Editorial

Educated workforce trumps low tax rates

February 24, 2017
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The Michigan House of Representatives late last week did not approve an income tax cut that would have lowered the 4.25 percent tax to 4.05 percent by 2019 and then to 3.9 percent by 2021. It is legislation that has been backed by several business groups, including the Grand Rapids Area Chamber of Commerce and Business Leaders for Michigan. The Business Journal agrees with Gov. Rick Snyder, however, who opposed the cut, noting tax reductions already approved, largely benefiting the business community, and with real concern about mounting budget pressure, most especially for increased road spending to repair and replace Michigan’s rotting bridge, road and highway system.

The Business Journal remains as concerned about education attainment and funding, and notes a new study by Business Leaders for Michigan, “Building a New Michigan Plan.” While the esteemed BLM panel of the state’s top business owners and executives continue to believe “the cost of doing business in Michigan” is a liability for its corporate tax climate (Michigan now ranks at No. 11 for corporate tax climate among 50 states), the Business Journal notes other aspects of the in-depth study are far more troubling.

  • Per capita income edged up only slightly, ranking Michigan as No. 31 among all states. Per capita GDP is 35th.
  • The number of critical degrees and certificates declined, giving Michigan a rank of 28th.
  • Fourth grade reading proficiency continues to decline, now ranking Michigan at 46th.
  • Overall educational attainment measured Michigan at 29th. The Grand Rapids region continues to lag other regions of the state in the percentage of residents with an associate degree or higher, falling behind the Lansing region, Ann Arbor region and Detroit. In fact, the West Michigan region ties with every region from Berrien County to northern Michigan: the entire western part of the state.

The Business Journal does not believe the lowest tax rates in the nation are more important than an educated workforce providing increased per capita income and economic vitality. The continued clamor surrounding recruitment issues in every business sector grows more worrisome, impacting the ability of business owners and executives to find skilled workers — let alone West Michigan’s or Michigan’s ability to attract new employers. The economic development impact will stymie growth and prosperity.

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