State Fails Higher Education Test

Article first appeared on The Detroit News

Business group says fund shift to prisons over colleges since ’02 threatens growth

The charts are sobering.

There, in stark type, stands a picture of Michigan that doesn't bode well for a state trying to break from the dysfunction of its past and embrace the promise of a growing, better-educated 21st-century future.

Between 2002 and 2012, state spending per student on higher education declined 35 percent even as public spending per prisoner increased 42 percent, Business Leaders for Michigan said Monday. In 2002, Michigan spent $2 billion on higher ed and $1.7 billion on prisons. A decade later, the state spent $1.3 billion on public colleges and universities and $2 billion on prisons.

Embarrassing? You make the call.

"We think it's going to affect our growth, if it hasn't already," says Doug Rothwell, president and CEO of the business group. "How do you best use the money that government takes in to drive growth? We think it's about people and infrastructure."

Now that Gov. Rick Snyder's Lansing has demonstrated the ability to balance budgets on time, reform business taxes and improve the state's business climate — critical goals of Business Leaders for Michigan's four-year-old turnaround plan — the group wants the governor and the Legislature to coalesce around spending priorities that attract and retain college graduates and spur economic growth.

"Ultimately, from a business point of view, we're interested in putting funds where we get the highest … return on investment — the best place to put the state's money," says Jim Nicholson, chairman of PVS Chemicals Inc.

Public higher education tops the list. The state boasts thousands of job openings in such hot sectors as nursing, industrial engineering and computer systems analysis, but roughly 80 percent of them require applicants to possess an associate’s degree or higher. And by 2020, according to data cited by Business Leaders, 900,000 workers in Michigan will need more than a high school diploma to land a job.

The implications are clear. As much as a restructured Detroit auto industry and a more business-friendly climate help, an under-educated workforce ill-prepared for the jobs of the present and future undermines the state's economic recovery and threatens longer term growth prospects.

Higher ed's predicament is not an accident. In the annual flailing that passed for budgeting in the Granholm years, higher education consistently got the shaft while other sectors (that happened, like prison guards, to enjoy strong union representation) benefited. Higher ed outlays account for less than 25 percent of general fund revenue, down from about 40 percent a decade ago, even as tuition and fees skyrocketed.

And prisons? Michigan's incarceration rate is higher than the average of Great Lakes states; its spending per prisoner is higher than the Great Lakes and national averages; and Michigan's prisons are generally smaller than those operating in other states, limiting the state's ability to reap economies of scale from operating larger facilities.

Worse, what does the fact that Michigan spends more on prisons than public colleges and universities say about its priorities today and its prospects to be competitive in the future? Not much good, particularly if the unmistakable trend goes unreversed.

That would be tragic. By now it should be clear to all but the deliberately deluded that Old Economy Michigan is quickly receding, that rising incomes and better job opportunities require more than a high school diploma, that smart higher education is as much about learning how to think and adapt as it is learning a set of skills.

Business understands that. Now the politicians need to demonstrate that they do, too.