Taxation Without Innovation

More and more, progressive business leaders suggest that the whole issue of taxes is a declining factor as CEO's, companies, and talented workers choose where to locate. The increasingly important determinant driving economic development, they say, is quality of life. And that requires targeted public investment in real assets such as schools, transportation infrastructure, the environment, and neighborhoods.

Nevertheless, the politicians are determined to cut taxes in Michigan in hopes of making the state more attractive to executives and generate jobs. Governor Granholm's latest plan to modernize the business tax is getting warm reviews, according to a report by the Associated Press. But does the proposal truly seize the opportunity to draft a tax strategy fit for the 21st century?

Michigan currently taxes a company's payroll, which turns out to be a disincentive for doing something positive like growing jobs. No doubt that outdated approach demands fixing. But a key tenet of the Granholm plan is to shift taxation to yet another important economic benefit: profits. That seems backward.

The Great Lakes State should be exploring ways to tax - and thereby discourage - bad things like pollution, waste, and other unsustainable activities that have a detrimental effect on communities and ultimately cost taxpayers - corporate and personal - real money.

Some question whether the Granholm plan would make Michigan competitive in the global economy. Another question is whether the approach inspires cutting-edge innovation and enhances a unique quality of life.

Detroit's Road to Renaissance

For the second time in less than two weeks, a high powered group of civic leaders in Detroit, MI has unveiled a strategy for the revival of their downtrodden metropolitan region.

The strategy, Transforming the Region's Economy: Road to Renaissance, focuses on six key areas:
  • Leverage the region's know-how in indusrial design, manufacturing, and distribution expertise to become a global logistics hub.
  • Nurture and grow the city's creative arts community
  • Stregthen "entreprenurial capacity" by making financing more available to people with new ideas
  • Engage the state's major universities in an effort to retain young workers in the fields science, math, and engineering.
  • Market the region globally as an international center of higher education, culture, arts, adn entertainment.
  • Establishing Detroit as a global hub of modern transportation technology and mobility.

That's a tall order for a region that can't agree on a strategy to provide basic bus service for its residents, workers, and visitors, as reported in yesterday's Detroit News.

Still, initial reports suggest civic leaders are pushing cynicism aside and striving to restore the Motor City's economic and cultural might.

Click here for a followup editorial on the effort from the Detroit News.

Staying with the News, the paper also interviewed some of Detroit's top business leaders about the challenges and opportunities confronting their city and the state. Click here to read the insightful comments.

A Way Forward

While the Bush Administration and the federal government continues to distance itself from a pledge to provide major funding for a major Great Lakes restoration program, one local leader advocates a reasonable way for residents and officials in the region to generate billions of dollars in funding and begin paying for the public works project themselves.

The region could raise over $634 million per year by assessing a $15 quarterly fee to the 10.5 million households in the US portion of the Great Lakes, according to Jim White, executive director of the Cuyahoga River Remedial Action Plan in Cleveland. At $25 per quarter, the region could raise more than $1 billion annually.

"Congress has neither the will nor the resources to pay for all the restoration needs in the Great Lakes," Mr. White said. "And, locally, our existing approach and organizational structure suggests we are not serious about protecting or restoring our water resources. We are not organizing or managing our assets to solve our problems."

The biggest problem in the greater Great Lakes today is an economic development strategy unfit for the 21st century. But the biggest asset is the Great Lakes ecosystem. The region must leverage that asset with thoughtful and targeted investments.

The Lakes remain soiled by the Industrial Revolution. But an aggressive plan to restore the globally unique waters - as proposed by the $20 billion Strategy to Restore and Protect the Great Lakes - will not only restore environental magnificence. It will prepare the region to compete in the global knowledge economy by elevating the quality of life, inspiring cutting-edge innovation, accelerating job growth, securing existing industries, and stregthening the overall economy today and for the future.

That's a signigicant return on investment that's worthy of local and national solidarity and funding.

Heads Above

"The dogmas of the quiet past are inadequate to the stormy present. As our case is new, we must think anew and act anew. We must disenthrall ourselves."

Abraham Lincoln, 16th President of the United States of America, in his annual address to Congress, December 1, 1862

The Business of Transit

It's no surprise that mainstream media is ramping up coverage of the campaign to expand modern mass transit in cities across the greater Great Lakes. What's news is 'where' in the media the stories are starting to pop up: the business section.

Rapid transit increasingly is viewed as part of a comprehensive strategy to generate jobs, reduce the cost of traffic congestion, and build cities capable of attracting top talent to compete in the global knowledge economy.

Minnesota Public Radio gets it. In a recent story, MPR reports in the business section how Minnesota voters approved a dedicated motor vehicle sales tax to help boost investment in transportation infrastructure, including public transit. But the story quickly turns to question whether the $60 million a year generated by the new tax will be enough to keep pace with Denver, Portland, and other growing cities investing heavily in public transit in search of a competitive edge in the new economy.

"This year Dallas is getting $700 million of federal money to build their transit corridors," State Representative Alice Hausman told MPR. "Dallas is one of our economic competitors."

Indeed, so is St. Louis, Salt Lake City, Washington, DC, and other U.S cities who now are expanding mass transit service far faster than the Twin Cities and the majority of Great Lakes cities.

Big Ten Party

While Democrats were busy trouncing Republicans in the recent national election, outgoing GOP Party Chairman Ken Mehlman took to MSNBC with some advice in anticipation of the 2008 campaign: "We've got to be a Big Ten party," Mr. Mehlman said, acknowledging the political significance of critically important swing states Ohio, Wisconsin, and Michigan for presidential hopefuls.

Republicans certainly have significant work to do in the greater Great Lakes. Prior to election night GOP leaders claimed majorities in five state legislatures (IN, MI, OH, PA, and WI) and held four gubernatorial seats (OH, NY, IN, and MN), according to an election analysis prepared by the Great Lakes Commission. Post election, Republicans now control one state legislature (OH) and two governorships (IN and MN).

"It is worth noting that Democratic governors now control states that carry 295 electoral votes, much more than the 270 needed to win the presidency," the GLC analysis notes.

The question is how will Republicans compete for the Great Lakes vote? Will they attempt to divide and conquer with distractions like tax cuts, flag burning, and gay marriage? Or will they - and their Democratic rivals - strive to unite the people of the economically desperate Great Lakes - and the nation - by outlining a serious agenda to promote energy independence, education, health care, and other responsible investments in America's future?

Certainly Mississippi Republican Senator Trent Lott's return to leadership does little to signal a significant shift in party thinking.

Wind Work in Ohio

A substantial national investment in wind energy could bring as many as 13,000 jobs to Ohio, according to a new report released by Environment Ohio.

In addition to reenergizing the entreprenurial spirit and manufacturing might of the greater Great Lakes region - indeed, the very heart of the United States of America - a national wind project could also promote the country's energy independence from terrorist regimes, protect air quality, and revitalize rural areas as farmers lease land to energy providers.

The challenge is to muster the political will and leadership - on both the regional and national stage - to advance the ideas of the 21st century rather than subsidize and perpetuate the problematic patterns of the past.

Everytime the nation has jumped to a new energy source - from wood to coal to oil to nuclear power - the country has experienced real corresponding economic gains in efficiency, productivity, and profitability.

Given its history and know-how when it comes to energy production (and consumption), the Great Lakes region is uniquely positioned to lead the way in the development of sustainable energy technologies and build the energy platform for the future.

East Toledo, in fact, is competing for a $11.5 million federal grant to become America's first test site for wind turbine blades, according to a report by Tom Henry in today's Toledo Blade.

Wisconsin's Water Play

In a bid to distinguish themselves as the leader of Great Lakes stewardship, Wisconsin officials earlier this week introduced an ambitious agenda to promote sustainable water use and strengthen the state's economic competitiveness.

The report, presented to a special state legislative committee, calls for a state water czar to advance and oversee conservation programs; the installation of plumbing and other water fixtures that promote more effective water use; and adopting water pricing policies that promote conservation among consumers. The report, produced by an advisory group of industrialists, environmentalists, farmers, and utility officials, also called for a program to aggressively reuse and recycle existing supplies. If implemented, the agenda could establish Wisconsin as one of the more progressive state's in the region when it comes to marrying economic and environmental goals.

The report comes amidst growing regional awareness that the globally unique waters of the Great Lakes ecosystem are the region's primary competitive advantage in a knowledge-based economy. Ready access to robust water supplies not only allows state's like Wisconsin, Michigan, and Ohio to attract and expand industry; clean fresh waterways also strengthens the region's competitiveness by enhancing quality of life and, by extension, the ability to retain and attract companies and the talented workers they covet. What's more, cities and companies across the nation have begun reducing costs and saving real dollars just by getting smarter about how water is used to meet daily needs.

The report also comes a little more than a year after the release of Gov. Jim Doyle's Conserve Wisconsin agenda.

Sharpening Detroit's Agenda

A historic alignment of civic and economic development groups focused on transforming Detroit into a more modern, attractive, and prosperous city was announced yesterday, according to a front page report in the Detroit News that broke the story.

Few cities in America face the monstrous economic, social, and environmental challenges confronting the Motor City. But the group, known as One D, reportedly would target improved education, mass transit, and economic policy. The effort, spearheaded by Edsel Ford, comes as more successful cities across the nation focus intensely on spurring a culture of innovation, revitalizing the urban core, and competing in the global economy.

Detroiters may be skeptical, as they've seen such calls for collaborations in the past bear little fruit. The Detroit News itself optimistically editorialized today that "there's something markedly different" about the current effort. And one expert responded by saying that, in order to be successful, One D must engage the "average residents," according to a followup report in today's paper.

News columnist Daniel Howes, one of the more astute observers of the Motor City's (and Michigan's) economic crisis, says in today's column its time for Detroiters to push aside the cynicism about a united effort in a region where whites and blacks, suburbanites and city dwellers, and Republicans and Democrats are traditionally at odds. Indeed, Howes implies that cooperation is essential to the region's competitiveness.

"What One D is about," United Way President Michael Brennan told Howes, "is finding the common intersection of the public, private and nonprofit sectors. It's taken 50 years to get here and we've got a long road ahead of us. We all realize that a go-it-alone strategy is not a sustainable strategy."

Getting There Together

The lack of convenient modern rapid transit is an urgent threat to the economic competitiveness of the Twin Cities region, according to a recent report from the Minnesota Center for Environmental Advocacy.

According to the report, traffic congestion cost residents in the Minneapolis-St. Paul region approximately $975 million in 2003. That's sixteen times more than it cost in 1983. The availability of mass transit and other options that lessen dependence on the automobile increasingly is viewed as a legitimate strategy to combat congestion and its many social and economic costs.

Perhaps even more important to the sustainability of a healthy economy, the report details how four of the Twin Cities competitors - Denver, Dallas, Phoenix, and San Diego - already are building fast, convenient, and safe public transit. The movement is part of the growing recognition about the limits of the auto-dependent lifestyle. It's also driven by the idea that a city's ability modernize the economy, generate jobs, nurture healthy people, promote energy independence, and stem traffic congestion and sprawl depends on the extent of choices people have to move around.

"Transit plays a critical role in the growth and success of other regions," the report notes, "but a substantial gap exists between the realities of the Twin Cities' transit system and the potential for enriching the region's social, economic, and environmental conditions."

With the exception of Chicago, that gaps extends to every major city in the greater Great Lakes region.

Cleaning up in Waukegan

More than three years after an academic study projected that eliminating pollution in Waukegan Harbor could add more than $800 million to area property values, the Lake County Board has agreed to allocate $2.5 million toward the project, according to a report in today's News-Sun.

Decades in the making, the cleanup is projected to cost $36 million, according to the report. In addition to elevating property values, it will employee dozens of people to dig PCB's outta the harbor, safeguard human health, and improve the overall quality of life in northern Illinois.

Powering Up

The Great Lakes lost a dedicated advocate when Republican Senator Mike DeWine of Ohio was unseated by Democratic Challenger Sherrod Brown. But, with the change in power, the region's leadership now controls half of the major committees in the House of Representatives. Here's a breakdown:

  • Rep. John Dingell, D-MI, will oversee the Energy and Commerce Committee
  • Rep. John Conyers, D-MI, will chair the Judiciary Committee
  • Rep. Dave Obey, D-WI, will oversee Appropriations
  • Rep. James Oberstar, D-MN, will chair the Transportation and Infrastructure Committee
  • Rep. Collin Peterson, D-MN, will oversee the Agriculture Committee
  • Rep. Louise Slaughter, D-NY, will chair the House Rules Committee

Perhaps the best news comes from the Senate, where Senator James Inhofe of Oklahama will be removed from his post as chair of the Environment and Public Works Committee. That guy clearly didnt get it.

What's more, Mr. DeWine vowed to remain active in the campaign to restore the Great Lakes in a recent article in the Dayton Daily News. All in all, the election brought good news for the Great Lakes. Now the task turns to educating the 2008 presidential hopefuls about the region's challenges and opportunities.


"If you're being run out of town, get in front of the crowd and make it look like a parade."

- Author unknown

One for the Birds

Despite shrinking representation in the nation's Capitol, the greater Great Lakes region maintains substantial political influence in the United States.

Voters in the region decided the past two presidential elections. Swing states like Ohio, Michigan, and Wisconsin will again play a key role in the 2008 campaign. And those three states plus Pennsylvania are the "canary states" in the 2006 midterm battle, according to a report in Sunday's New York Times.

"If you see Democrats take charge in any one of those eight chambers, it's a sure sign that it's been a red-letter night for the Democrats," Tim Storey, a senior fellow at the National Conference of State Legislatures, told the Times.

Still, the Great Lakes region must elevate its own political discourse if civic leaders aim to inspire the 2008 national debate. The region is facing urgent and long-term economic, social, and environmental challenges. And it will be increasingly difficult to address these pressing issues, and forge a truly meaningful national dialogue, with the region's body politic engaged in petty smear campaigns and focused myopically on distractions like gay marriage, tax cuts, and preserving the practices of an outdated industrial era.

Growing H2O Biz

As they struggle to explain and manage the intense transformation reshaping the regional economy, Great Lakes leaders continually tout biotech, alternative fuels, and homeland security as the leading business opportunities in the 21 century economy. Fueling innovation in the water industry is yet another opportunity perhaps so obvious it's regularly overlooked. But entreprenuers continue to push new ideas nonetheless.

The latest sign that the greater Great Lakes region has the unique potential to become an international hub of freshwater science and technology comes from Wisconsin, where public officials now are considering establishing a National Estuarine Research Reserve facility along the state's Lake Michigan coastline, according to a report in the Daily Press.

The proposed facility, one of 27 across the country, would advance research and education efforts related to the sustainability of natural freshwater systems. It joins a growing list of disjointed efforts - the Global Enterprise for Water Technology in Grand Rapids, MI; CLEERTEC in Cleveland, OH; the Drinking Water Technology Incubator in Oakland County, MI - that promise to redefine how the region enjoys and employs its water resource for the benefit of the economy and culture.

Meanwhile, the big economic development idea for water means harvesting the resource from the ground, packaging it in bottles, and selling it in convenience stores, as Jeff Alexander recently reported in the Muskegon Chronicle.

There's a broad spectrum of companies in the world organizing around the water resource - from the water sellers to the water savers. The people of the Great Lakes must decide which ventures they want to encourage.

Show Me the Money

On the bad news barometer, what could possibly top the revelation earlier this week that, of the Top Ten Most Dangerous Cities in America, six of them are located in the Great Lakes region?

How about the report last week from the Cleveland Plain Dealer that college graduates earn less - nearly $22,000 less for advanced degree holders - in Northeast Ohio than they do elsewhere in the nation. The report is based on the latest Census figures.

Nineteen of the top 100 universities in the world are located in the greater Great Lakes, according to a 2005 survey by the Institute of Higher Education at Shanghai Jiao Tong University. And the region's universities churn out the nation's leading talent. In 2003 they generated 30 percent of the country's bachelor degree holders and 37 of all advanced science and engineering degrees.

Sure the region boasts a relatively low cost of living compared to talent magnets like San Francisco. But with high crime and low pay, what incentive is there to relocate to or stay in places like Flint, MI, Gary, IN, or Cleveland, OH?