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Wednesday, February 27,2013

A carrot for graduates

by Walt Sorg
Michigan is one of the dumbest states in the nation, but it’s not a matter of genetics or innate intelligence.

We aren’t trying hard enough. And we’re also losing too many of our best and brightest.

State Rep. Andy Schor thinks a better-educated Michigan will be a more prosperous Michigan. The Lansing Democrat has introduced a bill taking aim at Michigan’s cumulative IQ by helping prepare the workforce for the jobs of the 21st century — and keep them in Michigan.

Schor’s bill would authorize tax credits for up to half of a college graduate’s tuition if he or she stays and works in Michigan. The reimbursement would come through income tax rebates spread over five years. The bills are co-sponsored by the legislators who represent Michigan State University and University of Michigan: Sam Singh, D- East Lansing, and Jeff Irwin, D-Ann Arbor.

Michigan was wealthy through much of the 20th century because home-grown entrepreneurs like Henry Ford, Charles Durant, Walter Chrysler and the Dodge brothers started businesses here. The seeds planted by Ford, GM, Dodge and Chrysler served as a magnet for more manufacturing within our borders, encouraging Ransom Olds to move to Lansing. (We also became America’s pizza capital thanks to Detroit native Mike “Little Caesar” Ilitch and Ann Arbor’s Tom “Domino’s” Monaghan.)

A key to creating jobs and wealth is attracting and retaining talent. Lately, Michigan has been doing a lousy job.

Michigan ranks 35th among states in the percentage of adults with college degrees, due, in part, to the state’s 39th-place ranking in support for higher education.

The more education a Michigan resident has, the more likely he or she is to leave the state. While the net of immigration and migration for high school dropouts is zero, the state has a net loss of 0.9 percent for those with four-year degrees and 1.3 percent among those with post-graduate degrees.

How important is this loss? Consider how different might Michigan be today if another native son, the cofounder of the world’s third most valuable technology company, had stayed home. What would it have meant if East Lansing native Larry Page had not migrated to California, where he and Sergei Brin created Google?

For years, state government has used tax incentives to lure and retain businesses to the state. Schor thinks it makes good economic sense to do the same to counter the “brain drain.”

“If we are doing it for businesses, we should be able to do it for knowledge workers who will then attract businesses,” Schor noted.

There’s no argument over whether a better-educated workforce creates a stronger economy: It is a view shared by Business Leaders for Michigan, most economists and the Snyder administration. Right now, Michigan is falling short.

Bob Trezise, president and CEO of the Lansing Economic Area Partnership, says tuition reimbursement tied to staying in Michigan “would have more impact than anything else we did.” Trezise advocates what would amount to free tuition for any college student who stayed and worked in Michigan for a minimum of five years after graduation.

Schor says the challenge with retaining talent is a “chicken-and-egg” problem.

The top graduates want to find work. By providing a financial incentive to stay, the growing pool of college graduates would attract those jobs to the state. Multiple studies show graduates are looking for a great place to live and then try to find work there.

Schor’s legislation is modeled after Opportunity Maine, which has succeeded in slowing the exodus of talent from America’s northeast tip. Schor would expand on the Maine program by including students who earn graduate degrees — the workers most valued by knowledge-economy businesses.

John Austin, president of the Michigan State Board of Education, agrees with Schor that if the jobs aren’t there, young talent would spur them.

“Creating conditions that both help more of our people afford and realize needed post-secondary education … is a powerful and essential way to make Michigan more prosperous.”

The issue is especially relevant at MSU, which ranks ninth nationally in the number of foreign students. Twenty percent of this year’s MSU freshmen class is from outside the United States, including more than 1,500 from China. Most foreign students get their education here and then go home.

Retaining some of the top students from other states and nations could jumpstart the state’s economy.

As for logistics: Can a Democrat get the concept through the Republican Legislature? Schor, who was formerly a lobbyist for the Michigan Municipal League, understands that he needs GOP buy-in to his concept. He appears to achieved it.

Schor’s bill has caught the attention of state Rep. Mike Shirkey, R-Clark Lake, who chairs the House Committee on Michigan Competitiveness. Although Schor’s bill was initially referred to another committee, it’s likely to end up in Shirkey’s committee, which would take it up this spring.

Schor is also looking at using the state’s bonding authority to create a revolving student loan fund that could lower tuition borrowing costs for students.

(Sorg can be reached at sorg@lansingcitypulse.com)

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