The key driver of economic development in the world today is human capital. In a "flat" world where production can be shipped almost anywhere, education is the factor that gives one geographic area a long-term advantage over another. The availability of a well-educated work force is the reason technology companies still congregate in places such as Massachusetts and California, states whose tax rates and high cost of living would otherwise make them uncompetitive.
Yet in a time when developing human capital is critical, Michigan has turned its back on higher education. The Legislature cut state support for higher education by nearly 50 percent, about $1 billion, between 2001 and 2011. Several years ago we gained the dubious distinction of being one of the few states that spends more money on prisons than universities - 76 percent more this year. The result has been spiraling tuition rates that make it increasingly difficult for Michigan residents to afford the education they need to compete in the modern economy.
Reversing that trend was the subject of a conference in Lansing Monday sponsored by Business Leaders of Michigan. Several speakers drew contrasts between Michigan and North Carolina, a state with comparable demographics and economics. While Michigan spends $1.1 billion a year on public universities, North Carolina provides $2.5 billion. Grand Valley State University President Thomas Haas noted that his school is getting $2,365 per student in state funding this year, while the University of North Carolina gets $11,000.
Not surprisingly, a public university education in North Carolina is a whole lot more affordable than it is in Michigan. According to the State Higher Education Executive Officers, it costs an average of $38,125 in tuition and fees to earn a four-year degree at a public university in Michigan, compared to $18,877 in North Carolina.
Guess which state produces more college graduates?
Higher education is a concern for Business Leaders of Michigan because its members know they need an educated work force to remain competitive. Domino's CEO J. Patrick Doyle said at the meeting that Michigan needs nearly 1 million more two-year or four-year graduates by 2025 and has to turn things around. "Our state cannot afford to continue its recent trend of declining investment in the talent pool of tomorrow," he said.
We understand that our one-state recession made past levels of state support impossible in Michigan's "Lost Decade." And we don't believe that universities have done all they can to control costs and hold down tuition rates. But the connection between declining support and higher tuition is clear - in fact, tuition increases and state funding cuts were nearly equal in the last decade.
We know Gov. Rick Snyder "gets it." He received three degrees from the University of Michigan and speaks frequently of the importance of developing a talented work force in the state. That's one reason the 15 percent cut in funding public universities got in the current state budget was so galling. Now, as Michigan's economy recovers and a little more money becomes available to state government, Snyder and the Legislature must start directing more money to public universities. Of course we shouldn't just throw money at them with no strings attached - the state has to set clear standards on cost controls and make sure that schools rein in tuition increases. But the trend must be reversed.
Members of Business Leaders of Michigan understand that a state that fails to invest in producing educated workers is a state doomed to long-term economic mediocrity. If we're short-sighted enough to let current trends continue, we'll deserve that status.