Eric Scorsone is associate professor and director of the Extension Center for Local Government Finance and Policy at Michigan State University
The Michigan and national economies have been growing for over a decade now, though state and local government finances are still recovering from the Great Recession. Michigan’s next governor and legislature must act now on the biggest challenges facing the state, while the economic wind is at the state’s back.
To help inform policy discussions about these challenges, this month the Center for Local Government Finance and Policy, which is part of Michigan State University Extension, is introducing a series of white papers on its Michigan at a Crossroads website. Michigan at a Crossroads is supported in part by funding from the Charles Stewart Mott Foundation.
The white papers are written by experts who cover topics such as the state economy and taxes, future challenges for the state budget, Great Lakes management and use, municipal water quality, demographics and workforce development, and local government finances. Video interviews with the authors accompany the white papers.
Michigan has faced both economic turmoil and economic renewal in the past two decades. The 2000s started with the so-called one-state recession, which ended in 2008-09 when the state joined the nation in its worst period of economic decline since the Great Depression of the 1930s.
During that period, the state’s largest corporation, General Motors, and largest city, Detroit, filed for bankruptcy protection and faced truly calamitous outcomes, while the state government faced a cash crisis. Nearly a decade later, Michigan’s economy looks quite different in many ways.
Today, many of the jobs lost in the first decade of the 2000s have been replaced, the auto industry has been on a strong run since 2009, Detroit is on its way to becoming a vibrant and growing city once again. State government has begun addressing decades’ of legacy cost liabilities and has rebuilt its reserve and cash funds.
However, underlying structural problems remain. The Flint water crisis is only a symptom of the much larger water quality crisis that is brewing in the state. Michigan’s overall infrastructure remains a critical challenge, we still have serious social problems, and the economic recovery has yet to reach far too many households.
I encourage you to read all of the white papers in the Michigan at a Crossroads series, starting with “Michigan’s Post-Recession Spending,” by Sara Wycoff McCauley. This important paper discusses the state budget, which has increased by almost $6 billion (not including federal funds) since 2011.
Sharply differing proposals and counterproposals for addressing these and other challenges have come from both sides of the political aisle. What I hope we can agree on is the extent and nature of the problems we face, so that our next governor and state legislature can take the steps needed to address these critical issues.