New Michigan Scorecard: Five years later, state still stuck in neutral

Despite a rebounding auto industry and real estate prices beginning to turn around, Michigan is barely moving the needle in many other quality of life rankings against other states. That’s the somewhat humbling message of this year’s Michigan Scorecard, compiled through a partnership of The Center for Michigan and Kurt Metzger, Director Emeritus of Data Driven Detroit.

The scorecard, now in its fifth year and based on dozens of data sources and some two dozen specific measures, shows Michigan has made little overall progress during the past five years in four broad areas:

• Education and talent;
• Jobs, prosperity and economy;
• Quality of life;
• Politics and civic participation.

That doesn’t surprise Charles Ballard, a Michigan State University economist who is an expert on the state’s economy.

Ballard says the state dug itself into a deep hole over the past several decades and it will take many more years to climb out of it.

“Some of the problems we face are the legacy of trends that have been happening for 60 years. We’re not going to fix them by next Thursday,” he said. “No governor or legislature can snap their fingers and transform things.”

Michigan showed improvement in the rankings since last year in venture capital, tax burden and, in some ways, in public opinion of state leadership.

Michigan regressed slightly in some other areas: gross domestic product growth compared to other states, the environment, philanthropy and volunteering. There was no qualitative change in the many other categories tracked in the scorecard. Scorecard rankings are based on the latest available data.

If there has been one bright spot in Michigan since the end of what many called the state’s “lost decade,” it’s the economy.

After losing jobs for 10 straight years, Michigan added 257,400 payroll jobs between the end of 2009 and July. That job growth is one reason Gov. Rick Snyder has been calling Michigan “the comeback state.”

Michigan ranks fourth in recent job growth among the states, according to the latest data cited in the scorecard.

Still, there are about 643,000 fewer people employed in Michigan than there were at the state’s last employment peak in 2000, according to the government’s monthly household survey. And the state’s unemployment rate, currently at 8.8 percent, has risen for the past two months. The national jobless rate is 7.4 percent.

Michigan’s ranking against other states in exports, and university research and development, showed little change since last year, although these are strong components of the state’s economy. The state has consistently ranked among the top 10 states in university research and development spending in recent years.

Michigan also posted a record $29.1 billion in merchandise exports during the first half of this year, according to the International Trade Administration.

Venture capital, which many technology-based startup businesses depend on to grow, flowed into Michigan at a faster rate last year. The state ranked 15th in the amount of venture capital invested last year—$242 million—up from 25th in 2011, according to the Michigan Venture Capital Association.

“Thanks to the successful venture community in Michigan, more entrepreneurs are considering the state as a destination to locate and grow their business,” said Carrie Jones, the association’s executive director.

Michigan’s business tax burden also fell last year. The state had the 12th best business tax climate last year, up from 18th in 2011, according to the Tax Foundation.

But Michigan remains a relatively poor state, which still heavily depends on a manufacturing base that pays new workers lower wages than in the past.

The state ranked 35th in per capita income last year. That’s up from 40th in 2011, but down from 17th in 1999.

Ballard attributes that in part to poorly educated workers as more jobs require higher level of educational attainment.

“We remain a state where way too many people don’t graduate from high school,” he said. “If you don’t graduate from high school, your economic prospects are lousy. And the number of our high school graduates who are college-ready is frighteningly small.”

Fourth-grade math and reading scores have slipped since last year’s Scorecard analysis. Michigan ranks 42nd in fourth grade math scores and 36th in fourth grade reading.

Eighth-grade reading scores improved from 33rd in the nation to 29th this year and eight-grade math scores dropped to 37th from 36th last year.

High school completion rates have remained at 76 percent since 2010, according to the scorecard data.

Michigan ranks 37th in college completion, down from 36th last year. College affordability approved somewhat, from 48th in the country in 2012 to 45th this year.

The state ranks 25th in per-pupil investment in the K-12 system, down from 24th last year. State public schoolteachers are the eighth-highest paid in the country, up from 12th last year.

Investment in Michigan’s higher education system, compared to other states, has improved slightly from a year ago. But the state, which ranks 39th, is still far below average.

“The numbers are unfortunate, but accurate,” said state Board of Education President John Austin. “We’ve been losing ground the past couple of years because of reduced investment in higher education and the K-12 system.

“We’ve done all the reform pieces in K-12 but we haven’t delivered on the investment side,” he said.

Michigan ranked 16th nationally in per pupil expenditures in 2008, but has fallen to 25th now.

Education system critics, including the Mackinac Center for Public Policy, say state financial support isn’t the problem with educational performance.

Michigan is spending about $13 billion in state resources on K-12 education this year, the single largest use of state revenue. Some others say most local school district financial problems are a result of declining enrollments and increased costs for employee pay and benefits.

Michigan also fares poorly against other states in other “quality of life” areas that depend on state government financial and policy support. Rankings in public safety, incarceration rates, poverty and the condition of roads all slipped this year compared to 2012.

The scorecard has ranked the state’s overall public health as “average” compared to the nation every year since 2008.

Overall environmental quality in the state slipped from “good” to “average” in this year’s scorecard. Michigan ranks 25th in power generated from renewable energy sources this year, down from 21st last year. Greenhouse gas emissions per capita and toxic chemical releases increased.

Michigan Environmental Council spokesman Hugh McDiarmid Jr. said the state has made progress on key environmental and public health fronts, including taking steps toward building a better public transportation system and making a stronger commitment to eliminating childhood lead poisoning.
But natural resources protections “have been significantly eroded” by rollbacks of environmental laws in the Legislature, he said.

Ballard, who conducts MSU’s State of the State Survey, says the most crucial areas where Michigan is lagging are education, per capita income and employment.

“Those three things say a lot,” Ballard said.