All Michigan residents have a vested interest in the economic future of our state. We need all hands on deck as we sort out the ideas, resources and action steps necessary to get us back on course toward prosperity and growth. This report is intended to provide ALL citizens with an assessment of the financial health of Michigan’s state and local governments. For every $7 earned in Michigan, $1 is sent to state and local government in the form of taxes, fees, and charges for services. As a taxpayer, you deserve to know what your dollars are buying, and have a voice in making sure those services and programs are going to be appropriate to righting our ship. This report provides information on:
- How taxes and fees are collected and used across our state;
- The long-term consequences of today’s budget decisions—borrowing, debt levels, budget reserves; and
- The bills that are mounting for the future, such as public employee pensions and federal loans.
For this report, we have used the most recent information available. In most cases, this is for the 12-month period ending September 30, 2010. What does this report show? Largely, we find the following:
Michigan residents are earning less than a decade ago. Lower incomes mean less tax revenue and an increased need for government services. The result has been an ongoing structural imbalance in the state’s finances;
Many governments in Michigan are spending more than they are taking in. To support their spending, they have drained their savings, borrowed money, and failed to put money away for liabilities they know are on the horizon.
Michigan has been unable to invest in its future. State government expenditures on infrastructure and higher education, among other areas, have declined over the past decade;
State employee compensation in Michigan has grown while private sector compensation has fallen, inhibiting taxpayers’ ability to support the salaries and benefits of public employees, or to meet critical investment needs and assist Michigan citizens in financial distress. The state’s future has been mortgaged through extensive borrowing and accumulation of unfunded pension and retiree health care liabilities;
Years of high unemployment have rendered our unemployment compensation fund insolvent and created a greater demand for government services. Our system simply wasn’t built for this sustained level of hardship.
Please click “view PDF” below, for the full report. This report is also avilable at www.Michigan.gov/Snyder.
Please click here for a Supplemental Data Appendix.
Effective business tax incentive programs are imperative when a state is in economic decline, when its business tax burdens are considered uncompetitive for many industries, or when state budgets are strained. Michigan suffers from all three of these conditions. It can afford to pursue only the most effective tax incentive programs.
Unfortunately, there exists no comprehensive assessment of the effectiveness of Michigan’s tax incentive programs. The purpose of this report is to fill much of that gap, first by creating a systematic inventory of Michigan’s tax abatement programs, and second by evaluating the available evidence of their effectiveness in attracting and retaining businesses.
The Michigan Education Association and National Education Association commissioned this report to improve the quality of the debate on business tax incentives. The report was completed by the independent consulting firm of Anderson Economic Group, LLC, which has considerable expertise in business tax policy, tax incentives, and state tax burden comparisons.
Sandusky Main Street and the City of Sandusky contracted Anderson Economic Group (AEG) to develop a strategic plan to enhance its historic downtown which is situated along Sandusky Bay and Lake Erie.
To assess public concerns, habits, and preferences, AEG conducted an on-line survey and met with key project and district stakeholders. The on-line survey, which was promoted in the local newspaper and on stakeholder websites, received over 350 responses. After evaluating the survey and stakeholder responses, AEG analyzed market characteristics of Sandusky and Erie County (including the area’s demographic and socioeconomic profile), and the retail composition, spending behavior of its residents, and the implied opportunities for growth and expansion of specific retail categories. Through a supply – demand analysis, primary data analysis, market assessment, and interviews with local realtors, we also determined the number of residential units – both owner occupied and rental – at specific price ranges the local market could support.
Results from each of these analyses provided insight into the unique opportunities for future growth, and strategies the community can use to achieve their vision. AEG completed this project with strategies and specific recommendations for increasing residential use and diversifying the retail and entertainment offerings in the district. We provided the Sandusky Main Street with our analysis, key findings, and recommendations in a loose-bound report, complete with executive summary and appendices. Included in the appendices are detailed results from the public outreach process, demographic and socioeconomic analysis, several custom maps, methodology, and complete findings from the residential and retail supply-demand analyses. As a final task, we made presentations of our findings and the strategy to both the Main Street Organization and the Sandusky City Commission.
Following the termination of over 1,000 dealerships by General Motors and nearly 800 by Chrysler, federal legislation (HR 3288, Sec 747) was introduced to provide a procedure for the review of the termination decisions. The bill, signed into law on December 16 of 2009, established criteria for the arbitration process, which was organized through the American Arbitration Association. Among the criteria that arbitrators were to consider were the dealership’s profitability, economic viability, market territory, sales performance metrics, and the manufacturer’s business plan.
Seventy-three of the dealerships that pursued arbitration retained Anderson Economic Group for expert analysis in the areas of demography, geography, sales performance analysis, economic viability, and financial analyses. These dealers were located across 23 different states. Fifty-five were General Motors dealerships, and 18 were Chrysler dealerships.
We worked with each dealership to develop a plan of work that focused on the critical elements of their case. These included geographic and demographic assessments to determine if trade area’s were properly assigned, and if performance metrics accurately accounted for local market conditions. In a number of cases we also provided financial analyses to measure the economic viability of a dealership from a profitability standpoint, and to benchmark historic financial performance against an industry average. We also assessed the overall industry structure, economic conditions, and the business plans that manufacturer’s cited as reasons to support dealership terminations. In doing so we were able to illustrate inconsistencies in their positions, and demonstrate that, in many instances, the termination of dealerships was actually harmful to the manufacturer’s economic interests. We also provided consultation regarding settlement and hearing strategies, as well as rebuttal to opposing expert analyses.
Our analyses were used by dealerships to evaluate the strength of their case, to negotiate favorable settlements prior to arbitration, and in 19 cases our experts presented findings before an arbitrator. By the end of the arbitration process more than 90 percent of our clients had received favorable financial settlements, or had been reinstated as dealerships.
Constructing and maintaining basic infrastructure is one of the core functions of government. Investment in infrastructure, including roads and bridges, is important for enabling commerce and for the convenience, safety, and recreation of citizens.
The Michigan Chamber of Commerce commissioned this report to inform public discussion of the proper level of funding for building and maintaining Michigan’s road infrastructure. This report describes Michigan’s trunkline road system and the Michigan Transportation Fund (MTF); provides a credible, conservative estimate of the impact of several levels of funding on the state economy; discusses the impact that road infrastructure has on the safety and expenditures of Michigan households; and discusses the importance of our state trunkline roads to key Michigan industries.
Detroit Tigers 2008 Net Economic Impact from Attendance
For a complete copy of the paper, please order by clicking here.
Anderson Economic Group, LLC, is an economic consulting firm with offices in Chicago, Illinois; East Lansing, Michigan; and Los Angeles, California. We have prepared this independent analysis of the likely economic impact of the proposed 2016 Summer Olympics in Chicago, and are making it publicly available before the IOC announcement date of October 2, 2009.
We are preparing this study to provide other Chicago-area businesses, as well as taxpayers and policymakers, a realistic assessment of the actual costs and benefits of hosting the games. Our analysis of past major events, and our past evaluations of the value of sports-related and other businesses, gives us a unique position to carefully examine this question.
Boosters of large sporting events and stadium construction have sometimes claimed economic benefits that later proved far too good to be true. However, our analyses of both sports franchises, and cities in which sporting teams oper-ate, show that some events can provide economic benefits that far exceed the costs. Given the scale of the Olympics, and the exposure it would give to Chi-cago on a world stage, it is certainly worth carefully considering the costs, risks, and benefits.
We have used a rigorous methodology to estimate the likelly economic impact of events like the 2016 Summer Olympics.