Michigan revenue drop exceeds expectations, hopefully it will spur creative thinking

From Reuters:

Michigan’s revenue collections are at their lowest since 1991, and the economically trampled state will likely have income declines for many more months, a report said on Friday.

“When adjusted for inflation, this is the most significant, annual revenue decline in a half century and double the revenue loss Michigan experienced in the severe recession of 1981,” said State Treasurer Robert Kleine, in a statement.

Revenues for fiscal year 2009, which ends in October, are now projected to be $7.435 billion, some $871 million below the estimates released in January. Revenues for fiscal year 2010 are expected to come in low, at $6.95 billion, which is down nearly $1 billion from January’s estimates…

So, any bright ideas out there? Here, to get the ball rolling, are my thoughts.

We have to retool our state economy to focus on wind, advanced vehicle electrification, and mass transit, while continuing to support agriculture and the arts. As we have a core competency in manufacturing, we should be building things here. We should be building wind turbines, car batteries, and train cars here in Michigan. And, we should do whatever it takes to empower entrepreneurs to see those things accomplished in the state. We should leverage what we have before we lose it forever. As I type this, the Chinese are buying up our manufacturing infrastructure at auction, and other states are siphoning off our best and brightest people. Soon, we won’t have anything to leverage, so it’s imperative that we move quickly. I don’t know if it’s possible, but, if the state had a comprehensive plan, I wonder if we might be able to sell bonds, or establish another way for people around the country to invest in the state. And we should think big. We should find a way to defer student loan payments for our college graduates that want to stay here, especially the entrepreneurs among us who want to start companies. And, we should fix Detroit. It would be a massive undertaking, not unlike the rebuilding of Japan after WWII, but that’s what we need. It’s time to put aside divisive partisan politics and focus on real, long-term solutions. We can’t go down without a fight.

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  1. Von
    Posted May 16, 2009 at 12:40 pm | Permalink

    Looks like we’re going to get small government the hard way from running out of revenue, whether we like it or not. Have fun trying to central economic plan your way out of reality. We need less regulation, lower taxes, and lower labor expenses to bring real productive jobs to Michigan. That’s all we need to spur real creative thinking and empower entrepreneurs. I’m not trying to make people angry, but grand creative visions have to be founded on economic reality.

  2. Posted May 16, 2009 at 1:15 pm | Permalink

    One of my students mentioned something about drugs being bad the other day. I used it as “teachable moment”–rah rah don’t do drugs stay in school yay you! But then he said, “Why don’t we make weed legal?” He actually had worked it out…we grow it (well, I guess farms could) and the state could tax it (they know all about taxes and “that FICA dude” from our class “paychecks” and bank accounts). (He didn’t say this, but I thought that tourism would perk up too–hell, we’d be the “Amsterdam of the Midwest”).

    I said that I’ve never done illegal drugs so I really didn’t know what to say (honest, not even pot) but this might be an interesting little research project…why is pot illegal, why is tobacco legal (a legitimate question raised by another kid) and so on. Of course by lunchtime, he’d forgotten about it in favor of looking up motorbikes on the Internet. But, it does bring up a nice little economy all its own. I know it won’t happen in the political climate, but it was interesting to me.

    PS: I should mention that I call this kid my retirement account…he’s going to be richer than all of us and assures me he will remember me fondly. First up, he wants to buy Harvard and turn it into a strip club.

  3. Brackinald Achery
    Posted May 16, 2009 at 3:10 pm | Permalink

    Legalizing weed is a great idea. I’m astounded that this most rediculous of ineffective prohibitions has lasted as long as it has.

  4. Ol' E Cross
    Posted May 17, 2009 at 10:30 pm | Permalink

    Here’s my idea.

    Everybody in the state cancels their cable TV and pays the $20 to $80 a month they save to develop the things Mark mentioned and then some.

    Shit. I asked for people to give something up. That’ll never work. That’s not “economic reality.”

    I’d suggest as an alternate closing sentence, “We will go down without a fight.”

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