost-savings measures they would adopt to cut the corrections budget; or, 3) Which taxes they would raise to keep whole the status quo corrections system?

We're pleased the Department of Corrections is taking steps toward reform. But our message to the department, the governor, and the Legislature is "keep going."

With the reality of a budget deficit approaching $2 billion, much more must be done to bring the cost of prisons in line with state resources. Last December, we called for "long-term, sustainable reforms and cost savings in the hundreds of millions of dollars per year" and noted that growth in state spending on corrections threatens to crowd out important strategic priorities for Michigan.  We noted that state leaders could choose among hundreds of millions of dollars worth of additional well-documented reform approaches to address both Michigan sentencing guidelines and prison operations. We believe larger-scale, money-saving reforms can, and must, be achieved without compromising public safety.

"Windmill Island" was posted by Fellowship of the Rich

Sponsored by The Center for Michigan to develop a "common ground agenda for Michigan's transformation," participants heard that the state faces enormous challenges demanding far-reaching solutions and decisions that will go a long way toward determining state history for the next half century.

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By Chris Andrews

A small city like Wyoming could never afford its own cold case team or a unit to go after identity thieves – but it can through a partnership with the Kent County Sheriff's Department and six city police departments. The cities have also formed the InterUrban Transportation Partnership, boosting public transportation ridership by about 840,000 annually over the past two years. And they work together on hazardous materials planning, firefighter training and stormwater management, to name a few of the more than 100 service-sharing agreements.

"We believe we have tackled just about everything we can tackle," says Curtis Holt, the Wyoming city manager.

In Macomb County, Utica Mayor Jacqueline Noonan is constantly looking for opportunities to cooperate with neighbors. The city shares senior transportation services with Shelby Township and borrows Sterling Heights police officers for its anti-drug DARE program. When a Utica resident donated money to start a canine unit, Sterling Heights trained the dog and officer at no charge.

Across Michigan, cities, townships and villages have been looking, with various degrees of urgency, toward cooperation, collaboration and consolidations for years. But with money tighter than ever – thanks to years of state revenue-sharing cuts, and, more recently, plummeting property tax revenues – there is a growing belief that local governments need more forceful prodding.

The Michigan Legislative Commission on Government Efficiency is expected to recommend major changes in how revenue-sharing money is distributed by the state to local units of government in hopes of accelerating the pace of service-sharing. Its idea: Allocate money for a handful of key services, rather than simply pass it on to cities, townships and villages to use as they please. Units that don't provide the service, or don't meet state-set standards, would lose out.

"Revenue-sharing that is driven just by population does not work to enhance local government efficiency or consolidation of services," said James Curran, co-chair of the commission.

The commission was appointed in February 2008 by House Speaker Andy Dillon, D-Redford, and Senate Majority Leader Mike Bishop, R-Rochester. Its charge is to find ways to make state government more efficient. The commission is looking not only at what the state does, but what it funds, such as revenue-sharing. The commission's report is due by Oct. 1.

Michigan's cities, townships and villages have relied on state revenue-sharing as a key source of funding since the 1930s. Some of the money is constitutionally guaranteed; the rest depends on annual appropriations from the Legislature. Over the past decade, the latter part, along with money for universities, has been easy pickings for state lawmakers in the budget-cutting process. Statutory revenue-sharing funds have been slashed from $800 million to $472 million since 1999.

A commission work group is advocating a constitutional amendment (requiring voter approval) that would put all the money in a constitutionally guaranteed pot, to be used to pay for a specific set of core services, such as police and fire, sewer and water. It would be up to the Legislature to determine the services and set standards local governments would need to meet to receive revenue-sharing funds.

Curran said such a plan – along with grants promoting innovation -- would push local governments to work together more often and give taxpayers more bang for their buck.

Cooperation today

Michigan’s system of local government includes 83 counties, 1,242 townships, 274 cities, and 259 villages, according to the 2007-08 Michigan Manual. Local control has long been a core value in Michigan, and officials in those jurisdictions have a wide degree of latitude in deciding whether to form intergovernmental partnerships or go it alone.

There is already a significant amount of cooperation taking place, particularly in areas such as fire protection, water and sewer, said Eric Lupher, who has studied the issue for the Citizens Research Council of Michigan.

But while many fire departments have worked out mutual aid pacts, or other cooperative ventures, there are still far too many fire departments, which has expensive consequences because of high capital costs, advocates of regionalism argue. Lupher says the ideal size for a fire protection unit is greater than most cities, but smaller than a county.

There are other areas ripe for cooperation as well, Lupher says. Local governments may not improve efficiency by combining residential assessors but could benefit from sharing commercial assessors who need greater technical skills to work with more complex projects. Police departments won’t necessarily save on road patrols but can provide better services through combined crime labs. "Certainly, there is room for greater efficiencies, I don't think anyone would dispute that," he said.

Summer Minnick, director of state affairs for the Michigan Municipal League, supports the idea of focusing revenue-sharing money on services. She says the approach would be both more fair and more effective in attracting people to the state.

Where people sleep isn't necessarily where they are spending the day, she said. Cities such as Grand Rapids and Royal Oak, she said, have substantial infrastructure costs but are the types of vibrant communities Michigan needs to attract businesses and people. "We should be investing the money that we have in areas that we know we can redevelop to attract people back to Michigan," Minnick said.

And some see another benefit to tying revenue-sharing to specific services. It might make it harder for lawmakers to cut. Slashing money for police or fire protection could be far more dangerous to politicians than reducing the more amorphous revenue-sharing.

"Right now, your state legislators stand out there and say they're going to cut revenue sharing. They are not taking responsibility, there is no accountability for what that does," said Wyoming city manager Holt. Since 70 percent of the city budget goes for police and fire, he says, "It doesn't matter if it is dedicated or not. If I've got to cut, it’s got to go to police and fire."

Not everyone’s on board

But others are concerned that changing how revenue-sharing is distributed will have another consequence – perhaps a hidden agenda – of shifting money from rural to urban areas. And they don’t buy that bigger means better, or more efficient, when it comes to providing services.

Cities, townships and villages are only required by law to provide three services – tax collections, property assessing, and elections administration, says David Bertram, legislative liaison for the Michigan Townships Association. Many townships don’t provide water, for instance, and could lose out if lawmakers were to designate that as one of the services.

"If they're talking about trying to require a certain number of services in order to apply for or be eligible for revenue-sharing, that's pulling the rug out from under a lot of people," he said.

In addition, he said, most townships rely on on-call fire departments that may not be well suited to consolidation, especially if the population centers of the townships are located far from each other. And there are financial obstacles. One community might pay $50 for a fire run, another $125. "How do we settle that? Well, the lower always comes up. It never goes in the opposite direction," Bertram said.

Brian Baker, finance and budget director in Sterling Heights, said his Macomb County city is progressive in sharing services and in benchmarking to compare what it offers with other cities in Michigan and around the country. "I don't think we need the added incentive, because we are already doing these things," he said.

But to Baker, the devil is in the details, in how far state government might go to push local governments to cooperate or consolidate. "There's a fine line between Big Brother, a fine line between defining what you think is most efficient and allowing communities to do what they want to do," he said. "In a democracy, who's to say you don't have the right to do that?"

Encouraging innovation

The Legislative Commission on Government Efficiency is also expected to recommend the state set aside a pot of money to award grants to local governments to plan or implement cooperative agreements.

"That's wonderful because that’s exactly what I asked the governor directly. I called her office and asked if there were any grants available for feasibility studies," said Noonan, who has been mayor of Utica for 22 years. "The city of Utica doesn't have one extra dime available."

The grants would be awarded by a new Intergovernmental Advisory Office that would set standards, share best practices and identify barriers to efficiency and cooperation.

Other states have similar efforts under way:

New Jersey created the SHARE (Share Available Resources Efficiently) program in 2005 and has awarded 170 grants to local governments and non-profit agencies totaling $10 million. Its grants have underwritten cooperative efforts in municipal courts, police, trash collection, sanitary sewer, emergency dispatch, fire and public works.

New York established the Shared Municipal Services Incentive grant program in 2005. Funds have been awarded for such things as village dissolutions, consolidation of police services and the development of joint water and waste water infrastructure. State officials say the projects have saved $8 for every $1 spent on grants.

Maine created the Fund for the Efficient Delivery of Local and Regional Services in 2005, although grants were suspended in 2008 to address budget shortfalls. Grants have been awarded in the past to consolidate emergency communication services, expand a regional recycling center, combine municipal accounting systems and study police and fire consolidation.

No silver bullet

Even advocates of intergovernmental cooperation say a shift to revenue-sharing distribution won't be sufficient to maximize intergovernmental cooperation. They say action is needed to change state laws that have created barriers to regional efforts.

The Urban Cooperation Act requires that when local units of government combine services, none of the employees can be hurt in the move. The result: pay and benefits go up, increasing costs to taxpayers.

Noonan says the entire tax structure needs to be overhauled. "It's a model that simply doesn't work."

But Curran says the revenue-sharing change – as part of a broader plan – is at least one tool for increasing government efficiency.

"When revenue-sharing just comes, then you just make do with what you have rather than attempting to figure out how to live with less," he said. "There needs to be some driver behind it. Unrestricted revenue-sharing just doesn't appear to do it."

"Your article -- 'Out of the Shadow of the Ren Cen' -- was timely and provided others with additional reasons for optimism," wrote Automation Alley's Ken Rogers. "At Automation Alley we close every speech and presentation with comments about the reasons for optimism and hope. We will now include the information in the article on areas for growth into our presentations and speeches."

But if you didn't believe us, maybe you'll believe Standard & Poor's. The bond rating agency gave Michigan high marks this week, in part because of "an economic base that is diversifying."

Among those diversification efforts is the $10 million, foundation-driven effort to seed 400 new companies and entrepreneurial ventures in Detroit's Tech Town.

Finally, this morning the New York Times offered up a somewhat hard-bitten but kindly titled tale of Michigan's uncomfortable transformation: "Michigan Works to Remake Itself Without King Auto."

We like that phrase "works to remake."

Image is everything and for once the New York-centric know-it-alls aren't bashing us.

The prison guard union is furious at the prospect of losing hundreds of jobs. Rural communities like Standish and several in the Upper Peninsula are furious at the loss of jobs (so are the state legislators representing those areas).

And a few grand-standing politicians are stopping just short of predicting the end of civilization as we know it because the closures require the release of 3,500 prisoners who just so happen to already be past their dates of eligible parole.

There are two blunt questions for those who would oppose change and reform in a prison system which has grown exponentially in the past 30 years to the point where it overshadows every other public priority in the state general fund budget:

1. If you are unwilling to accept prison closures, what other public priorities -- community colleges and universities? Local governments? State police? State parks? Hunting, fishing and natural resource protection? -- would you take from in order to continue to fund the status quo in prisons?

2. If you wouldn't take from those other priorities, which taxes would you raise to fund the status quo in prisons?

Faced with an ongoing state budget deficit of more than a billion dollars, Michigan must come to grips with reality and make hard choices about its public purse priorities. Even after this month's painful prison closures and the unfortunate job losses, more must be done.

Payroll costs account for three-fourths of Michigan prison spending.

Those prison payroll costs have increased in the past several years even as staffing levels have decreased.

The average Corrections Department salary in Michigan is 20 percent higher than the average of other Great Lakes states, according to the Citizens Research Council.

In reality, there is still much more the Corrections Department can do to streamline operations, including handling medically infirm prisoners in more cost-effective out-of-prison care centers, turn over hundreds of potential deportees (and their costs) to the federal government, privatize some operations like food service and reform arcane and costly prison guard work rules.

The political resistance to change this week was bipartisan. But so were some forward-looking, problem-solving messages from legislators.

Republican Law-and-order Senator Alan Cropsey was among the most strident in his opposition to further prison closures. But he also rightly pressured the governor to focus "on having prisons run more efficiently."

Democratic Senator Liz Brater echoed a coalition of business, nonprofit, education and local government groups -- including the Center for Michigan -- which have pushed for hundreds fo millions of dollars in prison budget cuts: "We've been spending far too large a proportion of our general fund on corrections."

Republican Representative John Proos urged additional bipartisanship "to find additional efficiencies that would put us in line with per-prisoner costs in other states."

Finally, Democratic Representative Alma Wheeler-Smith didn't blink in discussing the "outliers that are going to cause headlines" -- a statistically insignificant number of parolees who will no doubt commit new and horrible crimes and who will bring media scorn and threaten to erode political will to further reform the prison system.

Michigan's future strategy and and vision is increasingly focused by academics and common citizens alike.

John Austin, the Michigan State Board of Education vice president and Brookings Institution fellow, lays out a clear vision in a paper this month for the Chicago Council on Global Affairs. Austin's vision includes leveraging the engineering side of Michigan's car culture and our breadth and depth of university resources to help innovate in such areas future-oriented manufacturing, health care technology, biosciences, and environmentally friendly transportation. Likewise, Austin sees Michigan leveraging our natural beauty and water resources to attract long-term business growth.

Combine Austin's thoughts with citizen calls for intensified education and a redefinition of Michigan's public sector, and you pretty much match the recipe some 5,000 Michigan residents have conjured so far in the Michigan's Defining Moment Public Engagement Campaign.

Execution is the bigger problem. Crain's Detroit Business this week outlines five years of cogent reform proposals that have crashed on the rocky shoals of gridlock in Lansing.

"Michigan has plenty of reports showing what needs to be done," Crain's concluded. "We just don't have leaders with the political will to do the job."

It's why we have for two years referred to 2010 as "Michigan's Defining Moment." We elect a new governor. We elect dozens of new legislators who will, in turn, elect new leaders in both chambers in the state capitol. We own this problem. And, we've got to get it right next year. No matter the party, we, as citizens, have to focus the candidates on key issues -- educational attainment and affordability, economic diversification and business climate, and the scope and funding options for the public sector -- that citizens are defining every week in Community Conversations across Michigan.

Lt. Governor John Cherry told me he's set up a commission to look at the entire function and structure of state government. Although it's yet not clear who’s on the commission or when it will issue a final report, Cherry obviously is thinking big:

"The organization of Michigan's government was set more than 50 years ago. Any car that’s 50 years old isn’t up to date, and neither is Michigan's government."

Amen to that. In the meantime, there is serious talk about a much-needed, entirely new approach to Michigan's tax structure. The Michigan Business Tax was adopted soon before the jury-rigged budget deal in 2007, but the MBT was soon being severely criticized as just as complex, clunky, and hard to understand as the Single Business Tax it replaced. Whatever remaining good it might have done was then erased by the 20 percent surcharge that was slapped on top of it, as a last-minute move to balance the budget.

That outraged much of the business community, rightfully so. It's now clear to everyone that Michigan's tax structure is unsustainable the way it is. It’s also very unfair to certain kinds of businesses, many of which have seen their tax bill double or triple. And it certainly does not pass the "certainty test."

All businesses have one thing in common: The need to be able to reliably estimate their certain costs, as far as possible. When the legislature constantly changes the tax structure, businesses are bound to find this continued uncertainty about taxes unacceptable. Some may well "vote with their feet," by moving out of state.

Now there are loud calls for wholesale tax reform. The question is, how to do that? Maybe we need a constitutional amendment establishing a graduated income tax, which might be nice if some legislative geniuses could figure out a way to keep wealthy people from moving out of the state upon enactment. Maybe it's broadening the sales tax base to include services and reducing the 6 percent rate.

Whatever the solution, House Speaker Andy Dillon (D-Redford) has been talking for months about putting something "far-reaching" on the ballot next year. Whatever that something is, lawmakers need to keep in mind that there are two vitally important parts to any fair-minded plan for tax and budget reforms.

First, they must result in getting our financial house in order. For the past seven years, Michigan's General Fund budget has suffered from a chronic structural imbalance of more than $1 billion. For the past seven years, both political parties have been wholly complicit in resorting to short-term gimmicks to plug the whole, most recently using close to $ 1 billion in federal stimulus money that should have been invested for longer-term purposes.

Second, regardless of what we do, we must bring what the state takes in into alignment with what it spends, whether by reducing spending and costs, increasing revenues, or both.

But while getting our financial house in order is necessary for our future financial prosperity, it is not sufficient. Wars aren't won by brilliant evacuations. Quite simply, we must develop a long-term proactive strategy for the survival and prosperity of Michigan, and then tailor both taxing and spending to that strategy.

To understand why, look at any company. To survive, it may be necessary to cut costs. But merely cutting costs will not make a company thrive. To do that, it needs to identify its competitive assets, invest in them, and arrive at a strategy that uses those assets to bring new products to market and increase profitability.

For Michigan to prosper, it's vital that we identify our durable, distinctive competitive resources, and invest in them in a way that fits an agreed-upon, overall competitive strategy.

Time after time, Michigan citizens have told us at the Center for Michigan that our assets include our magnificent environment of woods and waters, and the quality of life it’s possible to lead in our great state. They also focus on the institutions that invest in our stock of human capital: Our great universities and our schools.

But with this well-known, what have our leaders been doing? Nothing that makes any sense. They misallocate our resources. Michigan leads the nation in cutting support for higher education. We now spend more on warehousing felons in our state’s prisons than on public colleges and universities. We slash spending for the Department of Natural Resources and close parks.

Now, we are trying to eliminate the pittance we spend on arts and culture and on support for livable, exciting communities.

The problem is not that we spend too much, if we do. The problem is that we don't have a vision. There is a wholesale disconnect between what we are doing and what we should be doing -- if we had a tough-minded competitive strategy aimed at the future.

Big plans to change the structure of government and big talk about making big changes in our tax structure aren‘t enough. You can't get anywhere if you don't know where you are trying to go.

What we need to do instead is to start by working out what our competitive strategy ought to be. Once we agree on that, we need to tailor our taxing and spending practices into an alignment with an investment strategy that makes the most of Michigan’s assets.

The Center for Michigan has been holding community conversations around the state for the past 18 months. Those discussions have been calling forth a shared vision for our state's competitive future and calling for action plans to achieve it.

Rather than listen to the narrow claims of innumerable special interests, a strategy that has helped drive us into our current ditch, leaders in Lansing would do much better to listen to the emerging common ground agenda our citizens have for Michigan’s future.

While you're holding your breath waiting for true regional cooperation among Southeast Michigan's political leaders, hearings start next Monday on another concept for high-speed rail from Detroit to Lansing. If you have the time and interest, check out the plan on June 15 at the Kellogg Center in East Lansing.

A new book by Michelle Miller-Adams, an assistant professor of political science at Grand Valley State University, provides the most detailed look yet of how the Promise came to be, how the community is reacting, and it's overall prospects for long-term success.

By the broadest measures, the Promise is, indeed working, according to Miller-Adams' work, titled "The Power of a Promise."

Kalamazoo Public Schools have seen double-digit enrollment increases. Homeowners have used the leverage of the promise to boost their sales prospects. Employers have pointed to the Promise as an excellent quality of life measure.

But the true genius in the Promise is how it has required many community stakeholders to work together to deal with educational attainment gaps and the reality that many students are not prepared to succeed in college and thus not prepared to leverage the promise of the Promise. Miller-Adams' research reveals that those stakeholders continue to struggle and adjust to the enormity of the gift and the responsibility that comes with it.

"The money itself is not enough," Miller-Adams recently told Michigan Public Radio. "The scholarship program is a catalyst for a host of others to align their activities."

You can buy the book through the W.E. Upjohn Institute.

"Dinner Time" was posted by Mike Hainstock.

Really. Even in the face of the the GM and Chrysler bankruptcies that punctuate the most unsettling business cycle in Michigan since the Great Depression.

Brand new economic data released by the federal government this week showed Michigan's total economy declined faster than every state in the union except Florida in 2008.

Still, it's not as bad as you think it is.

The U.S. Bureau of Economic Analysis data on state gross product contains a number of eye-opening signs of diversification and growth in Michigan.

Really.

Michigan's economy achieved its recent peak in 2003, when the total value of all goods and services produced here was $341.1 billion. After adjusting for inflation, how much do you think the state economy has declined since then? 10 percent? 20 percent? 30 percent?

Actually, inflation-adjusted gross state product in Michigan in 2008 was still $326.1 billion -- four percent off that peak in 2003.

Sure, our traditional industries took a dive from 2003-2008. Construction was off 40 percent. Manufacturing was down 15 percent.

But other industries have seen impressive growth.

Really.

Examples:

Details by industry...

Are these numbers going to get worse in 2009 because of the breathtaking decline of the auto sector? Absolutely.

Does the constant drumbeat of Motor City decline, echoing daily in the local and national media, accurately reflect the diversity and transformation underway in the Michigan economy? Absolutely not.

1. 50 Michigan Companies to Watch. This year's list of fast-growing Michigan entrepreneurs includes such firms as A & M Aquatics (a saltwater livestock wholesaler in Lansing), Burkard Industries (an old-line manufacturer in Macomb County that has trandformed into an industrial coatings supplier for the military), and Threefold Sensors (an Ann Arbor medical testing equipment firm that expects to more than double the size of its workforce this year. Altogether, this year's "Michigan 50" earned $405 million in revenue in 2008 (a 30 percent increase over 2007) and employ more than 1,500 people.

2. Michigan's Life Sciences Industry. This high-tech industry now includes 80,000 Michigan workers. Employment in this sector is up 10 percent in the past decade and wages are up nearly 30 percent.

3. Cherries, soybeans and grains. Michigan agriculture exports grew by 48 percent from 2003 to 2007.

4. The hearty Upper Peninsula. Outdoor Life Magazine just named Marquette the second best town in America for sportsmen. And with a thriving university culture and several strong high-tech employers, the region has an unemployment rate lower than the state average.

5. Mars Advertising. While numerous top advertising firms are caught up in the auto bankruptcies, Mars indeed seems like it's in outer space. "That's because Mars (based in Southfield and founded in 1973) specializes in one of the very few growing ad segments: in-store marketing that targets consumers already in the buying mode," Crain's wrote this week. "Mars conducts advertising and marketing campaigns inside stores such as Wal-Mart, Art Van, Sears and Best Buy, and does work for brands that include Little Caesars Pizza, Coca-Cola and Mattel."

6. Innovation Michigan finalists. More than two dozen additional examples of entrepreneurialism at work across the state.

Late in 2008, Michigan Gov. Jennifer Granholm came to Western Michigan University's Business
Technology and Research Park (BTR). The occasion was to celebrate the opening of a new corporate headquarters for Kalexsyn, one of the startups that had outgrown the incubator and was now opening its own 20,000-square-foot facility.

Granholm held up this development as a prime example of what can happen when skilled entrepreneurs and key resources come together even in trying economic times. "This is an example of how Michigan can rise from extremely challenging economic circumstances," Granholm said, adding, "It is time for this state to get to drink a bit of the Kalamazoo water."

Among the partners that were crucial to this success story was WMU’s Biosciences Research and Commercialization Center, which provided funding and equipment funneled through the University. As a result, in four short years, the firm had gone from a startup run by two former Pfizer scientists to a company with 24 employees and annual sales of nearly $3 million.

"Kalexsyn – a medicinal chemistry research firm – has built their own facility and they are paying for it," says Bob Miller, associate vice president for Community Outreach and WMU's point person on the development of the BTR Park. "They've been on site a year and a half already. Kalexsyn is an example of the kind of growth being fostered at the BTR Park through Southwest Michigan First and its Innovation Center and the Biosciences Research and Commercialization Center.

"The categories of the companies we’ve attracted fall into the three legs of the economic stool," Miller notes. "We recruit companies, retain companies and create companies. Our first company in the Park was Thermo Fisher Scientific, formerly Richard Allen Scientific. A world leader in the field of anatomical pathology, the company started out with a little over 100 employees but now has over 200. They are a great example of a company located in Kalamazoo that made the decision to stay, an example of a retention success story.” Pointing to a recruiting success story, Miller adds, "Emilien, a developer of oncology therapeutics recruited from California, is now located in the Southwest Michigan Innovation Center in the BTR Park."

According to Cheryl Rowland, executive director of University Relations at WMU, "The BTR’s 'SmartZone' is recognized as the state's most successful because of its ability to retain and redirect Kalamazoo's significant population of life sciences commercialization specialists in a public research university atmosphere." Asked to elaborate on this point, Miller explains, "The SmartZone initiative launched was able to grow much faster any other SmartZone in the state. SmartZone is a initiative of the Michigan Economic Development Corporation, developed within a municipality with a university to retain and recruit technology companies, featuring legislated tax policies that benefit the SmartZone with a percentage of those taxes used for marketing, roads, infrastructure and paid for by BTR. A more accurate depiction – a great illustration of company creation – would be that we were successful with our Stick Around Campaign, an initiative launched by Southwest Michigan First with support from WMU that targeted people who were transitioning out of Pfizer. Kalexsyn, for example. Essentially what we said was, if you want to start a business we have resources that can help you, with access to capital, expertise and facilities."

Speaking of capital, President and CEO Steward Sandstrom of the Kalamazoo Regional Chamber of Commerce, notes, "We are working with WMU to see if there are research dollars in the current Federal stimulus package that can be used in partnership with professionals at the Park." As part of their mission to provide a hospitable climate for businesses, Sandstrom says, "Last year we helped pass a piece of legislation that caused energy prices to go down for commercial entities, including businesses in the BTR Park. This year a top priority will be to address the MBT surcharge. If successful, businesses will see a 22 percent reduction in their taxes." Ongoing initiatives include retention and recruitment programs, including relocation packages.

In all, this success story is about economic development and job creation in the BTR Park: direct creation of more than 645 jobs with $25 million in annual payrolls, indirect creation of 682 jobs with $23 million in indirect salary creation, for a total of more than 1,300 jobs, with annual revenue coming to $182 million for BTR businesses.

Governor Granholm is on to something when she talks about that "Kalamazoo water."

1. Testify on the need for reforms. A special legislative commission will tour the state in coming months, gathering input on recommendations to shave hundreds of millions of dollars in state budget spending. (Hint: The Center's issue guide can serve as your talking points.) We will publish hearing dates as soon as they are made available.

2. Run for office. The White House project, a nonprofit organization dedicated to electing more women to public office, regularly holds Michgan bootcamps for interested prospects.

3. Host a Community Conversation. The Center for Michigan is halfway to our goal of 10,000 participants in small, town hall meetings to develop a common ground agenda for the 2010 statewide elections. We're now holding a half-dozen meetings per week throughout every corner of the state. Join in today!

It is no secret that Southeast Michigan needs a better public transportation system. Dozens of states and cities have modern transit systems, because they know that transit pays off.

Thoughtful planning for an investment in transit is both a path to, and a requirement for, strengthening Michigan’s economic competitiveness in the 21st century. Demand for transit has never been greater. In the last six years transit use has risen 22 percent. The economic argument for public transportation is well known. Brooks Patterson made the case publicly not long ago: public transportation in Michigan is a $560 million industry and it's growing. Its potential, if planned right and supported wisely, is immense. Different studies peg the return on investment at anywhere from $3-$10 dollars for every dollar spent. Michigan's current investment brings back approximately $3.5 billion in economic benefit, which is more than we put in.

77 percent of new economy companies rate public transportation as "very important" when deciding where to locate and the young people we want to work there expect it. And transit saves money. A recent national survey shows that households that use transit daily save over $8,400 each year compared to a household with no access to public transportation.

The good news is that transit is being planned for Southeast Michigan. The M1 Rail – from New Center to Jefferson – will begin construction soon. The privately funded 'public' project will connect to the Detroit/Airport/Ann Arbor commuter rail line that's ready for rail cars. John Hertel, on behalf of the Big Four, has planned a regional system for SE Michigan that will greatly upgrade existing service while we plan for three rapid transit lines. The bad news is that although transit is being planned by good people it's being done piecemeal by agencies that have limited authority, are stretched to their limits and have restricted access to funds. This approach does not maximize our effectiveness and doesn't present a unified approach to our funding partners in Washington.

In other cities, transit is run by an authority that oversees, coordinates and operates suburban, urban and regional systems. They work with local, state and federal agencies, have access to needed funds and are authorized to spend tax dollars effectively and efficiently. An authority will be approved by the Legislature once the Big Four agree on a governance structure which they must do soon because time is not on our side.

Transit is not a silver bullet that will magically save Michigan’s economy; but a modern transit system – like good schools, universities and vibrant cities – is a common denominator that defines America’s most successful regions. Experience and data gathered from visits to other states and cities shows leads many people to believe that a serious investment in modern transit is not an option for Michigan – it’s an urgent necessity. Let's build these systems right, once and for all, and move Michigan forward.

Michigan faces a $1 billion-plus budget deficit. Michigan also allows some $32 billion in tax breaks, as we've repeatedly pointed out in this newsletter.

A new coalition of some 20 organizations is calling for an end to some loopholes and an overall examination of our network of tax breaks.

Two former state legislators, Democrat Lynn Jondahl and Republican Don Gilmer, summed up the issue well in a recent Detroit Free Press column, saying: "Closing loopholes makes good sense as we watch the layoffs of state troopers and local law enforcement officers and firefighters, the slashing of prevention programs for at-risk families and children, and the reduction of needed mental health and health care services."

Loopholes Jondahl and Gilmer cited:

No doubt, there is much more Michigan's public sector has done to improve the efficiency of service delivery, but as the Center's recent reform issue guide illustrates, there is still much more that can be done to stretch taxpayer dollars. But there's also much more we can do to spread taxpayer burden more fairly by closely examining loopholes.

It's also worth noting that the federal government is now pitching an idea -- an increase in alcohol taxes -- we've been yelling about in Michigan for years now. The last time Michigan adjusted beer taxes, we lowered them. Lyndon Johnson was president at the time. Simply indexing beer taxes to inflation would have, by now, resulted in a quarter-billion dollars per year in added revenue. As we've said before, it's very hard to imagine industries leaving, or refusing to locate here, because the beer taxes are too high.

The real answer is a fundamental debate about the public purse -- how much do we need to properly invest in the kind of 21st century services that will attract and retain prosperous business and employees? And what are the most equitable and sustainable ways of funding those services?

"Sanctuary" was posted by Rob Rypma

The bars and goodies tables in the lobby weren't quite so lavishly stocked as in years past. People were talking about Chrysler's descent into bankruptcy and looking forward – if that's the right word – to GM's. And nobody had any real idea what would happen to this battered state when two of the three domestic car manufacturers wind up bust. The only bright spot was the cheers that erupted late in the evening when the Red Wings won in overtime against the Black Hawks.

Worse, nobody seemed to have much of an idea about what needed to be done to pull Michigan out of the morass it finds itself in. Various candidates for governor – including Republicans Terry Lynn Land and Mike Cox and Democratic Lt. Gov. John Cherry were working the crowd with an odd mixture of the energetic and the anxious. But none of the so far announced candidates seems to have generated much excitement. Rumors are flying about others entering the fray, including Oakland County Sheriff Mike Bouchard and Domino's Pizza CEO Dave Brandon.

The upshot is a widespread strong sense of frustration.

In the opening session, even usually upbeat Governor Jennifer Granholm seemed a little worn, especially next to keynote speaker T. Boone Pickens, the 81-year oil man and chief advocate for a national policy favoring alternative energy over constant imported oil. Pickens has the slightly rumpled look and easy chuckle that reminded me of Ronald Reagan at his best. And when Granholm tried to cut an economic development deal with him right on the stage, her eager invitation fell to the ground like an expired balloon.

Which was too bad. Because her argument that Michigan's economy was on the verge of a new day of prosperity based on alternative energy actually made some sense.

Citing our abilities in manufacturing, engineering and innovation, Granholm argued that "the best reason for companies to come to Michigan is what's here already."

She cited three sectors of particular interest.

Start with batteries, most of which are manufactured in Asia, but which will be essential for a new generation of automobiles and all kinds of other applications. The state has put up $700 million in public funds to support battery companies in Michigan. Together with a shot at $2 billion in federal stimulus money, that has led to at least five new companies working on batteries in Michigan, with the promise of more to come.

As to wind – "it blows all the time, especially here." as one conference attendee put it – the idea is that our experience in manufacturing puts us at competitive advantage for building the enormous turbines that generate electricity from the wind. Granholm boasted that the federal government ranks Michigan number two in the nation for wind machine manufacturing.

The play in solar energy appears to be limited to making polycrystalline silicon, the necessary feedstock for solar panels. Hemlock Semiconductor and Dow Corning are now into spending billions in expansion. Companies that make solar panels, such as United Solar Ovionics, are also growing.

All of this reminded me of past Michigan history. A quarter century after the great white pine forests were clear cut in the last half of the 19th century and our economy looked flat on its back, an explosion of innovation sowed the seeds of Michigan’s greatness. A 20-year period saw the start of Dow Chemical, Upjohn, Kellogg and the Ford Motor Company – companies that still have an enormous footprint here.

The idea is that history might repeat itself, with triumph following crisis.

But as Pickens put it in the opening session, "There is no substitute for leadership. Either you've got it and you'll be successful, or you don't and you'll fail.”

For most of the people perambulating inside the Grand Hotel – the weather outside was too cool and too wet for much perambulating – where that leadership was going to come from was at the very best an open question.

But, wait, there's more...

For all the present panic in the auto industry, Mackinac attendees are beginning to see a light at the end of the tunnel. Seventy percent of attendees said they expect the Michigan economy to be stronger in five years than it is today (up from 66 percent last year).

And for all the talk about unemployment, the Detroit Regional Chamber's new online internship service -- interninmichigan.com -- is off to an impressive start. The month-old site has garnered more than 3,000 student sign-ups, nearly 400 registered employers, 120 posted internships and 14 internships filled, as of Thursday morning.

Here's something to chew on... Ann Arbor-based Domino's Pizza saw a 69 percent increase in first quarter earnings and has become the nation's largest sandwich delivery firm over the past nine months, CEO David Brandon told the crowd during a business diversification session Thursday. "Change is at hand, but it has made us a better company," he said, and bluntly suggested it's time for political leaders to adapt in Lansing with a reference back to his college football days at Michigan. "Sometimes, you get to the line and forget the play," he said. "In those times, what I was coached to do was to do SOMETHING. Hit somebody!"

Henry Ford Health Systems Chief Operating Officer Robert Riney offered a wonderful illustration of entrepreneurial success. In 2002, the hospital took a chance and honored a doctor's request to buy a largely unproven, $1 million robotic prostate surgery tool. "Today, we are considered a national leader in prostate surgery," Riney said, ticking off the patients from every state and 23 countries who flock to Henry Ford to receive the benefit of the robotic surgery tool. "They eat in our restaurants, they stay in our hotels, and they leave here with a very good impression of our region."

And Bill Parfet, the founder of MPI Research in Kalamazoo and one of several prominent west Michigan voices at this year's conference, unblinkingly looked past the island's dreary skies and cast off the long-held impression that Michigan's climate and economic reputation made it hard to recruit talent t the state.

Parfet said it is "easy" for MPI to recruit talent "because we've created a system where people have a voice in what they do."

"You bring people to Michigan for 24 hours - I don't care what time of year it is - and these people will stay when they see the quality of life and the affordability of our communities," Parfet said.

Amen.

Ok, it wasn't really a committee -- he put on a nice suit and tie and asked a lot of questions.

It didn't take long for our newbie to hear rumors of stiff competition -- two sitting state representatives as well as a veteran suburban mayor were supposedly eye-balling the same Democratic primary next year for the Senate seat.

Gulp.

By noon it was clear one of those state reps would stay put in the House. "Why would I go to the Senate now?" she asked. "I'm a Democrat and I'm in the MAJORITY in the House. I couldn't get anything done in the Senate."

Gulp.

Suddenly fully enlisted in our newbie's adventure, I found the sitting state Senator waiting in line for lunch. She'd caught wind of the whippersnapper's interest in her seat, but was puzzled by the idea. "He has no political experience at any local level, right?" she asked, and I nodded. "Why does he want to start out seeking a seat in the Senate?"

Gulp.

By late afternoon, our newbie had his branding pitch down cold and tried it on Meijer President and CEO Mark Murray in the Grand Hotel lobby. "The decisions we make as a state over the next few years will go a long way toward setting our course for a long time to come," our newbie proffered. "My wife and I have made commitments to stay here. I'm by no means sure I'm going to run for office, but I'm searching to find the best possible way to help my state."

Murray was impressed with the idealism, but suggested our newbie direct it elsewhere beyond the state capitol. "I believe the most heroic leadership in our state between 2010 and 2020 is going to be among the entrepreneurs who are creating new industries," Murray said, and then spun a metaphor. "It's not going to be about farm policy -- it's going to be about the farmers and their new crops."

Gulp.

By sundown, our newbie was on a bar stool, seated next to a bright young state rep. His beer half-empty, he clearly wasn't sure what to do. But his tie knot was still tight.

Murray might very well be right on this one (as usual). And political vets are going to be glad to shake hands and smile at the Fusion types but they aren't going to make it any less intimidating for the newbies to gain entry. However, until recruits from Fusion and Detroit Young Professionals and the numerous other young professional socieities cropping up from Kalamazoo to Midland to Traverse City actually get more seats at the legislative tables, their power to create bold change will be too limited.

Why wait until the end of the year? If serious about refashioning government for the 21st Century, Cherry can move swiftly now by enacting well-documented, bipartisan, money-saving reform approaches that have bounced around Lansing for years. Three examples:

Center for Michigan Government Collaboration & Accountability Action Group (this month) -- A wide cross-section of Center for Michigan members strongly supported a numerous key reform approaches in a Lansing conference earlier in May. Click here for quick guide to 10 reform ideas Lansing has not yet addressed. Approaches endorsed by conference participants:

1. Intensified school consolidation and service sharing.

2. Intensified local government consolidation and service sharing.

3. Reform of Act 312, which provides for binding arbitration in contract negotiations with public safety officers.

4. Reform of the Urban Cooperation Act to remove wage and benefit barriers to collaboration across governmental units.

5. Launching a statewide public sector benchmarking program.

6. Requiring local schools and government participation in a statewide public sector benchmarking program as a condition of state funding.

7. Rewrite the state revenue sharing formula for local governments to better incentivize collaboration, reward best practices, and fund specific services.

8. Increase state and local government health care co-pays for workers.

9. Tighten state and local government pension rules and/or move to 401K-style benefit plans. Participants were split on whether to do this for all current workers. A clear majority recommended it only for new employees.

10. Create a large health insurance pool for public sector workers.

In a blistering column this morning, Detroit News business scribe Daniel Howes illustrated the frustration of business leaders who are tired of waiting for reforms... "The longer Public Michigan waits to reform the structure of government, to rationalize departments, to commonize retirement systems of public and school employees, to push consolidation of police and fire service among neighboring communities, the tougher the future will be. Ask GM."

Maybe she's a visionary or maybe she's tilting at windmills. But as the governor talked, the Grand Hotel ballroom seemed especially old, its white pillars representing the past and its air tense with the uncertainty of creative destruction underway in much of the Michigan economy.

WWJ's ace technology reporter, Matt Roush, offers a brief and thorough overview of Granholm's alternative energy vision in this report. A couple additional tidbits...

AN UNCOMFORTABLE PITCH: Granholm shared the stage with Texas oilman T. Boone Pickens, who predicted calamity if the United States does not quickly wean itself from foreign oil. Pickens told how he drives a Honda model that is the only natural-gas-fueled passenger car available to consumers in the United States. He fills it up through a natural gas pipe in his garage. Granholm suggested the same could be done someday with home windmill systems. "That's a dream," T. Boone responded. The governor then made an impromptu economic development pitch. "Have we got a deal for you," she told T. Boone. "What am I going to invest in in Michigan," he responded. "What are my opportunities." "Where are you buying your wind turbines," she said, alluding to T. Boone's large investment in wind farms. "GE," he responded, implying he'd stick with a world leader in turbine manufacturing rather than mess with Granholm's vision to help auto suppliers switch over to alternative energy component production. Granholm assured the crowd she'd privately pitch T. Boone on other ideas later in the day.

WHO ARE THESE ALTERNATIVE ENERGY COMPANIES: The governor highlighted several companies making strides toward her alternative energy/economic diversification vision. Have a peek for yourself...

All across America, newspapers are in crisis.

In Michigan, the Detroit Free Press and Detroit News have cut home delivery to three days a week in an attempt to move advertising and readers to a "virtual newspaper" online. Shrunken "express editions" can be bought at newsstands or taken through the mail on the other days.

The Ann Arbor News will cease publication July 23, while the Flint Journal, Saginaw News and Bay City Times are going to three days a week publication. The Journal Register Company, owner of the Oakland Press, Macomb Daily, Daily Tribune of Royal Oak and many weekly newspapers throughout the tri-county area, is in bankruptcy.

It's the same thing around the country. In Boston, only last-minute concessions by the unions saved the venerable Boston Globe from ceasing publication. The Seattle Post-Intelligencer has shut down, as has the Rocky Mountain News, while the industry buzz is that even the New York Times itself could be in trouble, saddled with too much debt and inadequate earnings to cover it.

This is an industry I know very well. Full disclosure: I spent more than 40 years as a publisher in the community newspaper segment of the industry. I sold the assets of my company, HomeTown Communications Network, Inc., which included the Observer & Eccentric Newspapers, to the Gannett Company in 2005.

So I'm both biased and heartbroken at what's happening to my old business, including the announcement that most of the Eccentrics will be shut down at the end of May.

Why is this happening? Two things have come together in a perfect storm that is crushing what had been one of America's most profitable and stable business models.

The first was the rise of a truly disruptive technology combining the computer, the web and all the companies that took advantage of the revolution in distribution of content. A consequence of this new technology is that the revenue base of the newspaper business model – advertising – has essentially gone away. (Most newspapers have traditionally shown a revenue profile of 75 percent advertising revenue and 25 percent circulation charges.)

The Internet has made it possible to distribute content through the web without having to pay for newsprint, ink and other costs of distribution. Not only that, but the lifeblood of many newspapers – advertising – has largely migrated to the Web, thanks to outfits like Google, which offers customers "pay for click" rates based on actual user activity. Classified advertising which sustained many newspapers for decades has migrated to sites like Craigslist, where ads are free -- and some have been sorted into classifications that wouldn't have been appropriate in family newspapers.

Midway through this revolution, the newspaper industry made a fundamental strategic error. It allowed free distribution of its content via the Internet. Instead of charging customers for access to their databases or for any individual news story, newspapers figured they would gain "eyeballs" on their web sites and grow Internet-based advertising revenue. True, but the unintended result was to train former newspaper readers that they could get for free what they used to pay for. And most people under 30 don't care to read newspapers; they prefer getting their information through the Internet.

The other blow has been the catastrophic national recession, which has resulted in the near-collapse of much advertising, period.

Even with newspaper-owned web sites showing substantial increase in reader traffic, the recession has dried up advertising of any sort, whether automobile, real estate, retail.

By the time the country comes out of the downturn, it may be too late for many newspapers.

This presents a danger to our democracy that is so huge it almost can’t be exaggerated. Mark my words. This will lead to a national catastrophe so large as to be … invisible.

Let me explain. For more than a century, there were people we call "reporters" working in every community in America. Their job was to wander around asking impertinent questions, which became in turn the basis for stories published in local newspapers.

Some reporters were good, others not so much. Some newspapers were fair-minded and accurate; some were awful.

But newspapers had two essential functions. First, they were how the local community carried on a dialogue with itself. Whether it was weddings and deaths, the doings of the city council, the exploits of the high school football team – all these things and more represented the substance of a community talking with itself, a process mediated and facilitated through the local newspaper.

Moreover, the newspaper – if it was doing its job – was an institution providing the public with oversight over the conduct of public affairs. Without the tough-minded work of reporters for the Detroit Free Press, Kwame Kilpatrick would still be a corrupt and flashy mayor. Without the work of the Lansing press corps, the outrageous inability of our state's leaders to put our financial house in order would be hidden from public view.

There were 60,000 print reporters and correspondents around the country three years ago, according to government records. But according to PaperCuts, a website that tracks industry job losses, an astounding 23,000 of those jobs have been lost since January 2008.

Five years from now, there may be less than half that number. And worse, they'll mostly be concentrated in the big news centers of New York, Washington, Chicago and Los Angeles.

And then what will happen to places like East Lansing, Traverse City, Livonia and Farmington? No reporters and no local newspapers means no oversight in the public interest. No oversight means a field day for corruption and incompetence.

That will be a catastrophe. But it will be largely invisible. Because nobody will notice what no longer exists.

Now maybe the blogosphere will contribute a kind of citizen journalism that can make up for the death of local papers.

But it's hard to see how the posts from bloggers can be subjected to the kind of fact-checking and professional standards that used to be what newspaper editors used to do.

Far better yet, maybe, just maybe, people in a community will decide that their local newspaper is a fundamentally important public utility that should be sustained by local taxes, like the public library. (Managing the oversight and governance of such an institution might be tricky, but it’s worthwhile taking a careful look.)

Alternatively, as is the case in some communities, perhaps philanthropic foundations will pay for web-based local news content.

Or on the other hand, communities may decide their own local newspaper is so important that they’ll rise to support it.

I was heartened to learn over the weekend that citizens in Birmingham have persuaded the Gannett Company to delay killing their Birmingham Eccentric, giving it a reprieve at least till July, by which time the staff needs to drum up 3,000 additional subscriptions.

Most often we do not notice what we do not know ... Which is why people die of cancer. My greatest fear is that the loss of local newspapers will produce an information, oversight and conversational vacuum that will fundamentally change our lives.

And change them, that is, not for the better.

***

Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

"Octopi" was posted by GR Patriot.

Posted by John Sorber

An increase in shared services by local governments, reform of Michigan’s revenue-sharing formula and increased health care co-pays for government workers are among priorities the state should consider. Those were conclusions reached by attendees Wednesday at an East Lansing meeting to discuss Michigan’s future. The "Michigan’s Defining Moment" session, sponsored by the Ann Arbor-based Center for Michigan, brought together public policy experts, government officials and business executives to debate possible reforms the governor and legislators could take up in the state’s budget crisis.

More than 100 people took part in the half-day reform summit, but the action doesn't stop there:

Participants included a mix of Lansing insiders and citizens and local leaders from across the state. The event was open to the public and attended by both Crain's and the Detroit Free Press. In more than three hours of expert presentation and town-hall dialogue, participants approved, by clear majority votes, the following reform schemes:

1. Intensified school consolidation and service sharing.

2. Intensified local government consolidation and service sharing.

3. Reform of Act 312, which provides for binding arbitration in contract negotiations with public safety officers.

4. Reform of the Urban Cooperation Act to remove wage and benefit barriers to collaboration across governmental units.

5. Launching a statewide public sector benchmarking program.

6. Requiring local schools and government participation in a statewide public sector benchmarking program as a condition of state funding.

7. Rewrite the state revenue sharing formula for local governments to better incentivize collaboration, reward best practices, and fund specific services.

8. Increase state and local government health care co-pays for workers.

9. Tighten state and local government pension rules and/or move to 401K-style benefit plans. Participants were split on whether to do this for all current workers. A clear majority recommended it only for new employees.

10. Create a large health insurance pool for public sector workers.

Participants voted down two other ideas:

1. Giving the state schools superintendent the power to force consolidation of school districts in cases where savings of 5 percent or more can be demonstrated.

2. Imposing across-the-board pay cuts for public sector workers.

"The sense here is that Michigan recognizes a need to change, but is not moving fast enough or necessarily in the right direction," wrote the Freep's Ron Dzwonkowski. "This is a conversation worth having. But we've had so many in recent years ... will it change anything? Some paticipants say this meeting may not, but the state's shrinking economy is going to force a lot of issues, so let's start making the best choices now for a "next Michigan" that state leaders have not adequately acknowledged."

"The urban cooperation act has a poison pill in it that protects any employee of any of the collaborating local governments from a reduction of pay and benefits. As a practical matter it kills any attempt at local collaboration." – Kurt Kimball, Grand Rapids City Manager Emeritus

"We need to think hard about what kind of services people need and want regardless of level of government – state, county, municipal, township. Ontario did a report called Who Does What on exactly that point." – Eric Scorsone, MSU Local Government Professor

"We need to rethink top to bottom at every level of government – state, county, city, township – the functions and the connections of government. And we need to do so in today’s environment – not that of 1837." – Scorsone

"The state is trying to balance its budget deficit on the backs of local government." – Kimball

"We've ignored the history of revenue sharing and distorted its purpose and function. I should know. I wrote the report." – Doug Roberts, former state treasurer and head of MSU's Institute for Public Policy and Social Research

"In considering doing benchmarking, especially when it comes to getting clean, comparable data, let's not fall into the trap of making the perfect the enemy of the good." – Kevin Prokop, co-chair of the Legislative Committee on Government Efficiency.

"Let's quit using the word efficiency. Instead, let's use effectiveness.” – Chuck Fellows, Green Oak Township trustee.

"Here's the only way I know to solve the enormous -- $46 billion unfunded pension and health care liability – issue pension bonds at a tax exempt rate and put the receipts into interest-bearing securities. That’s arbitrage. And it’s legal." -- Roberts

"I’d be worried if my pension plan was underfunded by $46 billion and the only remedy was arbitrage." – Cynthia Williams, Executive Director of the Michigan Education Special Services Association

"Sure, people deserve a good retirement when they work for years and years in the public sector. But the question is, can we afford to do that?" -- Kimball

"If we're going to address structural budget deficits, we simply have to address the cost of of health care. Period. Full stop." – Prokop

"The key point is to understand we are looking at the next Michigan. We need to make fundamental decisions about what we do and how we do it. It cannot be business as usual. – Doug Drake, Director of Health, Human Services, and Philanthropy, Public Policy Associates

"I want it all. I want it now. And I don’t want to pay for it." – an anonymous characterization of the citizenry.

It's no secret that many hard-working Michigan journalists are struggling to keep their jobs as their publications are struggling to keep the doors open.

The summit's panel of more than a dozen veteran journalists, online news entrepreneurs, and academics tossed around many thoughts on how to preserve a healthy "Fourth Estate" when the business model is crumbling.

The News Millage is one approach. It would work something like this... As traditional publications fold in Michigan communities, would county-wide consumers be willing to tax themselves to support a non-profit newsroom? An effective staff of up to a dozen smart, hustling local journalists could be had for $1-2 million a year, based on the roughest back-of-the-napkin calculations. That's arguably cheaper than many other local government services, such as libraries, or recreation and parks departments. A News Millage would raise all kinds of ethical questions about the independence of news gathering. At the same time, it would require local journalists to be public servants in the truest sense. Frankly, figuring out the rules of the new game would be one of the fun parts!

Would you support a news millage in your community?

Or similarly, would you support a sort of United Way check-off system in which local employers, employees, and philanthropists underwrote the costs of small community news-gathering staffs?

To listen in on those and other thoughts from the news summit, check out the summit blog or watch the televised replay of the day's events.

When it comes to providing government services and promoting economic development, the Grand Rapids area has found there's strength in numbers.

Five years ago, Urban Metro Mayors and Managers ("Affectionately known as 'UMMM,'" laughs Grand Rapids Mayor George Heartwell) was born. It's a partnership between Kent County and six cities -- Grand Rapids, Wyoming, Grandville, Kentwood, Walker and East Grand Rapids. The locals work together on everything from drinking water to wastewater, from transportation to regional planning, letting the unit with the most expertise and efficiency take the lead. The goal is to provide better services and build up the region.

They also lobby Lansing on issues such as revenue sharing, local collaboration and urban issues.

"As we're trying to rebuild a strong Michigan, we simply can't do it without strong cities," Heartwell said.

But despite municipalities' creativity, there's a limit to what the consortium and other locals can do under current Michigan law. There’s no shortage of advocates for collaboration and consolidation, including Senate Majority Leader Mike Bishop (R-Rochester) and former state Superintendent of Public Instruction Tom Watkins.

It's an easy case to make. The Great Lakes State has 83 counties, 1,242 townships, 274 cities of less than 10,000 population, 259 villages, 553 local school districts, 230 charter schools and 57 intermediate school districts, as Center for Michigan founder Phil Power noted in a 2007 column.
So what's stopping us from trimming local government bureaucracy?

There are about 70 to 80 laws on intergovernmental collaboration, said Michigan State University State and Local Government Professor Eric Scorsone. But the main barrier is the Urban Cooperation Act of 1967. Groups that want to give the 42-year-old law a facelift include the Southeast Michigan Council of Governments (SEMCOG), the Michigan Municipal League (MML), the Governor's Commission on Local Government of 2005 and the Governor's Emergency Financial Advisory Panel of 2007.

The primary problem with how the act works is the employee held-harmless provision, reform advocates say. Here’s how it works, according to Scorsone. Say two cities want to form a joint police force. City A pays officers a starting salary of $50,000 per year, and City B only pays $40,000. City B offers three weeks of vacation and City A provides two weeks. Under the Urban Cooperation Act, the joint department will have to pay the highest wages and benefits – which would mean City A’s salary and City B’s vacation time plan.

"It forces everyone to the higher level, which isn’t very ideal in a merger to save money," Scorsone said. "It's hard enough to merge one function, let alone merge completely in Michigan."

This provision was put in place to protect unions, said Heartwell. It also means that a lot of mergers, particularly fire authorities, go the way of the dodo.

Another sticking point is that locals can't renegotiate union contracts, said Samantha Jones Harkins, legislative associate for the Michigan Municipal League. The goal is not to take away collective bargaining, she said, but to hammer out details for a reasonable new wage and benefit package. Cities A and B could, for instance, offer a $45,000 salary and two weeks' vacation, if the Urban Cooperation Act were rejiggered.

Not surprisingly, there's union opposition to these ideas. Michigan's eight-year trend of job loss has led to government layoffs at every level. Just last week, Gov. Jennifer Granholm issued an executive order for the Fiscal 2009 budget pink-slipping more than 300 state workers, 100 of them state troopers. And thousands will be furloughed for up to six days this summer as part of the $349 million in budget cuts. A case can be made that state and local employees have already paid a big price in government restructuring.

The strongest opposition is from the Michigan Professional Fire Fighters Union. President Paul Hufnagel said the union doesn't oppose fire authorities or mergers. The issue, he said, isn’t that firefighters could see lower wage and benefit packages. He argues that the reforms being considered to the act mean layoffs and "dumping contracts," whether employees are represented by a union or not.

"It means some employees won't have jobs," Hufnagel said. "If you can't ensure jobs, it doesn't mean anything. It's taking away everything they’ve worked for."

Budget crisis pressure

With another state budget crisis, reform advocates argue there’s no time like the present to revisit the Urban Cooperation Act. After all, Granholm just stripped away $41 million in state revenue sharing. That wasn’t the first time funding was cut; it's been the pattern for the last eight years, Heartwell notes.

For many locals, it's a double whammy where their two primary sources of revenue have been slashed. Rep. Paul Opsommer (R-DeWitt), a former mayor, notes that property values have been going down and municipalities' tax revenue has followed suits. That means a lot of cities and townships across the state are drowning in red ink – and not just Detroit, Flint and Highland Park.

"It's an important thing because of the economic situation we’re going to experience in Michigan," Opsommer said. "You know it’s going to get a lot worse. The time to act is now."

It will take about a year for locals to get agreements, he notes, so ideally, legislation should be passed right away. Last session, Opsommer and former Rep. Glenn Steil (R-Grand Rapids) sponsored legislation reshaping the act. Opsommer has reintroduced part of the package this session and is trying to persuade a member of the Democratic majority to sponsor other parts of the package to increase the chance of passage.

The firefighters' union wasn't on board last time, and Hufnagel said it won't be this session if the legislation doesn't undergo major changes. He argues that Opsommer's legislation "stripped employees of their rights" and could harm public safety by having fewer firefighters and police officers in communities. The union chief said he’s worked with Democratic House leadership about his concerns.

Harkins acknowledges that without support from the firefighters union, chances of passage are dicey – even with intense pressure from local governments after revenue sharing cuts.

"Going against the firefighters is very hard in the Legislature politically," she said. "But if there's watered-down legislation, it makes it far less likely that the (Republican-controlled) Senate will pass it."

Secrets of success

Before the wrangling over the $1.8 million budget deficit, the brief state shutdown and the tax increases, the governor did try to make it easier for locals to work together.

In her 2007 State of the State address, Granholm offered the carrot of an additional $25 million to $30 million in revenue sharing to encourage communities to engage in more intergovernmental collaboration. That plan, however, quickly got lost in the shuffle as tense budget negotiations stretched through the summer and into the fall.

Scorsone helped her administration fashion the idea, although he doesn't think it was the most effective approach. As long as the locals documented their efforts, they would get the money.

"I think that would have helped, but I'm not sure it would have amounted to much savings," Scorsone said. "Under the circumstances, however, I think it was the best she could do."

New York has a competitive bid structure that Scorsone and other regional policy experts favor. Under that framework, locals present competing plans to policymakers. Those with the most innovative and effective collaborative solutions would receive grants. Scorsone said the Empire State has "definitely shown some success," although he'd like to see a more stringent evaluation of its program.

Another model Scorsone and national urban policy consultant David Rusk would like to see Michigan adopt is regional government, particularly for metro Detroit. This would go beyond mere intergovernmental cooperation to setting up a metropolitan council overseeing services and planning in the region. Scorsone doesn’t favor the Toronto model, where all services were streamlined at the metro level and the transition has been rocky. Vancouver, British Columbia, got it right, he said, with a hybrid approach where locals maintained some functions they excelled at.

"It's not a magic bullet," Scorsone said. "It won't solve every problem. But in my mind, it's the solution for metro Detroit."

The argument for greater Detroit – Oakland, Wayne and Macomb, and possibly Genesee, Washtenaw, St. Clair, Monroe and Livingston – banding together is that their economies and populations are intricately interwoven already. While it would ostensibly help the crumbling city of Detroit the most, the idea is that a rising tide would lift all boats, since the Motown is a drag on everyone in the region. Oakland County Executive L. Brooks Patterson had been resistant and has long charted an economic development course without Detroit, last week forming the Economic Growth Alliance with Oakland, Genesee, Livingston and St. Clair counties.

Rusk argues that it's naïve to think that the region can prosper without its core city. In March, the seasonally unadjusted jobless rate was 14 percent for Wayne, Oakland, Macomb, Lapeer, Livingston and St. Clair counties. Detroit’s unemployment rate has hovered at 20 percent for months. Oakland County is faring better, although its March rate is still high at almost 12 percent.

Regional government could be adopted in smaller areas, as well, Rusk argues, such as Battle Creek, Flint and Saginaw. But Rusk, who has worked on Michigan planning issues, said at a Battle Creek planning meeting in 2007 that there is a lot of resistance.

"It's the third rail of Michigan politics, and it leads to lower economic growth," he said. "For transportation, infrastructure, workforce and societal issues, communities are trapped in little boxes in this state."

Economic development tool

One of the biggest arguments for reforming the act is that intergovernmental cooperation will save gobs of money. But Heartwell, the Grand Rapids mayor, said this isn't a short-term fix for municipalities.

"I'm very fretful about saying there will be major cost savings," he said. "Over time, there are savings to be enjoyed through consolidation. There are tremendous efficiencies that will eventually be very cost-effective."

Scorsone concurs.

"Stuff goes wrong in mergers. There's Murphy's Law – everything costs far more than you think it will," he said. "It can take many years to see savings. Anyone who thinks that this will fix the fiscal problem is off-base."

Instead, Scorsone argues that reforms should be viewed as a powerful tool for economic development. He notes that global corporations look at regions, not municipalities, in terms of infrastructure, tax incentives, education, workforce and quality of life. Rusk said regions that work together on economic development, like Minneapolis/St. Paul and Chicago, are successful.

"The mentality there is, 'We've stopped eating each other's lunch, and now we're eating your lunch,'" Rusk said.

Currently, Michigan locals often cannibalize each other in terms of economic development. It's not uncommon for a company to move from a city to a nearby township offering greener tax pastures. No new jobs are created and local revenue is lost by both governments.

"In our winner-take-all system of tax incentives, you don’t develop the region," Scorsone said.

The six cities in greater Grand Rapids are trying to stop this cycle and build up their region’s brand together. Collaborating on services and planning is important, Scorsone said. There are many other steps beyond reforming the act – the Portland and Minneapolis metro areas share the same tax formula, for instance. And there’s revisiting the controversial Public Act 312 of 1969, which prohibits police officers and firefighters from striking over contract issues.

But reform advocates argue that when it comes to modernizing and reimagining Michigan, the Urban Cooperation Act is a good place to start.

That's something I've been thinking about and trying to figure out for years. I am convinced that part of the explanation has to do with the basic structure of our society. Beginning with Alexis De Tocqueville’s great early 19th century work, Democracy in America, commentators have observed that more than most nations, America is comprised of a myriad of interest groups – people gathered together in solidarity to promote their particular way of life.

Some of these groups are very big – organized labor and the business community. Some are small – apple growers and charter school advocates. But virtually every interest group comes together in the political arena to support its allies and fight off its opponents.

The way they often do that is through devices called Political Action Committees (PACs), which contribute money to like-minded candidates. No one knows exactly how many PACs there are in Michigan, but it must be thousands.

Some are rich and powerful: Our top 150 PACs raised $27.3 million in 2008, the Michigan Campaign Finance Network calculates.

What we do know is that for virtually every issue of public policy and government activity, there is a corresponding PAC – and very often several. Each PAC views the world only through the lens of its own particular interest. And the activities of all these PAC’s tend to divide our political discourse into tiny little segments.

Apart from how they affect individual issues, these political action committees have several effects on our society, all of them bad. PAC culture has helped magnify and justify the role of self-interest, and at the same time, sparks and encourage conflict.

Those aren't things Michigan needs more of right now. This segmented culture has had a corrosive effect, especially when the overall interests of the state – revitalizing our economy, for instance – are at issue. It has become very hard for our politicians to come together in the common interest. To do that, it is necessary to first develop a shared vision of where we want to go in the long run and then work out a strategic action plan to get there.

But that's become harder than ever, given the fact that PACs, vehicles which by definition divide our society, are now the source of most politicians' campaign funding.

This is a problem that has been building for years. In Michigan, a state in desperate need of a shared vision for our long-term transformation, this has created a crisis of the greatest urgency.

Two current examples suggest people are beginning to notice:

An article in last week's issue of the Lansing-based politics and policy newsletter MIRS (Michigan Information and Research Service) dealt with a bill to close failing schools. The advocates of the bill, Reps. Tim Melton (D-Auburn Hills) and Bert Johnson (D-Highland Park), "seem to be trying to do something that only rarely happens in the legislature – they're trying to move measures that are opposed by both sides of an issue." The problem here is that teachers' unions worry that the bill will lead to expanded charter schools, while the charter school interests feel the bill doesn't go far enough.

MIRS concludes, "Attempts to walk between vested interests don't have a particularly good track record in terms of passage in the legislature. Finding the narrow path between opposing doctrines that leads to consensus tends to be very difficult."

That's been all too true. But today, an overwhelming majority of Michigan citizens say that turning around failing schools is essential to our future. The danger is that this shared vision is at risk of being stymied by conflicting interest groups and their PACs.

One encouraging example comes from Republican gubernatorial candidate Rick Snyder, who last week challenged his four primary opponents to turn down campaign contributions from PACs and registered lobbyists. He argued that reducing the influence of interest groups would be good for government in Michigan.

"Time and time again, Michiganders feel elected officials break their promises and cannot be trusted because they owe their election support to special interests," Snyder wrote.

Now, part of this may be self-serving, politically. Snyder is a successful Ann Arbor businessman. Maybe he can more easily afford to turn down PAC money than can his opponents. But his comments do a nice job at illustrating the public skepticism of a politics heavily influenced by special interest groups.

Attempts to develop a shared vision for Michigan's best future are essential, if we are ever to develop a common ground agenda and action plan to transform and revitalize our economy. And to do that, we have to start by understanding how and why our politics get so splintered and our government becomes, in the end, so tragically ineffective.

***
Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

Last fall, I moderated one of the debates between Brooks and Southfield Mayor Brenda Lawrence, who failed in her attempt to unseat the long-serving Oakland County executive. There were whispers in the audience that night, even among some of Brooks' Republican friends, that Metro Detroit would never move forward as a region until the cheery, silver-haired, Detroit-bashing obstructionist got out of the way.

This winter, as Brooks considered a run for governor, I heard more than one Lansing insider, including some Democrats, acknowledge that Brooks might be the only candidate in either party with the guts and expert, business-minded staff who could transform state government through serious reforms.

Now comes the miserable news that Brooks' new vision for Metro Detroit is to split it in two -- North and South. Apparently ticked over the momentum for the Wayne-County-based Aerotropolis concept that could bring diversified economic development to all of Metro Detroit, Brooks wants to take his marbles and join forces with the disparate cities of Flint and Port Huron.

"My future lies with these counties that are more like my own," Patterson told Crain's Detroit Business.

Well, I don't know where Brooks' future lies, but Oakland County's is inextricably linked to the rest of Metro Detroit, like it or not.

At times, it can seem like Brooks can move heaven and earth in a county budget. But there ain't no way he's moving airports.

The region can't support two major air transport/logistics systems or two back-biting regional economic development strategies.

Coming on the heels of the Cobo debacle, this bipolar regionalism is just one more sign that it's going to take a new generation of political leaders to move ONE region forward. Metro Detroit's young professionals have received much love and good press as they've begun to organize in the past couple of years. This is their challenge.

"Take a look at this video… Share it…link it to your web site. Maybe we’ll keep a kid from going to Chicago…Maybe we'll convince a policymaker to stop attacking our largest city and invest where it's smart to invest..."

CLICK HERE

In YouTube's promotional box next to that inspiring clip of young and innovative professionals fearlessly staking a claim in 21st Century Detroit, another video told a different story of "The Detroit Housing Apocalypse"...

CLICK HERE

Meantime, the Detroit News' brilliantly quirky storyteller, Charlie LeDuff, showed how the residents of a healthy neighborhood just off Woodward Avenue had all but evaporated in five short years...

CLICK HERE

The point is, both versions of Detroit are accurate. The question is, which one will ultimately overtake the other? And when? It's the question that's gotta keep Dave Bing up at night. Every night. He wanted the job. Now he gets to figure this out.

As someone who often traveled Detroit's streets as a reporter over the past fifteen years, I can see a couple sides to this story. On one hand, you could argue that the terror over the vacant building epidemic is a bit sensationalistic. More than a couple neighborhoods were far from healthy when they were populated. And vacant neighborhoods have been at epidemic levels for a couple decades now. Along these lines, you could argue that whole sections of the city may need, and are in the process of, being flattened on a long glide path to being rebuilt. (Coleman Young sometimes thought that way. Remember Poletown?) It takes a bit of imagination and adherence to creative destruction, but you could make the argument that intensified blight puts the city much closer to revival than it was 10 or 15 years ago when so many more neighborhoods were populated, but still only hanging on by sparse social threads now snapped.

But you also have to look beyond the physical tragedy of the boarded up buildings. Where have all the people gone? Chicago, in its boom before the housing bust of recent years, largely pushed poor minorities into a somewhat silent and invisible existence in its inner-ring suburbs. What about Detroit? It didn't see Chicago's economic upside, but people are clearly what remained of the working class neighborhoods in droves. As they leave, are they finding greener grass across 8 Mile? Are they dilluting urban political power, or regrowing it beyond Detroit's borders? And if the city is flattened and remade, for whom will it be remade? Is it destined to be an insular home for mainly African-Americans who either can't or don't want to leave? Or, will it more closely resemble the diverse vision in that first video?

Black, white, and Hispanic young professionals in Detroit who've participated in the Center's Community Conversations aren't blinking at these questions. They're not expecting much effective help from any government anywhere. But they'll tell you they relish the challenge and the chance to recreate the American city.

What do you think?

Can they do it?

Posted by calvin gsc.

Feel free to join the widespread gnashing of teeth by reviewing the Senate Fiscal Agency summary of what got cut and by how much.

But there's no sense getting lost in these details because more cuts are coming. The state's best bean counters will re-estimate tax revenues again in the middle of this month. The deficit is expected to grow again and additional cuts are likely in the fiscal year which ends in September.

And business groups have plenty of ammunition in vehemently arguing state leaders are using federal stimulus money as an irresponsible budget plug when more than $1 billion in possible reform choices have not been acted upon.

Amid the gloom, though, there is some good news.

In striking contrast to the near government shutdown two years ago, this week's budget cuts came together after two weeks of intense, collaborative, bipartisan negotiations between several key senators and representatives, including public budget experts who were pretty much ignored by House and Senate leadership during the nasty process two years ago.

Some of the legislators involved in the negotiations declared the process among the most positive experiences they'd had inside the capitol, despite the ugly topic at hand. Gone were the partisan machinations of two years ago. Also absent were the Big Three leaders who so famously bickered in 2007: Governor Jennifer Granholm, House Speaker Andy Dillon, and Senate Majority Leader Mike Bishop. Instead, they delegated the hard work to the following budget insiders who deserve thanks and credit for breaking new ground in problem solving under tough conditions.

Kudos go to State Budget Director and former state Democratic Senator Bob Emerson. Legislators from both parties told the Center that Emerson was a "fantastic" leader in the budget talks. One legislator declared: "Bob Emerson is the real governor right now."

Kudos also go to Republican Senators Mark Jansen, Ron Jellinek, and John Pappageorge; Democratic Senator Mickey Switalski, Democratic Representatives George Cushingberry and Rick Hammel, and Republican Representative Chuck Moss.

The mutual respect, trust, and communication Emerson and these legislators are beginning to build on budget matters is certainly going to be in very high demand over the next couple of years.

This town-hall-styled reform gathering will go from 8 a.m. thru noon at the Kellogg Center.

Seven public policy experts will help lead discussion, debate, and citizen voting on 10 possible reform approaches not yet taken up by the governor and legislators in this budget crisis. Those 10 approaches are:

1. Increased school consolidation and service sharing.
2. Increased local government consolidation and service sharing.
3. Reform of Act 312 which governs police and fire contract negotiations.
4. Reform of the Urban Cooperation Act and bureaucratic hurdles to government cooperation
5. Requiring statewide benchmarking of public service delivery.
6. Rewriting rules governing revenue sharing to local governments.
7. Public employee pay and staffing levels.
8. Moving from pension to 401k-style benefit plans for public employees.
9. Public employee benefits co-pays.
10. Expanded public employee benefits pools.

The seven public policy experts who will illuminate the pros and cons of these choices are:

Please email us if you would like to reserve one of the few remaining seats. Registration will close at end of business today.

M. Scott Peck, author of The Road Less Traveled, uttered those words years ago, but might as well have been talking about next week in Michigan. Groups are hosting reform discussions far and wide, including these:

By Jack Lessenberry

I attended a fascinating, off-the-record dinner in Lansing last night. It was sponsored by the non-partisan Center for Michigan, and brought a bipartisan group of legislators and some of us other old- timers together with young people in their 20s and early 30s, entrepreneurs doing their best to spark new life in this state.

There were about forty people in the room, and conversation was free-flowing back and forth between the tables. Suddenly, a word popped into my head that I haven't much used in a long time.

Generation gap. Some of the legislators just couldn't, or wouldn't, hear what the successful young people were saying.

One especially eloquent young man from Ann Arbor asked if the lawmakers had any idea how much damage they were doing by zeroing out the tiny arts budget. An especially dense state senator didn't seem to understand what he was talking about. The senator responded by parroting a moss-covered GOP talking point about reducing spending, then, after a time, stuffed some papers in a briefcase and left.

Other lawmakers, to my dismay, also drifted off, for the sort of meetings with lobbyists and constituents that fill up their days and nights. (And some with legislators with young children hurried to get home for bedtime stories.) These are frantic times, and even the new lawmakers were becoming delightfully cynical about the people they represent. Right now they are scrambling to balance a budget that is over a billion dollars out of whack. All day, they'd been getting calls from interest groups demanding "Don't cut me." In many cases, these were the same folks who also demand "don't vote to raise taxes."

But while some rushed off to appease their masters, a number of the brighter young lawmakers stayed to the end, and, I think, learned something. The young entrepreneurs weren't interested in the usual dreary Lansing debates. That's not the world they live in. What they care about was this state, which they see as a wonderful place to live. They want to make it better, and make it a place where their children and grandchildren can afford to live someday.

They transcended politics -- but haven't quite given up on it. Most of them don’t want to pay more taxes, but they also knew that civilization has a price. Virtually all of them thought the present political leadership of this state had essentially failed them.

They wanted, to my surprise, a strong governor capable of exercising leadership. They thought Jennifer Granholm had failed totally on that score. But they weren't inspired by her opponents, or by any of the wannabee candidates for governor.

They thought our alleged leaders were all clinging too strongly to the remnants of the dying auto culture. They should instead, they believed, be trying to identify what was coming next.

But regardless, most of them seemed determined to hang in here and drag Michigan into the future. "Every year I think about leaving, and sometimes I do, but I always come back," one young woman said. "This is a tremendous place to live."

That, more than anything any of the politicians had to say, gave me a strong glimmer of hope.

For years, that was the general policy toward young professionals in Traverse City.

But now, as in many other Michigan locales, business leaders in Traverse City are listening closely to what young professionals have to say.

Here's the young professionals' agenda Up North, courtesy of Beth Milligan, communications and young professionals coordinator for the Traverse City Area Chamber of Commerce...

1. Aggressively recruit creative/high-tech firms -- cultivate knowledge economy jobs. (Examples: Google, Ann Arbor SPARK, low-cost training programs for the film industry and not just in Metro areas)

2. Make arts funding a priority -- cities with vibrant arts and culture scenes and sense of "place" attract young people. (See Austin, Manhattan, etc.) Don't cut arts funding in the Michigan budget! This is a surefire way to drive young people from the state. (EDITOR'S NOTE: The governor's budget proposes to finish off several years of steep arts funding cuts by zeroing out the arts budget, which was a few million dollars this year.)

3. Develop renewable energy-related jobs.

4. Offer tax breaks to local companies that develop paid internships specifically for young professionals.

5. Reduce student loans and make affordable education a reality in Michigan to bring/keep more students here. Make high-demand degree programs less expensive. Increase availability of bachelor's and grad school programs in Northern Michigan.

6. Tax credits for first-time home buyers.

7. Tax credits for certain age demographics living within locals in need of young talent. There are 15,000 young professionals in Detroit and 226,000 in Chicago.

8. Rewrite Michigan's tax code to be favorable to small businesses.

9. More affordable housing.

10. Improve regional airports (like Traverse City) and their connections to larger hubs.

11. Preserve tourism funding in the Michigan budget!

By Melissa Preddy

Four decades after its adoption, a controversial Michigan law governing police and firefighter contract negotiations continues to divide organized workers and the cities that employ them.

Public Act 312 was sponsored in the late 1960s by Coleman A. Young, then a state senator, partly in response to "blue flu" sickouts by public safety workers seeking to forge more favorable employment pacts.

PA 312 prohibits police officers and firefighters from striking over contract issues. Instead, if an impasse is declared, the parties must by law submit to mandatory binding arbitration. In a nutshell, a three-person panel evaluates the “last best offer” by both the union and the municipality and declares a winner. The law later was revised to cover EMS workers and dispatchers; a similar statute covers labor pacts for state troopers and sergeants.

Municipal leaders say the law is outdated and wreaks havoc on their budgets. In some cases, it's led to police officers receiving more compensation in retirement than active duty, imbalances in compensation between public safety and non-public safety and has even forced local governments to cut services or raise taxes to live up to arbitrators' decisions.

A perennial bone of contention among government leaders, PA 312 has spawned numerous failed attempts at repeal or reform over the decades. While generally popular with labor unions, the law is disliked by municipalities who say its flaws take fiscal control away from negotiators and that decisions often are based on unfair or irrelevant precedents.

Now, with local budgets statewide strapped by dwindling property taxes, reduced state revenue-sharing and other woes, the law is back at the forefront of some activists’ agendas. Typically, city leaders say, public safety costs make up 50 percent of municipal budgets, so anything that affects those expenses is on the radar screen these days.

"It doesn't really allow communities to control their own costs," said Samantha Jones Harkins, a legislative associate for the Michigan Municipal League, a lobbying group representing Michigan cities. Harkins, like other critics, contends that arbitrators approve pay hikes and other awards without regard to a city's overall resources and ability to pay. Cities bound by arbitrators' rulings may have to dip into reserves, curb compensation for other workers or even raise taxes by enacting special assessments to satisfy police and firefighter contracts, she said.

The law also discourages cost-effective moves like consolidation, Harkins said. Communities that want to combine police, fire or dispatch services under cooperative authorities are stymied because PA 312 doesn't explicitly apply to authorities the way it does to municipalities. Until this gray area in the law is cleared up – and it’s not currently being addressed by state administrators -- unions would risk losing the recourse to PA 312 in consolidated districts. That means communities seeking to team up and achieve economies of scale may face opposition from public safety unions.

Harkins and state legislators plan to organize a work group this summer to study reform possibilities. Both critics and proponents agree that repeal is unlikely, but some would like the law amended to reflect 21st century pay and benefit issues that are far more complex than those in the 1960s.
Not everyone, however, is convinced that the law is outdated or unfair. And alternative suggestions are sparse.

"The act does exactly what it was designed to do: It stops striking," said Fred Timpner, head of the Michigan Association of Police, which represents numerous police officer groups in lower Michigan.
While he feels that arbitration is invoked prematurely by some unions, used sparingly it’s an effective tool. "I still believe the best outcome is through successful negotiations between the parties themselves," Timpner said. "But I see no need for legislative changes."

Paul Hufnagel, president of the Michigan Professional Fire Fighters Union, says municipal opposition to PA 312 is "a mountain out of a molehill." Fewer than 5 percent of firefighter contract issues reach binding arbitration, according to his union’s internal study

How the system works

Sixty-seven PA 312 cases were filed in Michigan in the 2008 fiscal year, according to the Michigan Employment Relations Commission, which oversees the binding arbitration proceedings. That's down from a 10-year peak of 127 cases in 2005. Before a PA 312 case is filed, the negotiators must submit to mediation if two-sided bargaining fails. Arbitration is a last resort, and even after PA 312 cases are filed, they often are settled before arbitration begins, said Ruthanne Okun, director of the MERC.
Under the law, the employer and the union each file a "last best offer" in issues in dispute. Unlike other states, Michigan allows issue-by-issue arbitration, meaning that some contract line-items are resolved by two-party negotiation, with only the most troublesome issues heading to arbitration.
Three-person panels are composed of one employer delegate, one union representative and one professional arbitrator selected at random from the MERC. If either party objects to the lead arbitrator, alternates are available under the same random selection rules.

In what is typically a months-long process, the panel reviews data, documents and written arguments submitted by each party in support of its case. The panel considers each unresolved issue separately; it's not uncommon for the final ruling to favor the union position on some items and the employer's proposal on others.

For example, in a September 2008 PA 312 ruling in Shelby Township, the panel awarded 100 percent spousal retiree health insurance per the union's recommendation but accepted the city's argument to leave a pension formula unchanged.

Panel decisions need not be unanimous, and two-to-one splits are not uncommon, critics say, noting that effectively gives all the power to the third-party arbitrator. Proponents don’t see a problem with the lack of a unanimity requirement, pointing out that issues wouldn't get to arbitration if the negotiators were able to agree in the first place.

Arbitration considerations

Arbitrators are supposed to consider the following economic factors, according to the statute:

Critics – generally the cities – charge that wording in the statute – such as "welfare of the public" and "ability to meet costs" is too vague and doesn't outline priorities for the arbitrators, who currently use their own discretion to weigh the above factors.

"My idea of ability to pay isn’t to stop capital investment, stop maintaining equipment and stop providing recreation facilities," said Bill Stewart, Coldwater city manager and a vehement opponent of PA 312. "You have to look at it holistically. But instead, you basically give the authority to a single person to spend the taxpayers’ money."

Two years ago, Coldwater spent $65,000 in administrative costs during PA 312 arbitration with its 30-plus police and fire employees. The city prevailed in dodging retiree health care for firefighters, but Stewart worries about what will happen when the firefighters’ contract expires later this year.
"In this environment of economic meltdown, you're going to have communities being less and less able to afford these awards," he said.

Union officials point out that the primary purpose of local government is public safety.

"If priorities are parks, community centers, golf courses and such, then you might have to cut law enforcement," said Bill Birdseye, treasurer of the Police Officers Association of Michigan in Redford. He recalls being part of a Detroit police sickout before PA 312 was enacted. "If you believe the principal goal is public safety and giving those employees a decent wage, then it will have to come at the expenses of other things. The pie is only so big."

Prioritizing the factors arbitrators must consider will be a major aspect of reform proposals, Harkins said. She expects that any amended bill would be introduced this fall.

Areas of dispute

The nature of the comparative documentation is another of the controversial aspects of PA 312 that critics most hope to change. Currently, the parties agree on "comparable" municipalities; then the arbitrators weigh the contract demands against conditions in the comparable cities or towns.
That's one of the process's glaring flaws, according to some city officials, especially as complex, formula-driven fiscal matters such as legacy costs, retiree health care funding and a variety of pension plans have supplanted the simple hourly wage as key contract issues. With police and firefighters tending to retire at young ages, due to the nature of their jobs and historic standards, cities can be on the hook for decades of costly pension and health care obligations.

In Southgate, for example, the Michigan Municipal League says PA 312 arbitration has driven up pension benefits to levels that ensure each of its police officers, and likely most firefighters, will retire with incomes greater than the wages at which they were employed – and still young enough to begin careers with other law enforcement agencies.

"Not all arbitrators are economists, and they don’t necessarily understand the ramifications of their decisions," said Robert Biga, human resources director for the city of Livonia. Forty years ago, as a temporary employee there, Biga helped prepare the comparables for the state's first PA 312 case. These days, he’s a veteran of numerous arbitration hearings and says the process needs reform. He'd like to see arbitrators with more financial and actuarial expertise, since decisions about retiree benefits and other legacy costs can have decades-long effects on city coffers.

Timpner, of the MAP, agrees that better training is needed for PA 312 arbitrators.

"It's a valid criticism," he said. "The issues today are very complex; it’s not just a question of whether somebody gets another dollar an hour."

Pay structures are so fragmented these days, Biga argues, that comparing one city's to another's doesn't give a true picture of whether a contract is fair. For example, he said, pay for the roughly 220 public safety officers in Livonia includes base wages plus add-ons like allowances for police officers’ guns and special clothing, food stipends for firefighters, pay for certain life-saving certifications and myriad shift, rank and longevity differentials.

Then there are pensions. Livonia uses a defined-contribution plan, similar to the private sector's 401(k), while most municipalities still use the defined-benefit pensions that are wholly employer-funded. It's difficult, he said, to find a comparable community in that regard when negotiating pension issues. Health care benefits for active workers and retirees add another layer of complexity.

"PA 312 is not keeping up with the times," Biga said. "It's based on old concepts of pay and benefits. The yardstick has to change."

Impact on other workers

Fairness to non public-safety workers is another problematic area, cities say. If they are forced by law to compensate police and firefighters (as well as EMS and 911 dispatchers) at levels decided by third parties, the money may well come at the expense of general municipal employees.
Among the reforms sought by the Michigan Municipal League is an amendment requiring arbitrators to give more weight to "internal comparables" – that is, not just the contracts of public safety workers in similar cities, but of all workers in the city engaged in arbitration.

"Everyone wants to do what’s best for police officers and firefighters," said MML's Harkins. "But when times are bad, everyone has to tighten their belts and make concessions."

Hufnagel, of the firefighters union, counters that union expectations are adjusted in tough times, but says it's unfair to compare police officers and firefighters to other types of local government employees.

"The risks, the training, the responsibilities are a lot different," he said. They are completely unique to the jobs we do."

Ideas for reform

Aside from amending the law to emphasize ability-to-pay issues and internal compensation comparables, alternative suggestions to PA 312 are sparse.

Even proponents of that part of the law agree that in the current economic climate, sudden events can rapidly change a city’s fortunes, leaving historic demographic, revenue and property valuations moot. Losing a manufacturing plant, for example, or suffering a high rate of home foreclosures, can abruptly alter a city’s future revenue prospects and ability to pay.

The municipal league wants lawmakers to consider a "catastrophic event" clause in an amended PA 312, which would reopen arbitration awards (but not negotiated agreements) if a city’s economic circumstances changed dramatically To date, very few arbitration awards have been appealed to circuit court, said the MERC's Okun.

The league also supports a moratorium on pension and retiree health care changes that would increase unfunded liabilities. And it wants specific language in the amended law that would prohibit awards that would be funded by unused millage or assessment capacity. Other changes would include a requirement to evaluate the future effect of any award over a five-year period, and to ensure the award would not require deficit spending.
But short of transforming Michigan into a right-to-work state, decimating union power, the underlying principle of PA 312 is unlikely to go away, observers say

"It's not going to be repealed, and I'm not sure we'd want it to be," said Eric Lupher, director of local affairs for the non-profit Citizens Research Council of Michigan. "Strikes endanger the health and safety of citizens."

Rather, Lupher says more judicious use of costly arbitration is needed.

"The number of issues subject to arbitration has just exploded," he said. The original intent was to cover salaries and a few basic benefits.

In a preliminary study, he said, the CRC identified 158 different issues that were decided by an arbiter over a 10-year period. Of them, 95 were directly related to pay and benefits. The rest involved work schedules, discipline policy, the ability to select shifts and stations, drug testing, vacation, sick, and maternity leave as well as odd issues not envisioned when the law was designed.

"Now you have arbitrators determining the right of firefighters to have a television in the firehouse and what hours it can be viewed," Lupher said. "Minutia."

Another problem is the historic expectation that all contract negotiations will lead to some sort of gain for workers. That simply may not be possible in an era of waning revenue – but cities who fear the loss of fiscal control that arbitration means may sometimes feel pressured into preemptive concessions.

Even though PA 312 is invoked in relatively few contract disputes, "it has impact beyond the number of arbitration cases," said Luke Forrest, public policy director for the Michigan Suburbs Alliance. "It changes the dynamics of the negotiations."

Like the municipal league, the Ferndale-based MSA suggested in a paper last year that PA 312 be amended to limit the number of issues that can be escalated to arbitration, to raise the priority level of the internal comparables and to prohibit awards that would send cities into receivership.

"Municipal revenues are not keeping up with inflation," Lupher said. "So how you handle these police and fire costs is vital to the health of municipalities."

"One estimate is that half of the state parks and recreation facilities are in bad condition," the Detroit News reported last month. "The Department of Natural Resources has more than 200 infrastructure projects that would cost a total of $341 million and only $2 million earmarked annually to make emergency repairs to deteriorating facilities... As the weather turns warmer and visitors begin to flock to the beaches along Lake Michigan in Holland State Park or spend nights under the stars at secluded campgrounds at Craig Lake State Park in the Upper Peninsula, they'll find much to enjoy. But, increasingly, they'll notice problems throughout the 98-park system...The state takes in $52.6 million in revenues for the parks. Officials say $90 million a year would be an optimal budget, but a minimum of $70 million a year would be required to do an adequate job. Park officials have requested federal stimulus money to make some repairs, but were told that no money would be available."

There is a simple way for the DNR to get much of $90 million every year.

A proposal moving slowly through the Legislature would charge a $10 fee for state parks as part of the annual vehicle registration process. It's how the beautiful state of Montana funds its parks system. The Michigan proposal could replace lagging fees from annual park permits and result in additional park funds of $40 million or more per year. Click here for a summary of the plan.

So what's the problem? Well, it's much like the state's approach to hunting and fishing license fees (which fail to provide enough funding to support wildlife, fisheries and conservation management programs are a pittance compared to others across the country.) Many lawmakers are terrified of passing any kind of tax increase or user fee change.

They even balk at a voluntary tax, which is exactly what the license fee would be. Any vehicle registrant who didn't want to support the parks, could simply get a $10 refund. In Montana, 88 percent of drivers support the parks tax and only 12 percent ask for refunds.

But, rather than giving Michigan drivers that choice, legislators could very well kill the proposal. Some of the young professionals who attended last night's Center for Michigan dinner with legislators shook their heads.

"We're fighting over a $10 fee for state parks?" asked an incredulous Alok Sharma, an information technology consultant and resident of Detroit. "C'mon. That's stupid."

"In Flight" posted by Mi Bob.

"A year ago a bipartisan state commission said that New Yorkers could save more than a billion dollars a year by consolidating and sharing local government responsibilities like public security, health, roads and education," Brokaw wrote this month in the New York Times. "One commission member, a county executive, said, 'Our system of local government has barely evolved over the past one hundred years and we are still governed by these same archaic institutions formed before the invention of the light bulb, telephone, automobile and computer.' In accepting the commission’s recommendations, Gov. David Paterson promised to work diligently to put the changes into effect. When his budget was presented this spring it included several of the proposed changes, but it immediately met stiff resistance even from members of his own party who were determined to protect their parochial interests. It appears that few of the original recommendations will survive... It's time to reorganize our state and local government structures for today's realities rather than cling to the sensibilities of the 20th century. If we demand this from General Motors, we should ask no less of ourselves."

In Michigan, Brokaw's plea for reorganization is simple reality.

The state budget deficit for the year ending this October is more than $1 billion and growing by hundreds of millions of dollars each month. Projections put the long-term structural deficit at $10 billion by 2017 and those projections, now a year old, very well may have been too hopeful.

Double-digit drops in property values are quickly eroding local government budgets.

Reinvention is at hand. Like it or not.

And yet, the Legislator and Granholm Administration continue to fail to act on longstanding reform ideas proposed by the governor's own financial advisory panel and the Center for Michigan's list of $1.5 billion in documented reform possibilities. Likewise, a legislative reform commission is developing another billion or more in possible state budget fixes.

If you are in the public or private sector and eager to see an accelerated pace of change in Lansing, join us on May 13 for the Center's Action Group on Government Accountability. Already, more than 150 people have signed up for a fast-paced morning of detailed reform discussion. Topics participants will debate, vote on, and, in some cases, sign up to work on in the capitol include...

1. GOVERNMENT COLLABORATION ISSUES: 1) School Consolidation and Service Sharing; 2) The Consolidate vs. Collaborate debate in local government; 3) Money saving possibilities of public safety service sharing agreements; 4) Local collaboration hurdles and success; 5) The debate to change two controversial state laws: Act 312 and the Urban Cooperation Act.

2. GOVERNMENT EFFICIENCY ISSUES: 1) Benchmarking local government best practices; 2) Potential changes to revenue sharing to fund specific services.

3. PERSONNEL ISSUES: 1) Potential savings and costs of public sector staff cuts; 2) Pros and cons of benefits changes -- increased co-pays and pooling across jurisdictions; 3) Pros and cons of moving from pensions to 401k-style benefits.

Seats are filling fast. Email us today to reserve yours.

The event will help harness and show off the creative energy and "cultural capital" Grand Rapids has developed over the years, said Joseph Becherer, director of exhibitions and curator of sculpture at Frederik Meijer Gardens & Sculpture Park. "This kind of gift tied to this kind of ingenuity can only mean something positive for Grand Rapids as it is now, but also helping to imagine Grand Rapids as it will be tomorrow," Becherer said.

"Intense Stare" was posted by mandj98.

Forty years ago, a group of Isabella County youth met with G.R. "Rollie" Denison, a local businessman and political leader, at Stan’s Restaurant in downtown Mount Pleasant for a cup of coffee and conversation.

As their bread toasted and eggs scrambled, the young men asked Denison about local politics.

Sid Smith said they looked up to Denison for guidance and, in return, Denison expected the youths to take a leadership role in their community. Denison died in 2003 at age 83.

"Rollie told me, 'Our leadership is growing older, and we are getting tired.' He wanted to teach us the ropes to take over," said Smith, now in his mid-60s. "We are looking forward to a new generation of ideas."

With Denison's teaching in mind, Smith – along with Isabella County resident George Dunn – established Isabella County"s Vision 20/20, a group dedicated to improving the quality of life. This year’s highlight will be a Banner Festival brightening downtown Mount Pleasant this summer.

Vision 20/20 began in summer 2007 with about 30 members, Smith said. It has grown to more than 150 members. As the initiative picked up momentum, younger community members joined to support it.

As first, there were two Vision 20/20 groups divided by age. The junior group and senior group each created a “top five” priority list.

The two groups discovered their areas of county focus were the same – intergovernmental cooperation, economic development, leadership development, quality of life and educational opportunities.

Five committees, made up of both junior and senior members, were established to carry out priority-focused improvement plans to bring Isabella County from “good to great.”

“Something that I learned from Rollie is that when you realize you can have an effect on something you care about, you naturally become a leader,” said Smith, president and CEO of Smith Equities Corp.

Vision 20/20 group plans include Isabella County beautification, bike paths and a school safety route for elementary-age children.

The new Safe Routes to School initiative encourages and enables students to walk or bicycle to and from school by having school-related adults, such as parents, acting as crossing guards and looking out for the children.

“We tested it at one school (Fancher Elementary School in Mount Pleasant) and it has had great response,” Smith said. “Not only is it for safety, it also gets kids exercising outside.”

Vision 20/20’s Quality of Life committee also wanted to create an Isabella County signature event to draw people to Mount Pleasant, the county seat. For almost a year, the committee has been planning a Banner Festival.

Banner Festival Chairman George Rouman, who raised all four of his children in Isabella County, said the 2009 theme is “Paint the Town.”

Every household in the county was invited to participate and there were more than 155 banner designs received. Banners were painted in late March and early April. They will dress up the downtown Mount Pleasant light poles from early June to mid-September.

On an April community banner-painting day at Mount Pleasant’s Veterans Memorial Library, Isabella County residents – ages 2 to 78 – drew abstract art, flowers, whistling faces and pinwheels on 3-by-5-foot vinyl canvases.

“We want to attract people downtown with these beautiful banners,” Rouman said. “We have great restaurants and shops in our historic downtown, and we want those to stay healthy.”

Smith said the involvement not only enriches Isabella County businesses but also also benefits the Isabella County neighborhoods and the people in them.

“There is so much going on to enhance and improve where we live. People are really getting excited. This is community involvement that would have made Rollie proud,” Smith said. “I know that I am.”

The latest effort to boost college accessibility is the naming of 10 Promise Zones this week in which students will be able to earn college scholarships through a mix of future tax growth and private donations. Modeled after the Kalamazoo Promise, the new Promise Zone communities include Baldwin Community Schools, Battle Creek Public Schools, Benton Harbor Area Schools, the City of Detroit, the School District of the City of Hazel Park, Jackson Public Schools, the Lansing School District, the Muskegon Area Intermediate School District, the School District of the City of Pontiac, and the Saginaw School District.

At the same time, two other new initiatives aim to help get students into college and get them Michigan jobs once they're finished. The "Michigan College Access Network" is scheduled to launch by fall and include a one-stop shop for applications, financial aid and other tools needed to get into Michigan colleges. And, the Detroit Regional Chamber and West Michigan Strategic Alliance have launced "InterninMichigan.com" to link jobs providers with talented college students.

At the same time, budget woes are intensifying reform discussions in universities and in local school systems. The national Public Agenda think tank released a new report this week suggesting that university financial officers see room for greater efficiency on campuses while faculty members fear an erosion in quality. (For a glimpse of how this plays out in Michigan, check out the University of Michigan's strategies for finding $55 million in efficiencies in recent years. Note: the U. is moving faster than state government in assuring health care benefits and co-pays reflect private sector trends.)

At the public school level, Michigan state schools superintendent Mike Flanagan is talking turkey to administrators and teachers alike, as evidenced by his comments at an education summit this week. As quoted by Gongwer:

Acting on the Center for Michigan's "School Daze" report about Michigan's shrinking school year, Flanagan recently led a state board of education call to return to a 180-day school calendar. The state House has passed language calling for districts to hold classes 170 days or more per year (which would cause more than a third to Michigan districts to boost instructional days). The Senate also is studying the issue. But south of our border, Ohio is considering going much further -- leaders are debating whether to force local schools to offer 200 days of classes in an effort to assure Ohio's students can compete globally.

Finally, freshman state Rep. Bill Rogers, R-Brighton writes in (as all legislators of both parties are encouraged to do) with an idea to invest stimulus money to pay for switching teachers from pensions to 401k-styled retirement plans....

As an elected official of the great state of Michigan, it is my job to ensure that the American Recovery and Reinvestment Act (ARRA) dollars being sent to the state from the federal government are spent wisely and responsibly which will ensure 1) job creation; 2) economic recovery which will be sustainable and realistic; and 3) reform Michigan's government to make us a better state in which to live, work, and play.

In these difficult economic times, I believe everyone needs to make some tough choices and "enter the real world". According to projections, it would cost the state of Michigan $200 million to make the initial switch from a state pension for school employee's retirement to a 401(k) plan.

With the federal government giving the state billions of dollars in stimulus money, I strongly believe that we should use that money to fund long term solutions, such as this imperative and necessary change. This reform is vital to the stabilization of our state budget and our local school districts. For far too long the state of Michigan has avoided making this responsible transformation, and the result has been apparent in our endless struggle to fund our children's education. The Michigan Legislature has been resistant to making this necessary reform in the past because of the massive short term hole it would create in our state budget, even though the long term benefits are undeniable. The federal stimulus allocation has given the state of Michigan an extraordinary opportunity to take action on this important piece of legislation. If we make this change now, the future of public education instantly creates opportunity for future teachers, sustainable funding for public education, and a brighter future for our children and generations to come.

I believe defined benefit retirement plans have plagued the state and local school districts for many years because of their extraordinarily high legacy cost. In the late 1990's, state employees made this much needed transfer and the result proved to be fiscally responsible and cost effective, both to employees and the state. 401(k) retirement plans provide employees with control for their own retirement planning goals, which has been particularly desired by state employees. As you know, Michigan is not in a position to guarantee any employee a particular number in terms of retirement. This is a prime opportunity for the state of Michigan to make this desperately needed reform that would allow us to prosper and provide scarce state dollars for our children's classrooms.

After the Michigan House passed a prison budget including a net $47 million cut (or 2.6 percent) below last year's levels, a group of senators the week rolled out what they called the "low-hanging fruit" in the corrections budget. As reported by Gongwer, the proposal would: 1) require teleconferencing of prisoner hearings to limit the cost of transportation; 2) establish conditions (including freedom from substance abuse) prisoners must meet before being paroled; 3) establish a strict conflict of interest provision for any company contracting with the department (SB 475*); 4) require competitive bidding for goods and services used by the department; 5) establish partnerships with medical colleges in the state to help treat prisoners; 6) require reports on the state's offender tracking system.

Now those may be fine, money-saving steps, but senators failed to even put the roughest guestimates of what these reforms would save. Senators appear a long way from passing the House-approved cuts. And, the upper chamber has yet to deal with numerous other prison reform possibilities presented by the Center for Michigan and a coalition of business, education and nonprofit groups all seeking hundreds of millions of dollars in prison spending because the $2 billion prison budget cut represents about one out of every five dollars in the state general fund and crowds out other strategic priorities for Michigan's future.

Those other potential reform approaches include...

1. PRISON CLOSURES: The modest budget cuts approved by the House require closure of several as-yet-unnamed prisons. The closure process is likely to be noisy and fraught with political fencing among vulnerable legislators. Support and momentum from corrections reform groups may be necessary to see this process through. Department officials told us in March that each prison closure can result in ballpark savings of more than $30 million. If additional prison closures are not approved, it is unclear how even modest reform savings would materialize. However, in a haunting display of how important the prison-industrial complex can be to small towns, locals are lining up to keep their local prisons and prison jobs.

2. REDUCE PRISON POPULATION TO THE GREAT LAKES AVERAGE: Savings from this reform total $390 million per year. Savings could only be achieved over time. Current administration efforts to reduce the prison population through increased paroles would adjust this reform figure downward by about $29,000 for each prisoner released through increased paroles. (SOURCE: "Budget Action Plan: Restructuring Options to the State Legislature for Transforming Michigan’s Budget," by Public Sector Consultants. August 2008. Page 6.)

3. GENERAL DEPARTMENT EFFICIENCIES: After holding hearings across the state, a Senate subcommittee declared it was "convinced that the Michigan Department of Corrections should be able to reduce its per-prisoner cost by at least 20-30 percent." At the low end, such a reduction equates to about $400 million per year. So, if senators believe their own report, why not pass a budget that includes a 20-30 percent cut and let the prison bosses figure it out from there? (SOURCE: "Final Report of the Subcommittee on Prison Reform and Public Safety." May 2007. Page 7.)

4. MOVE MEDICALLY INFIRM PRISONERS BEYOND PRISON WALLS: The general idea is to move dying prisoners to Medicaid-funded care and supervision beyond prison walls. Savings estimates vary and we have not yet found a clear documentation. The nonprofit Hope Network has proposed it can save $4.2 million per year for each 100 medically infirm prisoners. With roughly 500 such prisoners in the system, that’s roughly $20 million per year in savings. (SOURCE: Rough estimate of 500 medically infirm prisoners based on informal conversation with MDOC staff. $20 million savings estimate based on "Project Hope Pilot: An Alternative Model for Effective Re-Integration of Ex-Offenders in Michigan." November 2007. Appendix item titled "Savings with Hope Services – Medically Fragile.")

5. PRIVATIZE PRISON FOOD SERVICE: Savings of $10-38 million are possible if Michigan can match the daily prisoner feeding costs of some other states, namely Florida and Kansas, according to a 2008 Michigan Auditor General report. Corrections Department officials and some legislators dispute the accuracy of this assertion, citing numerous problems, specifically, with the Florida privatization model. (SOURCE: "Performance Audit of Prisoner Food Services," by Michigan Auditor General. June 2008.)

6. IMPLEMENT AUDITOR GENERAL EFFICIENCY RECOMMENDATIONS: Auditor General reports in the past two years have also detailed an estimated $37 million in annual savings through numerous management improvements, including excess prison guard overtime costs due to rigid work rules, undocumented transport costs, prison guard bonuses, prison guard dry cleaning allowances and other perks, potential savings from work and shift reorganization, and better price negotiations on goods and services. (SOURCE: "Performance Audit of Selected Personnel and Other Administrative Costs," by Michigan Auditor General, October 2008, and "Performance Audit: Prisoner Transportation," by Michigan Auditor General, December 2008.)

7. MOVE PRISONERS ELIGIBLE FOR DEPORTATIONS TO FEDERAL CUSTODY: House Bill 4130 would transfer some 200 prisoners to federal custody as they are under federal deportation orders. The House Fiscal Agency has not yet analyzed the bill. Original Gongwer reports in February suggested this approach could move 500 prisoners out of state custody. AT roughly $29,000 per prisoner, that’s $14.5 million per year. But reports suggest 200 prisoners are eligible at modest savings of $2 million per year. (SOURCE: Gongwer News Service.)

8. EMPLOYEE WAGE & BENEFIT FREEZES: The House-approved Corrections budget includes $35 million in "economic adjustments" -- $9.5 million in salary and wage increases; $6.9 million in insurance increases; $15.4 million in increased retirement costs; and $500,000 for increased workers compensation costs. Freezing these payments would require employee concessions and renegotiation of labor contracts approved in fall 2007. (SOURCE: House Fiscal Agency Analysis of Corrections budget approved by the House. April 2009.)

In this era of fiscal crisis, how do we assure Michigan's public sector provides the most bang for our shrinking bucks? What are the essential roles of the public sector when there isn't enough money to fund the way we've always done things?

Join local government experts and more than 100 engaged citizens and local business, nonprofit, education leaders who've already signed up for the Michigan's Defining Moment Government Efficiency & Accountability Action Group on May 13 from 8 a.m. to noon at the Kellogg Center in East Lansing. Seats are filling up fast -- email us today to reserve your spot.

The purpose of the event is to debate and refine a variety of efficiency reform ideas that are often bandied about the State Capitol but have not been acted upon. In the end, we seek to inspire work groups of committed citizens who will heighten the debate and push for legislative changes, and continue to develop new ideas and new ways of providing and paying for the kinds of high-quality public services needed to attract and retain talented workers and employers.

We will publish the full agenda for the Action Group meeting in next week's Fresh Thoughts newsletter.

For inspiration along these lines, consider the work of Genesee County Treasurer Dan Kildee, whose county-wide landbank and efforts to condense many broken Flint neighborhoods into fewer vibrant ones was featured in this week in the New York Times...

Planned shrinkage became a workable concept in Michigan a few years ago, when the state changed its laws regarding properties foreclosed for delinquent taxes. Before, these buildings and land tended to become mired in legal limbo, contributing to blight. Now they quickly become the domain of county land banks, giving communities a powerful tool for change...On many streets, the weekly garbage pickup finds only one bag of trash. If those stops could be eliminated, Mr. Kildee said, the city could save $100,000 a year — one of many savings that shrinkage could bring... Mr. Kildee was born in Flint in 1958. The house he lived in as a child has just been foreclosed on by the county, so he stopped to look. It is a little blue house with white trim, sad and derelict. So are two houses across the street... "If it's going to look abandoned, let it be clean and green," he said. "Create the new Flint forest — something people will choose to live near, rather than something that symbolizes failure."

By Tom Carr

High-speed commuter trains running several times a day from Detroit to Chicago and back might be in our not-so-distant future if state officials get hold of the federal stimulus funds they want.

If you're skeptical about that, you're excused. We Michiganders pretty much expect to see runways for pigs at Detroit Metro before we ever see integrated, multi-modal mass transit in the state.

Yet there's a rumbling on the proverbial tracks in the form of President Obama's stimulus package. The American Recovery and Reinvestment Act includes $8 billion to develop high-speed rail systems throughout the country. Add that to the usual federal transit bucks, and the state transportation official leading the charge said Michigan could have the line up and running within three years.

"The amount of money that's available, we could have the vast majority of the corridor upgraded for 110 mph service from Detroit to Porter, Indiana," said Tim Hoeffner, a Michigan Department of Transportation administrator overseeing the charge to get the project funded. Porter is 45 miles from downtown Chicago and is the end of the Amtrak-owned line. Beyond Porter, which is east of Gary, Ind., there's more intensive work needed on tracks, partly technical changes to allow the commuter line to coexist with the considerable freight rail traffic in the area.

"We're working with Indiana and Illinois to make improvements from Porter to Chicago," Hoeffner said.

Amtrak runs the Acela high-speed line on the East Coast and would operate the line proposed to run east-west and meet up in Battle Creek with a commuter line running from Port Huron via Lansing.

Hoeffner figures the initial upgrades to existing terminals, trains, track and crossings – as well as design and purchase of new trains – would take somewhere between $300 million and $400 million.

MDOT has dusted off five-year-old ridership and cost estimates, as well as engineering needs in order to put in a good showing for the state. Those figures were last updated in 2004, when Congress authorized funds but did not follow through and appropriate the money. State officials are getting ready for when the Federal Railroad Administration releases application guidelines, probably in June.

Economic benefits

There are plenty of reasons for a state built on autos to catch up with the rest of the country on mass transit. As the car industry and other manufacturing reels, many are looking for ways to encourage other types of economic development. Mass transit is popular among young professionals and can help entice them to remain in the state after graduating from the state's colleges and universities.

Cities that have greatly improved and developed new transit systems in recent years – including Portland, Ore.; Charlotte, N.C.; Dallas; Minneapolis and Denver – have seen rushes of commercial and residential development within walking distances of stations. They've also benefitted from the creation of thousands of jobs, such as tech industries that have blossomed near Portland's Westside Max line. Property values near the terminals have meanwhile risen faster than those in other areas of the cities.

"When they survey people leaving the area, one of the reasons they give is the lack of ability to get around," said John Swatosh, deputy director of the Regional Transit Coordinating Council, an agency planning transit systems for the city of Detroit and Wayne, Oakland and Macomb counties.

If it's going to happen, this just may be the time, said state Rep. Marie Donigan, D-Royal Oak.

"It's like getting two appropriations in one year," said Donigan, a member of the House Transportation Committee. Because Obama has said rail development will be a priority, she also believes it's not just a one-shot deal.

Sure, there's a line for the money. There are 11 corridors ripe for high-speed rail development in the country, with initiatives in California, the East Coast, the Gulf Coast and other areas.

On top of that, the Detroit-Chicago line is just one of several proposed stretches in the Midwest.

Hoeffner expects all the projects around the country to get something.

He believes Michigan will fare well because the Midwest Regional Rail Initiative, a coalition of area states seeking the money together, has states supporting each other.

"There are constraints as to how much can go to one area," he said. "I don't believe there's enough to go around, but I believe that because of the work the Midwest partners have been doing, we can put forth a very good case as to why the money should come to the Midwest."

Not just bullet trains

The Motown/Chi-town line would allow trains to travel up to 110 mph -- not quite the 220 mph trains of some countries. But the point is that the plan would triple the daily round trips between the two metropolises from three to nine. It would also cut the time of the trip from the current 5 hours, 36 minutes down to 3 hours, 46 minutes with about 10 quick stops along the way.

The important thing is not the top speeds, but the average speeds, which affect the length of the trip, Hoeffner said.

Rapid interstate lines are only part of the picture. Planners and advocates say the state needs "multi-modal" transportation. That's a blend of long-distance and short-distance rail lines, along with efficient buses.

And there are several attempts in the state to see that people can easily ride across town, across the state and distances in between without the hassle and expense of parking and gas.

Grand Rapids leads the state in rapid bus planning with the help of $32 million from the Federal Transit Administration, plus a pledge from the state to match 20 percent of that. By 2012, the Furniture City expects to have modern buses cruising through exclusive lanes, sending signals to traffic lights so they won't need to stop along with the car traffic. Citizens will wait in modern, relatively comfortable shelters with displays to tell them exactly how long they’ll have to wait until the next bus gets there.

The Rapid, which plans the service that will be known as the Silver Line, will ask voters on May 5 to increase their property taxes by 0.16 of a mill to help operate the system. The agency has waged three successful millages so far, spokeswoman Jennifer Kalczuk said.

Meanwhile, a 3.4-mile light-rail line along Woodward Avenue in Detroit will be operated by the non-profit M1 Rail organization. The $100 million-plus project, much of it paid through private sponsorships, will take passengers between New Center and Hart Plaza. It will connect the riverfront, Comerica Park, the Detroit Institute of Arts, Wayne State University and other destinations. Targeted to open by spring 2011, the project was conceived by the Regional Transit Coordinating Council.

That line will link to the existing Amtrak station at Woodward and Milwaukee that is planned to connect the city with Detroit Metro Airport and Ann Arbor. The Southeast Michigan Council of Governments is working on that project along with MDOT.

Playing catchup

While the United States is behind several other industrialized nations in rail travel, there are many U.S. states and cities that ride circles around Michigan.

The East Coast has been riding its Acela line, a high-speed hookup between Boston and Washington, since the beginning of the decade. The system passes through New York City and Philadelphia and has gained riders each year, although it has seen recent dips due to the economy, said Amtrak spokesman Marc Magliari.

Denver is a shining example of what a comprehensive, multi-modal system can do for a city and its suburbs, said Swatosh of the Regional Transit Coordinating Council.

"If you went there 12 years ago and then went back now, you wouldn’t recognize it," Swatosh said. The most startling difference has been in the core city, which was decaying during the 1990s but has seen commerce start to thrive after instituting three rail corridors, high-occupancy vehicle lanes and other improvements in the past two decades.

String of dashed hopes

Of course, Boston, New York, and Chicago have had famous systems within their cities and suburbs since the early 20th Century. Conventional wisdom has held that Detroit is too entrenched in the auto. The city that put the world on wheels was also largely designed around the car.

There have been repeated efforts to change that, but they've always come up short.

Political disagreements killed attempts to develop a subway system in the 1920s and '30s, a precursor to the kinds of fractured support that doomed efforts to rebuild a system from the 1960s through the '90s.

Despite that, a thriving trolley and bus system blossomed in Detroit throughout the early 20th century. The city's population was peaking in the 1940s, coinciding with the glory days of its transit system. The city's buses, street cars and commuter trains had a ridership of 490 million per year that decade.

Yet 1951 saw a two-month transit strike that ate into those numbers. And the trolley system ceased operation in 1956 after 93 years.

Dozens of attempts to replace or rebuild have risen and fizzled.

One of the only new systems to come aboard in the decades since is downtown Detroit’s 2.9-mile People Mover, which began operation in 1987. It was to have been part of a larger Southeast Michigan regional system but was downsized partly because of local disagreements and loss of once-committed federal funding.

Proponents believe the old political barriers will not hold the projects down anymore. For one thing, the different municipalities in the Detroit area are working together like never before. And there are more projects throughout the state with voter, business and government support.

Yet not only is there a greater opportunity right now to expand to large-scale, complementary systems, there is also a greater need as the state struggles to find a way out of the economic cellar and Detroit remains the only major city in the nation without rapid transit.

Mass transit is expensive, no doubt. Light rail, for example, averages $35 million per mile to develop.

Yet every $1 spent on the systems brings an estimated $6 to the local economy, according to the American Public Transit Association. In Dallas, Portland and other cities, their stations have become magnets for new restaurants, shops and condos and even some tech-related industries.

Mass transit also saves money for the riders. The cost of owning, operating and insuring a car averages $8,000, while the average annual transit pass costs about $800, says the U.S. Bureau of Labor.

Not to mention, riding with others reduces greenhouse gases and dependence on foreign oil.

And of course, it allows riders to work, read or use their cell phones without being a traffic hazard while going to and from their jobs.

Catching a train?

It remains to be seen how much federal money Michigan gets and how far that goes.

Hoeffner would like to see the state get the entire $300 million or more.

"I think we can make a good case for it," he said.

Donigan is also optimistic.

"We do think we're ahead of the curve," she said. "A lot of background work has already been done on the Midwest coalition."

As icing on the cake, Donigan, Hoeffner and others also want to see if the trains and passenger cars can be built in the state. State rail backers, unions and lawmakers are checking to see if there are existing factories or businesses that could take up a task like that.

"We don’t make Amtrak cars in this country," she said. "There's no reason we can't build these things, not only in the U.S., but in Michigan. If we can create some manufacturing jobs as part of this whole deal, that would be swell."

The time may be right from a demand side, in addition to the federal-money-supply side.

Nationwide, voters in November 2008 approved more than 75 percent of state and local transit-related ballot measures, states a report from the Center for Transportation Excellence.

In the case of the Detroit area, there's also unprecedented cooperation from the various local governments, Swatosh said.

"There's awareness that we need it," he said. "We're in the biggest financial trouble we've ever been in, and transit is an important part of a regional economic plan."

As the newsroom erupted and champagne flowed, Free Press staffers reported the celebration on their Facebook pages faster than the newsroom collectively reported the news on freep.com. They posted dozens of pictures. They gave blow-by-blow reports of the newsroom speeches.

It was akin to the other recent inside-the-newsroom reports as the Ann Arbor News decided to shutter. Beyond the official, staid, boring, and incomplete corporate reporting on the situation in the Ann Arbor News, former News staffer Jim Carty carried a transcript of the staff meeting on his blog.

Pretty explicit examples of how the Web has eroded newspapers' near-exclusive local reporting franchise.

If the decline of Michigan journalism worries you, join the crowd. Literally.

On May 11, Michigan State University will host "In Search of a New Journalism" a day-long gathering of journalists, academics, and readers to discuss what grows out of the current creative destruction. Details are still coming together, but preliminary speakers include...

Amber Arellano: Detroit News, writes a weekly Monday online column
John Bebow: Executive Director, The Center for Michigan
Bill Emkow: Editor-in-Chief of MLive.com
Jonathan Morgan (MODERATOR): Multiplatform Editor at the Detroit News
Aaron Olson: MSU journalism student
Clare Ramsey: Managing editor of ModelD
Prof. Joe Walther: Comm MSU, Information Studies & Media

If you'd like to join in, send us an email and we'll let the organizers know you're coming.

But, as the Michigan Court of Appeals, basically declared the death of the Cobo deal, other kinds of fresh and vibrant economy are growing outside Metro Detroit's many silos like flowers growing in the charred remains of forest fire.

Venture capitalists, private-equity folks and other big-time money managers -- 350 of them altogether -- crowded the Wayne State University campus a couple miles up the road from tired old Cobo to talk about "bullish" prospects for Michigan entrepreneurs.

Leading journalist Matt Roush hosted a packed room of entrepreneurs at a "Sectors of Promise" gathering to discuss life sciences, university-driven research and other promising sectors that may rebuild a more diversified Michigan economy.

And at "TechNow09" tonight in Royal Oak, the kind of young, hip, highly educated workers policymakers lust for will "celebrate Michigan's transition to a knowledge economy." Tech firms. Software firms. Mobile marketing firms. Online services firms. Small firms. Growing firms.

Old Detroit. New Detroit.

Governor Jennifer Granholm appointed him State Superintendent of Public Instruction in May, 2005, making him the most powerful educator in the state --in principle, anyway. It was one of her very best appointments.

Mike is a very nice guy, thoughtful – almost scholarly. He has a pleasant, modest air about him. Unusual for people of high rank and power, he is a gifted listener. I don't think I've ever heard anyone make a nasty remark about him.

That said, underneath that mild exterior lurks a fierce will … and a well-developed capacity for figuring out how to get very difficult things done. There are lots of examples. Almost exactly three years ago, Governor Granholm signed into law a new high school curriculum that is widely regarded – and highly praised – as one of the most demanding in the country. To graduate, Michigan students need Algebra I and Algebra II, three hard science courses, four years of English and an online learning experience.
Nobody ever thought that public schools, institutions which tend to fiercely resist change – would ever tolerate big-time reform meant to drag their curriculum kicking and screaming into the 21st century.

And nobody EVER imagined that he could stop the Legislature, so often the creature of well-entrenched in special interests, from exercising their instinct to severely water down the new curriculum.

But Mike Flanagan got it done. He did it patiently, almost respectfully, step by step, month by month. And Michigan now has the nation’s leading curriculum to prepare our kids to compete in the economy of today -- and tomorrow.

Most recently, he then appointed Robert Bobb, a tough, no-nonsense city manager, to the powerful position of Emergency Financial Manager for Detroit Public Schools, a system legendary for incompetence and near-criminal mismanagement.

As you might imagine, Flanagan took a lot of flack over this one. But he is persevering, and the early reviews of Bobb's performance are overwhelmingly positive.

To find out what's next for our schools, last week I sat in on a State Board of Education meeting in Lansing. There was Mike, patient and responsive as ever, answering questions from members of the State Board about something called "Project Re-Imagine."

Now over the years I've seen a lot of "re-imagining" projects. They tend to crop up with great fanfare and produce little of substance. So I regarded the agenda item with only faint interest.

But then I read the material. The Michigan Department of Education "will select up to 20 school districts to become Demonstration Districts committed to dramatic district-wide reform to significantly improve learning for all students," it said, adding, "While Demonstration Districts would be expected to adopt a set of expected outcomes and required core components, they would have significant latitude in shaping their reform initiative."

Pre-school programs to prepare all young children for school will be required by 2011-12. Kids who do well in high school will be encouraged to get to college early. The phrase "increased learning time" suggests nothing less than a willingness to go beyond 180 days of school -- an unofficial national standard almost all Michigan districts fail to meet. Also included is a section calling for "Reconfigured compensation systems, including pay for performance and pay for hardship areas."

Wow!

In short, Mike Flanagan is setting out a radical plan to fundamentally improve our schools. Nor is he doing it by the standard top-down bureaucratic method. He's defining quality improvement outcomes and trusting creative local superintendents. And he's prepared to go where angels fear to tread: Teacher merit pay, more days in school, site-based school management.

Plainly, his plan is to designate a few "Demonstration" school districts and hope they make so much progress others will speedily follow. He's hoping to coax some stimulus Obamabucks from the feds to help fund all this. And he's counting on parents, employers amd us to realize that radically improved schools are in everyone's best interest.

The audacity of all this takes my breath away. I don't know whether it's going to work, but based on Mike Flanagan's performance, I wouldn't bet against it.

***
Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power's own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

"The fiscal situation should at least get the public thinking about one possibility: Passing a proposal that will be on the 2010 ballot to call a convention to write a new state Constitution," the Freep's Ron Dzwonkowski wrote this week. "Let the current officeholders deal with today while a new group meets to draw up a framework that will better serve the Michigan of tomorrow, in terms of government, education, regulation and taxation. Our 1963 Constitution fills nearly 60 pages and has been amended about 30 times. It's due for an overhaul, just like the state it's supposed to serve."

Other groups -- namely the Michigan Chamber of Commerce and Michigan Education Association -- are lining up to fight any convention push.

The many facets of the Constitutional Convention discussion are well-covered in a recent story in Dome Magazine...

"If voters approve a Con Con, some of the issues... that could end up fodder for a rewrite include permanently lowering wages for elected officials, trimming the size of the courts and redrawing legislative districts. Other possible ideas that could take center stage: abortion rights, the death penalty, the sales tax cap and graduated income tax prohibition, Headlee tax limits and other Headlee issues, public school district consolidation, elimination of township government, restoring affirmative action programs, same-sex bans, physician-assisted suicide, legalization of drugs, allowing public aid to non-public schools, and school funding equity issues."

A Con Con would be a heckuva barn burner of a debate. But would it result in a better Michigan?

"Lift Off" was posted by mandj98.

Just like the checkbook choices at many kitchen tables in Michigan, state government's options for reform are tough, painful, hard to swallow. But not impossible.

The Center for Michigan has compiled a list of more than $1.5 billion in hard choices for budget cuts and reforms to the way Michigan's public sector does the public's business.

CLICK TO READ FULL ARTICLE

The State Board of Education passed the following resolution this week:

Mr. Austin moved, seconded by Mrs. Bauer, that the State Board of Education commends the Michigan House of Representatives for taking the first step in the recently passed School Aid budget (HB 4447) that includes 170 days and 1,098 hours. The State Board of Education recommends the Legislature require 180 days and 1,098 hours of pupil instruction for schools using a seat-based model of education, while allowing for the continuation of waivers of such days and hours by the Superintendent of Public Instruction to explore and promote innovative educational models. The vote was taken on the motion. The motion carried unanimously.

The school aid budget passed by the House would impact the 41 percent of Michigan public school districts and public charter schools that held fewer than 170 days of instruction last year, according to official state data cited in the School Daze report.

Should the legislature follow the state board's request to return to 180 days of instruction, nearly every school district in the state would be required to beef up its days of instruction, which have almost universally dropped below the general national standard of 180 days in recent years, as the School Days report illustrated.

The School Days report continues to stir debate in local communities about the length and intensity of the school year. Three examples:

This from an editorial today in the Lansing State Journal... "As Lansing parents convene tonight to discuss the number of buildings to stay open, they should consider a few other figures (drawn from the 2007-08 school year): Number of days scheduled - 174 Number of days held - 170. Number of hours of grade school instruction - 1,045. Is that really enough to be competitive?"

This note of thanks from Kathleen Moore, president of the Battle Creek Lakeview School Board... "Our superintendent works very closely with her colleagues in Calhoun County and they all feel very strongly about this. We will continue to do all we can. What we want is a school calendar that is best for student learning!!"

And this from Jamie Yeomans, the wife of a Michigan teacher... "I am married to one of the most dedicated, hard-working teachers in this state and do not appreciate petty attacks on his profession... For example, my husband's district is inundated with Korean students every year whose families move to the US for a single year to immerse their children in English and benefit from the innovative instructional techniques that are offered here. It may surprise you to learn that the average student in Seoul, South Korea may attend school 200 hundred days of the year, but are physically present for far less time than our students right here in Michigan."

Add your views here.

Here's where things stand...

MODEST REFORMS PASS THE HOUSE

The 2009-10 Corrections budget passed the House of Representatives on April 3, with the governor’s recommendations largely intact. You may remember the original headlines a couple months ago about more than $100 million in prison cuts. Turns out that’s a GROSS number. The NET general fund budget reduction for Corrections as passed by the House, is a cut of $47 million (2.6 percent). Highlights:

RESISTANCE TO PRISON CLOSURES MAY BREW IN THE SENATE

One key question now is whether the Senate will block prison closures. Particularly keen opposition may come from law-and-order Republicans as well as Democrats with prison facilities in their districts.

If the Senate – in conjunction with the House – does not approve additional prison closures, it is unclear how even modest reform savings would materialize. Without Corrections savings, the budget pressure only increases on a wide range of other strategic priorities for Michigan's future.

The view of one prison system insider who asked to remain nameless given the sensitive nature of the negotiations.... "It's ridiculous the amount of money we could save if we could get people off of lock-solid philosophical positions." Those "hundreds of millions" of savings are possible through sentencing reform, housing medically fragile in Medicaid-funded facilities outside the prison system, and prison closures.

CORRECTIONS EXECUTIVES NOT WAITING FOR LEGISLATIVE ACTION

Prison bosses are moving forward with various belt-tightening measures absent further action in the capitol. On the governor's direction, the state parole board expanded this week, with goals of speeding paroles and keeping prison populations in check (the system is already down several thousand prisoners from projections). But a number of additional management tools await legislative action.

Glazer's latest work comes on the heels of a special talent issue of the Detroit Regional Chamber's magazine. Likewise, Metromode.com just illustrated how the young professionals who stay in Michigan, can quickly gain rank and voice in the efforts to pioneer a new state. Metromode's story, Young Guns in Metro Politics, profiled several young leaders on the rise...

"Everyone I spoke to described being at a frustrating intersection of change and need. 'Change' is no longer a luxury or slogan, but something absolutely essential to Michigan's economic survival, and 'need' means fewer of the resources required for risk taking than ever."

French, one of the best journalists remaining in our rapidly shrinking newsrooms, revealed the following:

And if you think the outflow is limited to our two biggest and somewhat "elite" universities, think again. A survey of all 2007 Michigan public university graduates conducted by Michigan Future, Inc. found that half left the state within a year after graduation.

What's happened with the economy and the auto industry since then would suggest that figure may be even higher today.

Five years ago, the governor appointed a special commission on Higher Education and Economic Growth. Led by Lt. Gov. John Cherry, (and usually called the Cherry Commission) it was a high-powered group gathered to study and chart a course for the state’s future. It set one major goal: Doubling the number of college graduates in Michigan within a decade.

Since then, the number of graduates has increased slightly to 41,250, up from 38,615. But it is nowhere near the pace the Cherry Commission hoped. And the swelling numbers of new degree holders fleeing the state has overwhelmed and canceled any gains.

Michigan Future President Lou Glazer has been arguing for years that a state's competitive position is largely determined by the number of college graduates in the population. Study after study has confirmed his thesis. "If we don’t keep those young, highly educated Michiganders," Glazer says, "we'll get poorer and poorer because we simply won't be able to complete with other states."

So how come so many young, newly graduated Michigan kids decide to pull up stakes and leave home? When I ask, most young people simply say, "There's nothing here for me." That's probably true, given our current 12 percent unemployment rate. That will, eventually, turn around.

But the roots of the problem go much deeper.

Partly, our problems stem from the culture that grew up with the automobile industry. For decades, the idea was that all you needed to do was get a high school diploma and catch on with Generous Motors to assure your economic future. That's all over now, but the habit dies hard.

Another part of the problem: The scanty number of exciting, high-tech start-up companies in the state. Comparing the tolerance for risk in Michigan’s business culture with, say, Silicon Valley is illuminating. Aside from the companies in the supply chain, it’s hard to find many technology-driven new companies spinning out of our auto industry. But go to the Stanford University campus in Palo Alto and you'll find lots of entrepreneurs who bear it as a badge of honor that they started two, three, four companies which went bust … and then hit a home run on the last one. And you’ll find lots of young people excited about a career with such an outfit.

So what to do?

Obviously, Michigan needs more people with college degrees. The state does now offer a $4,000 grant toward college graduation. Beginning with high school seniors who graduated in 2007, about 100,000 students received this stipend, which can be used at any post high-school institution, public or private.

But lots of college graduates flee the state, often without even trying to find a job here. The Detroit Regional Chamber of Commerce will put up later this year a site – www.interninmichigan.com – linking college students with internships with Michigan employers.

A high percentage of young people who take internships upon leaving college go on to begin their careers with the same employer, so this site is a good first strategic step.

Another approach comes from the too much derided "Cool Cities" program, launched by Gov. Jennifer Granholm during her first term. So far, the state has handed out $4.6 million to 48 communities around the state. The idea is simple: Many young people decide where they want to live before they start looking around for a job.

Thriving, vibrant, diverse communities are attractive to young people, whether we call them "cool cities" or not.

Another program, MichAgain, is aimed at Michiganders who had left the state but who might be induced to return. Some evidence suggests that many young people figure Michigan is a great place to come home to live and raise a family after sowing their wild oats in Chicago. MichAgain unfunded as yet, but it could prove valuable.

But at the end of the day, Michigan's attractiveness to young people will define the number of college grads who stay. This has as much to do with the quality – and affordability – of life here in Michigan. So our woods and waters, our arts and culture, our cities and our universities are all vital in the competition for brains.

Sadly, you don’t find many policy-makers in Lansing focusing on this. Witness Gov. Granholm's proposal to zero out the pittance -- $6.3 million – budgeted for arts and culture.

Our demography, to a great extent, defines our future. The bottom line: If we cannot retain our brightest and most highly educated young people in Michigan, we’ll have a state whose people are poorer, older and increasingly denied the prosperous future we need in the years to come.

***
Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

By Monetta Harr

JACKSON -- As visitors wind their way through solitary confinement cells and underground tunnels in the historic Jackson State Prison, Judy Gail Krasnow tells stories of prisoners like Harry Evans, who wrote poetry under the name "John Blood" and read it on the radio on Sunday mornings.

"Isn't that creepy?" asks Krasnow about the man who served time for bank robbery and larceny in the early 20th century.

Krasnow is not only an artist who lives in the newly created Armory Arts Village in what was the historic prison just north of downtown Jackson, but she takes visitors from around the world on tours through the facility.

A 25-foot-high turreted stone wall still surrounds much of the area that was built as the Jackson State Prison in 1839. But today, there are 62 one-, two- and three-bedroom apartments, many with 18-foot-high ceilings. The apartments stay extra warm in winter and cool in the summer because of 3-foot woven steel walls built so prisoners couldn’t dig their way to freedom.

The $10.6 million project is a creative example of urban development, turning eyesores into cultural opportunity. Jackson converted an abandoned industrial complex on the Grand River into a center for arts and culture that also includes housing and retail businesses. More than $8 million has been raised from foundations, donors, tax credits, a federal home loan and community development block grants.
The project received the 2008 Governor’s Award for Historic Preservation, which recognizes outstanding historic preservation achievements preserving Michigan communities.

Armory Arts Village has been open to residents since January 2008. It is a Michigan State Housing Development Authority project, which provides affordable housing for folks whose income is below the local median income.

Meanwhile, artists work in studios and classrooms in the Village. There are 11 shared studios, which artists use for painting, sculpting, clay work and writing. Some of their work is displayed in an auditorium that once held four levels of cells. They were removed in 1945 when the new prison was built north of town and the National Guard Armory took over the facility. The Guard moved to a new training site in 2006.

"Our hope is it will be a destination for tourists and drive new tourism money into town,” said Mindy Bradish, president of the Greater Jackson Chamber of Commerce. It also provides new opportunities for local residents to learn about and enjoy the arts.

Spearheaded by the Enterprise Group of Jackson, the Armory Arts Village is located only four blocks north of downtown Jackson, within one of the state's tax-free Renaissance Zones.

And now the second phase is set to begin this summer, after Excel Realty Group received a tax break from the Jackson City Council that will save it $5.5 million over 35 years as it invests $6.5 million in Armory Arts Commons, 88 townhouse-style apartments for people ages 55 and older. And in the fall, the Grand River Arts Walk will be constructed between the village and downtown to make it even easier for pedestrians to get back and forth to shop, eat and enjoy movies in the downtown historic Michigan Theater.

Across the parking lot from the Village in remodeled factories are a series of small shops that exhibit and sell paintings, jewelry and many other handcrafted items. Other shops host dance classes and serve as galleries, as well as offices.

"There's a lot of interest outside the community, people wanting to visit Armory Arts Village," Bradish said. "I see it definitely becoming a factor in our tourism."

Through Michigan’s Defining Moment (MDM), your voice is making a difference in the future of our state.

We need your continued input to build a common ground citizens agenda for Michigan’s future – a nonpartisan/bipartisan issues agenda that can become the cornerstone of discussion in the statewide elections in 2010.

On May 13, 2009, from 8 AM-noon (with optional lunch and discussion from noon to 1 PM) at the Kellogg Center in East Lansing, we will hold our first MDM Action Group session on government collaboration and accountability.

We’re inviting community leaders and engaged citizens from across the state to join us in this action-oriented morning session to:

• Hear expert nuts-and-bolts proposals to maximize the efficiency and accountability of Michigan’s government and education systems and learn of local collaboration success stories worth replicating across the state.

• Interact with policy leaders and prioritize reform proposals to address ways in which the public sector can be most effective in this age of limited resources.

• Sign up for brief-but-effective volunteer activities to help assure leaders in Lansing focus on common ground reform efforts raised by citizens all across the state in the Community Conversations.

We are excited that innovative leaders in government collaboration and accountability will present their views on how best to move Michigan forward. Our speakers include:

• Mike Flanagan, Michigan’s Superintendent of Public Instruction
• Kevin Prokop, Chair, Legislative Commission on Government Efficiency, and partner in Rockbridge Equity Partners LLC
• Paul Tait, Executive Director, Southeast Michigan Council of Governments
• And local officials who will outline how their success stories on intergovernmental cooperation could be expanded elsewhere across the state.

Please join the Michigan’s Defining Moment team on May 13 in East Lansing. As space is limited, please RSVP by April 30 to Laura Braun at lbraun@pscinc.com. Please indicate whether you will be staying for the optional lunch.

Directions to the Kellogg Center are at http://www.hfs.msu.edu/kellogg/about/location.html.

"Just Above the Clouds" was posted by Sunrise Penny.

By Chris Andrews

GRAND RAPIDS

Around these parts, Carmen Gehring has become known as the server who sealed the deal. The waitress who won over Priceline – and helped snag hundreds of jobs for West Michigan.

But truth is, Gehring isn't entirely ready to take the bow. She's talked up Grand Rapids so often that, well, she doesn’t really remember the particular conversation.

"We get a lot of travelers, and a lot of times, they’ll say, 'This is my first time to Grand Rapids. It's really nice here,'" Gehring said during a break on a recent afternoon shift. "We'll talk about some of the great things about the city and some of the people who continue to put money into the city. I talk about how clean it is, how safe it is, how we are 30 minutes from the lake (Lake Michigan). We are a couple of hours from Chicago, if you need to go to Chicago."

Priceline picked the nearby city of Wyoming over 100 other communities last year for a call center for booking.com, its international online hotel reservation operation. The center opened last fall in the old Siemens Dematic office building and has about 50 employees.

The long-term plans call for about 425 jobs and $7.7 million in investment – a commitment especially welcome in these challenging economic times. It was one of the biggest deals in recent years.

Landing Priceline was a team effort, to be sure. State and local leaders put together an economic development package, including tax incentives, to help win the project.

But Priceline officials also make a point of soliciting person-on-the-street impressions of communities they are considering. Or in this case, waitress-at-the-table observations at dinner during their site visit. Officials cited her enthusiastic endorsement as a factor in their decision. Based on Priceline's recollection of the conversation, folks have concluded the server was probably Gehring, although she says others are equally enthusiastic.

A native of Idaho, Gehring, 36, has lived and worked in West Michigan for a dozen years. While attending Boise State University, she became friends with a group from Grand Rapids, heard good things, and moved back to Michigan with them. She’s been talking up the area ever since.

At Tre Cugini, a fine dining Italian restaurant in downtown Grand Rapids, she often serves out-of-town business executives staying at the J.W. Marriott or the Amway Grand Plaza Hotel. She touts the arts at DeVos Performance Hall, concerts and sports events at Van Andel Arena, cultural opportunities at the city's museums.

And she is decidedly upbeat about the city's future.

"If you look around at the skyline, you keep seeing these big cranes that are up in the sky, so you know there is building going on," she said. "You can tell that people have not given up. They have plans. Things are in the works."

Gehring's spirit embodies the pride that most West Michigan residents feel in their community, said Tim Mroz, senior director of communications for The Right Place Inc., the economic development agency that helped put the Priceline deal together. He noted that there are multiple discussion groups on Twitter, Facebook and online blogs touting West Michigan as "a beacon of light in this state and this economy."

"It's our job as economic developers to put these deals together to help companies find the right fit in a community, but it is everybody's job to sell West Michigan," he said.

"You never know who you are going to meet on the street. When someone asks you for directions, it could be a company locating here. The next time you're in an airport waiting for a plane, it could actually be a company looking at Michigan."

***
Stimulus Spending Watchdog Needed: California Gov. Arnold Schwarzenegger has appointed an inspector general to sniff out fraud and incompetence in the ways our largest state will be spending stimulus funds. California will get something like $50 billion in stimulus money from the feds. Accordingly, the "Ahrnaald" has asked Laura Chick, the retiring state controller, to take the position.
Governor Jennifer Granholm ought to follow suit. Michigan will be getting around $7 billion in stimulus funds from Washington, and the chances of ineptitude, if not outright skullduggery, are just as great here as on the Pacific Coast. After all, if our governor can create a council to advise on privacy issues and best practices to protect privacy, she certainly can appoint someone to look over the shoulders of folks who are handling and forking out all the dough coming from Uncle Sam.

Budget Crisis? Ho Hum. According to last week's revenue estimating conference, Michigan's tax revenues will come in around $1 billion less than originally forecast. That’s on top of a state general fund budget with another billion in built-in, or structural, deficit. So, how to balance the books? Republicans want an across-the-board 5 percent cut in state spending, which at least has the advantage of not requiring anybody to distinguish between more and less important things to cut.
Democrats admit spending needs to be cut, but are having trouble figuring out where. Various research groups – the Citizens Research Council, Detroit Chamber of Commerce, Detroit Renaissance and The Center for Michigan – have previously issued compilations of targeted cuts that total more than $1.5 billion. Topping the list is prisons. Michigan is one of five states that spends more on warehousing felons than on educating people in public colleges and universities. And the Department of Corrections budget, now $2 billion, has grown faster than any other area of state spending. A coalition of groups, including business, education, municipal government, not-for-profits and Realtors, has called for "hundreds of millions of dollars in reduced spending." The governor has called for $120 million in cuts, which is a good step, but only a first one. Much more needs to be done.

But everybody's left Lansing for a couple of weeks, presumably to think more deeply (ha!) about the impending crisis.

***

We're Not So Bad Off, After All: The Chicago Federal Reserve Bank has issued a report showing nearly all the Great Lakes states are in financial trouble, many of them worse off than Michigan. Illinois is facing a budget deficit ranging from $9 to $11 billion, with another $4.5 in unpaid bills, according to the state comptroller. Wisconsin is looking at a $5.9 billion deficit over a couple of years. Iowa looks better, but legislators there are hacking away at the $6.2 billion budget suggested by Democratic Gov. Chet Culver. And Indiana says it has a $1.5 billion surplus, but unemployment there is edging toward 10 percent. And Republican Gov. Mitch Daniels is proposing an 8 percent cut in the two-year, $28 billion budget.

***

Two Bright Spots: Along with the spring flowers, we got two pieces of good news last week.
Robert Bobb, the Detroit Public Schools' emergency financial manager, has bitten the bullet and actually proposed attacking the district’s estimated $300 million-plus deficit. He is suggesting thousands of layoffs; closing more than 50 schools. I knew him years ago when he was a very capable city manager at Kalamazoo. He's a perfect example of the right man in the right place at the right time. And Michigan students are showing gains in math, according to recently released MEAP test results. Sadly, language and reading scores didn’t show much improvement. Much of the progress has to do with gradual phasing-in of the state's tough new school curriculum that requires advanced algebra, among other things. Now if school district officials could actually find ways to get kids in class for the old required standard of 180 days …

***
Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

The Center for Michigan has listed some $1.5 billion in possible savings that could be obtained without an increase in taxes. Reform-minded Michigan legislators can also look to their peers elsewhere around the country for guidance on how to bite the bullet and make the tough budget decisions this year. A few noteworthy examples...

Connecticut, Florida, Hawaii, Nevada, Maine, New York, Ohio, and Utah have all proposed pay and/or benefits concessions from state government workers.

Many states are proposing prison reforms. In California, a panel of federal judges recommends releasing 57,000 nonviolent offenders to obtain a savings of $800 million per year. Kansas, Kentucky, Montana, New York and Pennsylvania are considering loosening drug laws and increasing drug treatment to lessen prison costs. Utah plans a 12 percent cut to the Department of Corrections (the equivalent in Michigan would be a quarter billion dollars per year). Colorado, Nevada, and New Hampshire are considering closing prisons.

To hold Michigan legislators accountable to the tough decisions made by their peers in other states, visit the National Council of State Legislatures.

Beyond the general guffawing about school districts generally reacting as if they'd never seen an April snowflake before, and the fact that thoroughfares ranging from country roads to highways were perfectly clear from dawn on, we put pencil to paper and calculated the cost of the lost educational services to the average family.

As The Center for Michigan just noted in our new report -- "School Daze: Michigan's Shrinking School Year" -- Michigan school districts are not required to make up snow days. In fact, the average district cancels -- and never makes up -- a full week's worth of school each year for reasons ranging from snow to bomb threats to high school sports playoffs. Yet educators still get paid for that lost time.

If you're lucky enough to be part of a middle class working family in Michigan today, a reasonable estimate for what you pay in property and sales taxes for schools is about $5,000 per year.

So, on top of whatever you paid in extra day care, or suffered in lost wages Monday because the kids had to stay home because of a couple inches of snow, you also lost about $30 in taxes paid for educational services your kids will never receive.

The immediate reaction in many corners is a wholesale shaking of heads because the plan would require a 1.2 percent hike in the state sales tax. But before we all get to the nasty funding question, we have to seriously consider the context for the proposal.

First, reams of research led states to greatly expand pre-K programs in recent years. And growing public sentiment (including many participants in the Michigan's Defining Moment Public Engagement Campaign) point to the need to intensify preschool education for all students.

Second, the Kalamazoo Promise is leading new groups of students to college, propping up real estate values in Southwest Michigan, and creating a collective community will for intensified education.

Third, Michigan is in an arms race with other states who are considering or launching, statewide scholarship guarantee programs, as the Center for Michigan documented in our "Swift Gazelles & Lumbering Lions" report.

Fourth, the state has a long way to go to reach our education goals. Nearly five years ago, the Cherry Commission issued the ambitious call to double the number of college graduates in 10 years. We've seen good progress, including the passage of more intense educational standards and an emerging trend of rising test scores as a result. As of 2007, the percentage of Michigan adults with a bachelor's degree or higher was 24.4 percent (up from 22 percent in 2000) but a far cry from the more than 40 percent that would be required in 2015 to reach the Cherry Commission goals.

Fifth, the Wheeler-Smith/Warren plan heightens debate over Michigan's ugly higher ed funding cycle. Each year, universities face the prospect of funding cuts from legislators who have viewed higher ed spending as discretionary. They've cut the higher ed budget under the reasoning that the costs can be passed on to the students, which is exactly what universities have done by raising tuition. The real losers in all this are the students and their families, who are now paying more than $1 BILLION per year in student loans to cover tuition at just the 15 state universities. As the Ann Arbor News noted, the Wheeler-Smith/Warren plan would take away the tuition guarantee for students attending state universities who could not hold their annual tuition increases to the cost of inflation. Universities will, in turn, argue that they need consistent state funding to hold the line on tuition costs. The scholarship guarantee plan has the potential to tighten the circle of responsibility for funding higher ed and managing higher ed costs.

Now, for that nasty funding question. The bitter reality for innovative proposals like they have a snowball's chance of winning public support until the public and powerful business groups can see a much greater demonstration of public sector reform and sacrifice. The Center for Michigan has logged more than $1.5 billion in potential reforms and savings in state government. A legislative commission will soon release hundreds of millions more in potential reform choices. Until Lansing gets serious about these kinds of reform issues, innovative public policy that comes with a pricetag will, sadly, be laughed out of the State Capitol.

Across Michigan people are stepping forward to help create change for our communities. We wanted to share with you an opportunity to join with others from across the state and across the country working to create change and make hope real in their communities.

The Harwood Institute has, for 20 years, worked to help people create lasting and meaningful change in their community. While other national groups have decided to abandon, Detroit, Harwood is stepping forward. They are bringing the 2009 Harwood Public Innovators Lab to Detroit this Summer – June 2-5. The Lab is a highly focused 3 ½ day learning experience for cultivating the sensibilities and practices of public innovators to create change and authentic hope through the applications of the Institute’s ideas, frameworks, and tools.

Click here to learn everything you need to know about the Lab and how to register. The regular fee for the Lab is $995, but if you register before April 15, 2009, you pay only $950. There is also a special rate for group registrations from the same organization. If you have additional questions or need help with registration, feel free to contact Ann Hayward at 301.656.3669.

Posted by Kiiraaan.

Those communities are finding ways to collaborate and save money on everything from car theft investigations to storm water management. Click here for a full list of their joint projects.

But leaders in those communities say they could to even more if legislators would reform decades-old laws regarding binding arbitration and wage rates between municipalities.

"It is clear that more could be done if only State law would enable it," they write. "The seven units are limited by laws that place conditions on consolidation of service that artificially drive up costs just when cost savings could be earned. State law also gets in the way of providing service at the most effective level of government. The seven local units have developed efficiency-improving, cost-saving options that are blocked by current law."

By Melissa Preddy

Even as Michigan’s economy staggers under some of the nation's most dire conditions – its giant manufacturers in freefall, its real estate market moribund, its unemployment rate the highest in the country -- a plan is moving forward here to capitalize on what some call one of the nation’s most desirable commercial assets.

Detroit Metropolitan Airport, with two new terminals surrounded by plentiful undeveloped land, served by two adjacent expressways, a stone’s throw from the Canadian border, near major research universities and boasting superior international jet service, has all the right ingredients to become a thriving "airport city," experts say.

Airports around the globe are coming to be seen as destinations rather than just points of departure, said John Kasarda, a professor at the University of North Carolina's Kenan-Flagler Business School. Often credited with coining the term 'aerotropolis,' Kasarda says the notion of real estate near an airport being undesirable or fit only for grubby industries is changing worldwide.

"Airports are far more than places for planes to land and take off," Kasarda said. "They are complex enterprises that touch on all commercial aspects."

Think Amsterdam, where the expansion and transformation of Schipol Airport has turned the city into an international logistics center and in the process invigorated the Dutch economy. Or Kentucky, whose airports have become the hub for amazon.com.

Three feasibility studies conclude that Metro Airport is nearly unrivaled in potential as an engine of commerce, with ample capacity, room for growth and access to a young, well-educated workforce.

Detroit's Aerotropolis project is decidedly long-term. Planners don't have timetables for getting shovels in the ground on specific projects, though they are confident they will come. But they the potential is extraordinary – beginning with construction jobs that pay an average of $53,000 a year, leading to a combination of white collar and industrial employment resulting in jobs paying an average annual wage of more than $67,000.

The near-term goal is to lure more cargo and supply chain traffic to the airport, capitalizing on Metro's unique proximity to borders, highways and railroads.

The ultimate vision for Detroit's Aerotropolis includes Class A office space, hotels, retail outlets and gentrified neighborhoods, green spaces and recreation areas, much like North Carolina’s Research Triangle Park, a 50-year-old planned business community which employs more than 50,000 workers on 7,000 acres near the Raleigh-Durham Airport.

"This is realistic. This is not pie in the sky," said Wayne County Executive Robert Ficano, who has made the Aerotropolis concept a priority in his administration.

But long-term visions depend on short- and intermediate-term steps. Job One is overcoming the regional turf wars and inter-jurisdictional squabbles that have killed or delayed projects in the past.

A task force led by Ficano is trying to do exactly that. Spurred by recession-fueled urgency, proponents of Aerotropolis are coming together to form an umbrella group that will market some 25,000 available acres in the region and create a one-stop shopping hub for investors and businesses.

Currently, companies that want to locate near Metro Airport must navigate a patchwork of nearby municipalities, pitching ideas and pitting the communities against one another to strike the best deal for tax abatement and other incentives.

But so far this month, three more local governments in the airport vicinity have agreed to provide funding and support for the project, which has been spearheaded by a Wayne County-led task force. And organizers hope to have a full contingent – seven municipalities along with Wayne and Washtenaw counties – on board within weeks.

The aim is to create a marketable "brand" for the region and speed up bureaucracy under a state-sanctioned intergovernmental authority called the Aerotropolis Development Corp. The authority would expedite site search, permitting and incentives and reduce other red tape for businesses interested in the Aerotropolis zone.

"In this climate and economy, we don't have the luxury to work alone," Ficano said. "You've got to sell yourself as a region before anything else."

Tim Keyes of the Romulus economic development group says Aerotropolis gives the region a unified name and a unified effort. "It allows us to establish a brand, like Automation Alley did," he said.

Even boosters acknowledge that such a massive transformation at Metro Airport will play out over decades. But the benefits warrant the effort, beginning with supply-chain traffic. Other practical possibilities include offices for consulting firms and overseas businesses whose staffers are frequently in flight. Metro Airport is the nation’s only major airfield complex without nearby Class A office space, a 2008 study pointed out.

"The low-hanging fruit is logistics and distribution here in the U.S.," Ficano said. And with the success other airports have found in courting regional distribution centers, Ficano says Detroit needs to act fast to stay ahead of the competition. Metro Airport – which moved more than 420 million pounds of freight in 2008, according to preliminary data from the Airports Council International – ranks as the 26th busiest airport for cargo-hauling.

Due to the region"s manufacturing slump, Metro Airport moved only half the cargo in 2007 that it did in 1996, the task force’s 2008 study found. On the upside, that means the airport has plenty of capacity to offer prospective clients in the shipping and distribution sector.

Another selling point: The airport was ranked fifth in the nation among "logistics friendly" facilities, according to the trade journal Logistics Today.

Competition growing

State and local leaders don't have the luxury of time. Busier regions also are working to draw more air-based services – Chicago long has contemplated a third airport, and Cleveland's mayor recently proposed an Aerotropolis development there, while places like Memphis and Louisville have a head start due to their hub status with cargo carriers FedEx and UPS.

"We are starting to see the notion 'Aerotropolis' crop up in other cities, too," Ficano said. "But we should be in the best position now to set up and be ready for the economic rebound."

That's in part because the Aerotropolis concept has been bandied about in southeast Michigan for roughly a decade, as officials and urban planners contemplate the abundant available building sites within easy reach of the airfield. Other advantages include nearby railroad lines and additional runway capacity at cargo-oriented Willow Run Airport a few miles west of Detroit Metro.

Elsewhere in the world, successful airport city strategies are being used to grow and streamline commerce. Amsterdam’s Schipol Airport, which boasts amenities ranging from first-class hotels to a wedding chapel to a branch of Holland’s storied Rijksmuseum, is an oft-cited example. At Dubai International Airport in the United Arab Emirates, retail shops alone grossed more than $1 billion last year, experts say. Other major Aerotropolis regions and planned cities are under construction in Thailand and South Korea.

Overcoming obstacles

Foreign airport cities are growing much faster than similar initiatives in the United States, Kasarda said, because overseas governments give more autonomy to the development groups. Here in the U.S. – and particularly Michigan, which by a 1909 "home rule" law protects local governments from state interference – competition between municipalities and a lack of uniform bureaucracy has stymied Aerotropolis growth.

Since 2007, the Wayne County task force has been working to ally the municipalities that surround the airport. To date, Taylor, Belleville, Ypsilanti Township, Ypsilanti, and Van Buren Township have agreed to join the intergovernmental Aerotropolis Development Corp., which must be approved by state lawmakers and signed off by the governor and the state attorney general.

Several bills related to tax incentives and other tools required for the formation of the development corporation were introduced last year but withdrawn at the task force’s request before the 2008 session expired. Organizers say that concerns expressed by other regions and other airport communities will be addressed in revised bills, which could be submitted this spring.

"We've been trying to come up with a set of incentives that could help other counties as well," said Doug Rothwell, president of Detroit Renaissance, the non-profit economic growth group which champions the Aerotropolis concept in its Road to Renaissance plan. "The idea is not to take away from anybody, but we have to leverage the assets we have."

He notes that even without the advantages an Aerotropolis Development Corp. would provide, the airport region has attracted some $1 billion in business over the past couple of years, including a thoroughbred race course and a recycling center in Huron Township.

"That shows that just starting the talk has been able to give investors confidence," Rothwell said. "Now we need to put together the marketing strategy and put the incentive package in place to make more of these deals possible."

"There's no excuse why this year a development corporation can't be formed and that we can't get an incentive package through the Legislature."

Wayne and Washtenaw counties are expected to sign on when the new bills are ready. Huron Township is mulling the plan, and the crucial holdout is the city of Romulus. With the airport taking up nearly a third of its host city’s 36 square miles, cooperation is key.

Keyes, director of economic development for Romulus, says none of the city leaders dispute the plan in principle.

"The airport is a major economic engine," he said. "And despite the economy, there are still businesses out there looking to spend money. We need to attract all forms of business activity."

However, Keyes said, Romulus leaders have expressed concerns about the makeup of the executive committee, which would run the development corporation. As proposed, one of 12 seats would be allocated to Romulus, with two seats representing the six other local governments. Four seats would be allocated to business representatives, two to Wayne County, two to the airport authority and one to Washtenaw County.

"There is a fear that local governments won't be involved in how sites are selected for development," said Keyes, who has been holding study sessions with council members to discuss alternative proposals. He doesn't the see the issue as a deal breaker, however, and expects resolution within weeks. "We're going to negotiate an agreement that is acceptable to everyone."

A sense of urgency

Despite quibbling over some details, all of the major players in Detroit’s Aerotropolis planning agree that they must act fast to replace lost jobs and commerce and keep the region competitive.

"We're at a tipping point. If this is going to work, it's going to work now," said Marsha Ennis, project manager for the Wayne County task force. "Three or four years ago, it would've been a harder sell. Now the jobs and investment look really attractive."

In a nod to tough conditions, the task force slashed the membership cost for local governments by half, to $25,000, making it easier for the surrounding communities to sign up.

So far, three feasibility studies have been completed by outside consulting firms, all concluding that Detroit’s airport region is nearly unrivaled in potential. One report completed last year identified 50 prospective business sites, which the Aerotropolis task force has narrowed down to 13 near-term possibilities. The exact locations aren’t being released, Ennis said, for competitive reasons, but they would be the centerpiece of a marketing plan to be commissioned as soon as the Aerotropolis Development Corporation is a reality.

"The urgency is that in the next five to 10 years, regions without an Aerotropolis will not be on the world map," said state Rep. Ed Clemente, whose district adjoins the airport region. He sponsored last year’s bills to create the development corporation and is awaiting the amendments for possible resubmission this spring.

Producing a cohesive marketing plan and a one-stop shopping entity in place for the nation's eventual economic rebound will jump start Detroit’s recovery, the University of North Carolina’s Kasarda said.

Right now, "there is no competition," he said. "Detroit is clearly in the lead when it comes to developing a master plan and governance structure to make it implementable. If you become the fastest, most agile place to do business, investment will come."

"If there’s a brass ring to grab in the 21st century," he added, "this is it."

Mark is one of those treasured few whose brains, competence, experience and common sense help make our state the wonderful place it is. He has made a practice of staying out of the limelight, but his career has been nothing short of dazzling.

He served at the very top of state government, as director of the Department of Management and Budget and as State Treasurer. And he has had, if anything, even more influence on education.

Murray has been vice president for finance at his alma mater, Michigan State University, and was Gov. John Engler’s appointee to the reformed Detroit Board of Education when the state took over the city's public schools. After a widely praised stint as president of Grand Valley State University, he entered the business world with a bang when he was picked to be president of Meijer, Inc.

I got to know Mark's father, John Murray, a long time ago, when I was just starting out in the newspaper business. He had been a key advisor to G. Mennen Williams when Soapy was governor (1949-61) and later taught journalism at MSU. John was one of the wisest men I ever met, and so his son and I fell naturally into a friendship.

The younger Murray is also a member of the Steering Committee of The Center for Michigan, a non-partisan, non-profit outfit I started back in 2006 to try to develop a common ground, common-sense citizen agenda for Michigan's transformation.

The other day, Mark Murray and I had a long and thought-provoking conversation. Part way through, he said: "If we really want to transform Michigan, we'd do well if we figured out ways to get beyond the usual public policy framing that we hear about all the time and get to things that every person can do in their daily life that will result, over time, in a transformed state."

"Like what?" I asked.

"I keep thinking about two," Mark responded. "First, what if every child in Michigan – every child! – was read to by a parent every day? And second, what if every family – parent or parents and kids – ate dinner together every day?

"Just doing those two things would change forever the development of children. They'd make such a difference here – or anywhere. And they’re the kind of things every person can do …without depending on the government doing it for them."

That common sense and wisdom bowled me over.

Every mother knows how important it is to read to little kids, not just for what they learn but for the kind of bonding that takes place when they're little. One of the happiest things I do with my little granddaughters, age three and four, is to sit on the floor in their bedroom and hold them in my lap and read to them just before they go to bed. My son and his wife do that every night when my wife Kathy and I are not visiting, but for us to get to do it is special.

But I know that, sadly, lots of kids go to bed at night without being read to. And every father knows how vital it is for the entire family to get together around the table, sharing not only food but also what it means to be family, not just a collection of individuals, randomly associated. Now I realize that today's way of living is fast-paced and harried, and conflicting schedules often make it impossible for an entire family to eat together every evening.

But I also remember that having dinner with my own parents most nights was what brought me to the conviction that of the things that are most important, family has got to be right at the top.

Now contrast these simple, human things with the sorts of stuff that newspapers (those still publishing) and bloggers, politicians, and so-called experts think are important.

You might have read about them in any number of Lansing-based news services last week. Members of the legislature and the governor are going to take a 10 percent pay cut, a symbolic step in the face of the recession. Seventy-four members of the House of Representatives members have asked the governor to reverse her idea that any proposed new coal-fired power plants get a special environmental review, thereby slowing approval and construction.

And the governor signed into law authorization for Michigan craft breweries to share facilities with wine makers.

All that is important in a way, no doubt. But not significant.

Those of us who worry about our state, its politics and its public policies regularly look at the world through a framing process that confuses what's momentarily important with what's truly significant.
What's worse, many of us tend to assume that to make a change for the better, we’ve got to get government to do something first, to authorize or subsidize it, or outlawing something.

Rubbish.

What people do in the divinity of their ordinary lives is what's truly significant. Making sure that no child goes to bed without being read to by a caring adult. Taking the time and effort to gather the family around a common table to break bread. Mark Murray knows that. It's why he is such a force for common sense and the common good. And it's why I treasure the chance to talk with my old friend from time to time.

***

Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power's own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

A few details... Michigan Nonprofits:

Posted by Blondieyooper.

Front row, seated, left to right: Andrew Kandrevas (D - Southgate), Roy Schmidt (D - Grand Rapids), Lisa Brown (D - West Bloomfield), Kate Segal (D- Battle Creek), Ellen Cogan Lipton (D -Huntington), and Dian Slavens (D - Canton Twp).

Second row, standing, left to right: Jim Slezak (D - Davison), Mike Huckleberry (D- Greenville), Wayne Schmidt (R - Traverse City), Kevin Daly (R - Attica), Larry DeShazor (R - Portage), Lesia Liss (D - Warren), Bill Rogers (R - Brighton), Hugh Crawford (R - Novi), Jim Stamas (R- Midland), Matt Lori (R - Constantine), Cindy Denby (R- Fowlerville), Jon Switalski (D - Warren), and Robert Genetski (R - Saugatuck).

Back row, standing, left to right: Timothy Bledsoe (D-Grosse Pointe), Joseph Haveman, (R - Holland) and Pete Lund (R - Shelby Twp).

Ron Dzwonkowski at the Detroit Free Press took note of the caucus a column last week...

Understand that while this new caucus has no issues agenda, its members have wrapped their arms around an attitude that, despite lip service, has not been standard operating procedure in Lansing. They've adopted a mission statement of sorts declaring that caucus members, 26 Democrats and 20 Republicans, "are willing and eager to look beyond partisanship and philosophical divides to accomplish what is necessary to find long-term solutions to Michigan's problems..." They vow to "know each other on a level that presents civility and camaraderie even when we disagree passionately on policy" and hope the caucus "will be remembered for its ability to steer Michigan away from economic calamity and unnecessary bickering..." But for heaven's sake let us not disparage the idea. In fact, let us hold them to their pledge and hope they can hand it down to freshman classes to come. Because they're right: People are sick of a government that's perceived as being at perpetual partisan loggerheads and full of people forever jockeying for a chair on the next-higher deck while the ship is sinking... Granted, in tough times such as these, political leadership becomes an easy target for ire. But if those leaders aren't perceived as pulling together, the people will never fall in behind them. So I hope this new caucus hangs tough and remembers those voters who sent them to Lansing for climate change. Perhaps by the time they become leaders, the people will have someone to follow.

"Do I think they'll really listen to what we say?" Dastoli told the West Michigan Business Review. "I would hope so. And if not, we've got to start at this level and find legislators who will, because without legislators who are going to follow the thoughts of the people instead of their own partisan ideas, we're never going to improve things."

Citizens like Mr. Dastoli are gathering all across the state every week to discuss Michigan's future. So far, 1,600 people have participated in Community Conversations in 2009. It's all part of the Michigan's Defining Moment Public Engagement Campaign, a statewide effort to heighten citizen dialogue and develop a common ground agenda for Michigan's future -- an agenda that can serve as the center of debate in the crucial 2010 statewide elections in which every elected leader in Lansing faces re-election and many will be replaced due to term limits.

Don't sit idly by while others determine your state's future! Join in today!

To participate in, or convene, a Community Conversation in your area, please contact our outreach coordinators...

SOUTHEAST MICHIGAN: Kim Johnson, 248-321-8635
LANSING-FLINT-JACKSON-OUTSTATE: Nancy Short, 202-390-5766
GRAND RAPIDS-WEST MICHIGAN: Amy Morris and Brian Brown, 517-485-6600
KALAMAZOO-SOUTHWEST MICHIGAN: Blaine Lam, 269-345-2007

"Reflections" was posted by CMU Chem Prof.

First, in the wake of a brutal statewide economy, Census statisics show the Grand Rapids region is holding it's own...

In West Michigan, Kent County showed a slight increase, from 602,676 to 605,213. Ottawa County also grew, from 258,461 to 260,364," the Grand Rapids Press reported. "The Grand Rapids-Wyoming area also was up, from 774,931 to 776,833, as was the Holland-Grand Haven area, from 258,461 to 260,364."

Secondly, Kalamazoo's strong reputation for regional cooperation went up a couple more notches with the scary disclosure that a cooperative of local banks and financiers saved a bunch of local jobs providers from closing this winter due to the credit crunch, the Kalmazoo Gazette reported...

Eight local manufacturing companies that paid their bills and were financially sound nearly closed their doors for good last month, local business leaders say. "We probably had at risk close to 2,000 jobs," said Ron Kitchens, chief executive officer of Southwest Michigan First, a local economic-development agency. "There was a week or 10 days there where I didn't sleep very well."

Hats off to west Michigan leaders for once again demonstrating the extreme value of collaboration.

By Stacey Range Messina

Lorri Rishar Jandron and Angela Artibee Witwer knew exactly where they wanted to open shop when they decided to leave their corporate careers in 2007 and become entrepreneurs.

The long-time marketing and communications colleagues needed somewhere funky, friendly, and, well, edgy to launch their public relations firm Edge Partnerships.

"Old Town just felt right," Jandron said. "It's a place you walk into and feel like you’re home. It's a place where things are happening and where people want to be."

Once one of the region's most dilapidated neighborhoods, Lansing's Old Town has undergone a renaissance in the past two decades, becoming a hub of activity. Its eclectic offerings draw entrepreneurs, new residents and visitors to this trendy pocket a half-mile north of downtown.

Graffiti-covered buildings and boarded-up storefronts have been transformed into a historic commercial district with unique boutiques, kitschy specialty shops, art studios and galleries, locally owned restaurants, and lofts. Offices offer services ranging from legal and accounting to massage, Pilates and yoga. Crowds of 15,000 to 20,000 swarm the main business district’s six blocks for festivals featuring beer and wine tastings, live jazz and blues.

And it’s had an impact on the mid-Michigan economy: Since 2004, more than 30 businesses have opened in Old Town, creating 200 jobs.

"Old Town has re-emerged as a thriving community with a cast of very creative characters," said Brittney Hoszkiw, executive director of the Old Town Commercial Association.

A large part of the neighborhood’s success is its authenticity, said Joe Borgstrom, director of the Specialized Technical Assistance & Revitalization Strategy (STARS) Division of the Michigan State Housing Development Authority.

With its prime spot on the Grand River, Old Town was Lansing's original business district featuring a mill, ash factory, a hotel for state legislators and a handful of bars. But as happened in so many communities, this neighborhood became forgotten in the city's zeal for growth.

When community leaders Terry Terry and the late Robert Busby took interest in rebuilding the area, they didn’t turn automatically to bulldozers and envision shiny, new structures. They wanted to work with existing structures, uncovering the beauty within by capitalizing on the buildings' rich architecture and the natural ambiance provided by the river.

"It’s not fake. This is something you can't get anywhere else," Borgstrom said. "You won’t find this at the local mall."

And, he said, authenticity and place are the currency of the 21st century for communities, especially those seeking attention and dollars from the Creative Class and Millennial Generation, which tend to shun mass-produced and emotionless goods and experiences.

The second key to Old Town's success is the people, he said. The people who first saw the neighborhood’s potential, and those who continue to open businesses despite the current economic challenges.

"It's a community that refuses to give up," Borgstrom said. "They don’t listen to the economic forecasts. They see opportunity where other people see challenges."

As a truck driver for GM suppliers, Michelle Taylor had a front-seat view of the region's economic turmoil. When GM started cutting shifts, she started looking for other opportunities. She found it when Club 505, a popular lesbian bar in downtown Lansing, closed, leaving a gaping hole in the lesbian hangout scene. At the same time, the Rendezvous on the Grand, a nightclub with a prime location in the heart of Old Town, was listed for sale. Taylor and friend Lisa Whitehead took over the bar in January and are hoping to fill that gap. Taylor’s girlfriend is the chef and is expanding the kitchen into a full-service restaurant.

"The community support has been amazing," Taylor said. "When we opened, we had other business owners calling and stopping by offering help. They sent flowers. Even those who would be considered our competition said to give them a call if we needed anything. It was wonderful!"

Having grown up in the area, Taylor recalls what it used to look like.

"It was a little spooky and scary down here," she said. "Buildings were boarded up, lights burned out and broken. I didn’t really like to walk through here. It's been really fun to watch the whole revitalization. Just watching all these positive changes. And now to be part of it is really great."

For more information about Old Town, visit the Old Town Commercial Association.

The Michigan Legislature faces a two-fold challenge in 2009: addressing yet another series of budget shortfalls while shaping an agenda to get Michigan on the path to prosperity. There are already signs of hope for Michigan. We possess great assets. But there is little room for error. Our leaders must dedicate themselves to a vision that is solidly focused on the future.

To save the Legislature some gnashing of teeth, we submit that a guide for achieving Michigan’s future prosperity in the knowledge-based New Economy has already been developed by a group of diverse business, environmental, agricultural, and social justice leaders.

Since 2006, the Leadership Council of People and Land (PAL) has been dedicated to understanding what Michigan must do to once again become an inviting place to live and work. With the support of the W.K. Kellogg Foundation, this nonpartisan group has actively charted a path for our state to re-invent itself. PAL’s Six Pillars for Prosperity describe an interdependent set of “must have” attributes that can help decision makers craft a new agenda for a new Michigan. The Pillars begin with a vision of Michigan as a New Economy force: “To attract and retain diverse and talented people, Michigan’s core assets of abundant natural resources, agricultural strength, educational opportunities, and urban potential must inspire the creation of vibrant and welcoming communities.”

Many of these leaders will share their ideas to help move our state forward during the Michigan Land & Prosperity Summit, scheduled for April 14–15, 2009, at the Lansing Center in Lansing. Hosted by the Michigan State University Land Policy Institute and Michigan Land Use Funders, this event will focus on "Building a Michigan Prosperity Network." The goal of the event is to inspire collaboration across Michigan and the Midwest to achieve prosperity in the New Economy.

While the PAL Leadership Council has ideas about actions decision makers must take, it is the role of legislators as well as regional and state leaders to develop policies that achieve the kind of Michigan we want to leave for our children’s children. It’s time our leaders stop bickering and unite to produce an agenda that returns Michigan to prosperity.

To register for the Michigan Land & Prosperity Summit, go to www.landpolicy.msu.edu/2009MichiganLand&ProsperitySummit. For more information about PAL and the Pillars for Prosperity, visit www.peopleandland.com .

William Rustem of Public Sector Consultants, Inc. in Lansing is Co-Director of the People and Land (PAL) Leadership Council, comprised of the Michigan Association of REALTORS, Michigan Chamber of Commerce, Michigan Environmental Council, Michigan Farm Bureau, Michigan Suburbs Alliance, Michigan United Conservation Clubs, and the NAACP – Detroit Branch.

Perhaps the best you can say is that it seemed like a good idea at the time. Back in 2003, lawmakers decided to drop the old requirement that schools teach kids for no less than 180 days each.

Instead, they set a new standard: A yearly total of 1,098 hours of instruction. Schools promptly began to schedule fewer days of class time, while adding more minutes to the school day. The idea was to save money when it came time to negotiate labor contracts.

The tourism industry liked the idea of a shorter year too, and a couple years later, responding to lobbying, the legislature delayed the beginning of the school year until after Labor Day.

The idea was to encourage parents and kids to take advantage of the long weekend to travel and spend money in Michigan.

Well, now we have some hard data indicating how all this has turned out. The Center for Michigan has issued an analysis called "School Daze: Michigan's Shrinking School Year" that shows that 98 percent of our schools don’t meet the 1,098 hour mandate, let alone the old 180 day standard. Bad weather, snow, mechanical problems and other cancellations put the high school average at 1,066 hours, just about a week less than the mandated standard.

The report touched off a furor in Lansing. "Trading a couple more minutes a day in school for fewer days is outrageous … unconscionable," said State Superintendent of Instruction Mike Flanagan. Sen. Wayne Kuipers (R-Holland), the chair of the Senate Education Committee, told me he thinks school officials are gaming the system. "Schools are complaining about tough graduation requirements, but they’re cutting back on instruction hours. It doesn’t take a rocket scientist to see the disconnect."

Suddenly, some legislative leaders are talking urgently about going back to the 180 day standard. But school officials claim they don't have enough money to do that, let alone the 190 days favored by education experts. (Japan requires 220 days, Korea 225 and their kids score much higher than Americans on standardized tests.)

Kuipers said one of the reasons lawmakers decided to drop the 180 day requirement was to let schools experiment with all kinds of learning experiences – such as distance learning via computer – that do not involve rigid "seat time" as the measure of school outcome.

However, there is no indication that many districts actually did this. John Austin, vice chairman of the State Board of Education said, "I think the real answer will come when we move to performance-focused education – versus calendar-based."

True enough. But changing from a system that is still based on the 19th century agricultural calendar, when kids needed to be out of school during the summer to help take care of the crops, could take a long time. The Center's report is pushing Lansing to think --now -- about what can be done to improve school performance.

One possibility is allowing school districts to raise money locally – from businesses looking for skilled workers, for example – to supplement school aid money from the state to allow a 190 or even 200 day school year. A number of better-endowed districts – think Bloomfield Hills, Traverse City, Ann Arbor – might jump at the idea.

Creating a special class of "exemplary" schools might help break the stranglehold of 180 day "seat time" as the measure of school performance. Indeed, it's not beyond hope that creating exemplary schools could involve merit pay for teachers, this time based on the performance of an entire school rather than an individual teacher.

Site-based management – the idea that principals in a given school building would have power to move teachers around by performance rather than seniority – is another innovation that appears to have worked in other states.

There is also considerable evidence that a system of performance contracts between teacher, parents and kids can have an enormous impact on learning and achievement. This would include setting expectations for teaching, parental involvement, homework, and other relevant matters.

Kuipers told me that he can imagine a profound reform program that would involve mandating specific hours of instruction and encouraging exemplary school districts to adopt merit pay, site-based management and performance contracts. Sweetening the pot with local funding might help deal with the teacher unions.

And requiring state school officials to certify individual district plans would provide accountability. One possible opening: President Obama's recent endorsement of merit pay for teachers and public charter schools may help overcome instinctive Democratic and teacher union resistance to such reforms.

Yet one big problem, Kuipers explained, is that this would require modifying Proposal A, which tried to get away from vast disparities in school funding by setting out uniform state foundation grants to districts. "I don’t know how we’d get around that," he says, "but it's become plain we have to do something pretty far-reaching."

I agree with those who say a crisis is too valuable to waste. The Center's report on the shrinking school year has focused attention on our schools in a way that touches every parent who worries about how much their child is going to learn in a rigid school system where powerful interest groups have long resisted change.

Flanagan, Kuipers, Gov. Jennifer Granholm and other leaders who care about our state's future should move now to start setting out a serious school reform agenda, a reform that should be a central part of the debate in next year’s statewide elections.

Editor's Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics, and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a centrist think-and-do tank which publishes the Michigan Scorecard. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net.

In the midst of the budget meltdown two years ago, the Granholm Administration cut a deal which provides state workers with a one percent pay raise this year and a three percent pay raise next year. A simple state worker pay freeze could save upwards of $25 million per year and bringing state workers' rich benefit plans in line with those available in the private sector could save more than a quarter-billion a year, as the Center outlined in $1.5 billion in possible budget reforms.

So it is troubling that the Granholm Administration would immediately dismiss the GOP proposal out of hand by saying state workers had already made sacrifices. That response is akin to the GOP response in recent years to Granholm's anger over proposals to cut taxes without clear GOP outlines of where the cuts would be made. Granholm rightfully fought that kind of cart-before-the-horse thinking, but she's wrong to dismiss GOP budget-cutting ideas without offering counter-proposals to close a huge structural budget deficit that is on pace to grow to $10 billion over the next decade.

It's likely to be another extraordinarily difficult budget fight in Lansing this year. Outright dismissals of reform ideas by either party are part of the problem.

In another sign of growing pressure on public workers, former state schools superintendent Tom Watkins is trumpeting the idea of merit pay for teachers...

"The concept behind merit pay for educators is a simple one: good teachers should be paid more, mediocre teachers should be given a chance to improve, and underperforming teachers should find a new line of work," Watkins wrote in the Freep this week.