What Governor Snyder’s Address Means For Northern Michigan

Representatives of the Northern Michigan Chamber Alliance were on hand in Lansing for Governor Rick Snyder’s seventh State of the State address on Tuesday, January 17, 2017. Below is a quick summary and analysis of areas where the Governor’s address intersect with Northern Michigan business interests.

Unemployment Rate & Personal Income Growth

Governor Snyder, as is typical in a state of the state speech, spent much of the beginning of his speech highlighting many of his and the legislature’s accomplishments over the past few years. He touted the drop in county unemployment rates across the state over the last six years, and specifically highlighted Alpena and Charlevoix counties as two that have cut their unemployment rates by more than half.

Areas for Growth – Breweries, Pure Michigan, International Visitors

The Governor highlighted that the state is fifth in the country in breweries, microbreweries, and brew pubs, and number four in hop production. Many of those breweries, as well as some large hop farms, reside in northern Michigan. Snyder also noted there is a great opportunity for barley growth and production in the state, and this seems to be an area where northern Michigan could have and edge.

Governor Snyder also mentioned the success of the Pure Michigan campaign and specifically mentioned that Michigan had the highest growth in international visitors of any state from 2014 to 2015. International growth is an area that northern Michigan communities could be poised to benefit from. While Governor Snyder touted the success of the campaign, he did not mention what the future of the campaign may be in this year’s state budget.

The Pure Michigan campaign is a budget item the Northern Michigan Chamber Alliance will want to see our legislators and Governor remain committed to.

Energy Legislation

Snyder mentioned the passage of energy legislation as one of the key legislative accomplishments from the past year. The Chamber Alliance was largely supportive of the energy package that passed in December, and believes it is a positive step for small businesses in northern Michigan.

Healthy Michigan Medicaid Program

Snyder was clear that he believes health care changes are coming to the country, but that he also believes Healthy Michigan is working and can be a model for the rest of the nation. He reported 640,000 people have signed up for the program, and that from 2013 to 2015 the costs of uncompensated care dropped by 44%. We have seen numbers since the address that show $235 million in savings to the state of Michigan. Much uncertainty surrounds both the federal Affordable Care Act, and Michigan’s Healthy Michigan Medicaid program, and it remains to be seen whether Governor Snyder and his team will be able to rally enough support in Washington.

The Chamber Alliance, along with the majority of other business allies across the state, supported the Healthy Michigan program and have been interested in how the program is meeting its defined goals of making Michigan healthier and reducing uncompensated care costs. The Alliance will also be tracking what these cost savings mean to northern Michigan, and how health care and health insurance might be impacted by future actions by Congress and the Trump administration.

Unfunded Liabilities

Addressing local units of government, the Governor talked about the issue of unfunded retiree health care and pension liabilities in communities around the state. He vowed to form a “collaborative work group” with local governments, the legislature, and local employees to come up with solutions.

A number of counties and communities in northern Michigan are faced with this problem, some more severely than others. There were no specifics, however, about what solutions might be on the forefront and what impacts those might have on communities and the state budget.

Infrastructure

Snyder tied in his comments on the Flint water crisis and a recent sink hole in Fraser to renewed discussion on the state’s infrastructure. He cited the work of the 21^st Century Infrastructure Commission last year in calling for billions of dollars in investment over the next several decades. He was not clear on where or how the investment would be paid for, but did call on the legislature to look into all public and private options – including fees, taxes, grants and bonds.

Snyder also called for creating a “pilot integrative asset management program” that would help streamline infrastructure investment like road repairs, water/sewer pipes, gas/electric, and fiber cable in local communities around the state.

One specific area of investment he called out was the need for a new 1,000 foot lock at the Soo Locks. Snyder reiterated his support for this investment and vowed to work with the President and Congress to make it happen. Add the Chamber Alliance as another partner in the work to make this a federal infrastructure priority.

Education

The Governor highlighted a number of achievements over the past year, including legislation to toughen standards on 3^rd grade reading and the creation of a 21^st Century Education commission. While Snyder talked a lot about investments the state has made in programs for STEM education skills training, there was, unfortunately, no mention of the per pupil funding gap between school systems in our state that disproportionately hurts most northern Michigan public school districts.

The Chamber will want to see an renewed emphasis from the Governor and legislators on making significant progress in closing this funding gap over the last two years of the Governor’s term.

Talent and Training

Governor Snyder spent a great deal of time talking about the success of talent and training programs implemented over the past few years. He called for an increased investment in community colleges and skilled trades apprenticeship programs. These are programs in which northern Michigan can and should advocate for more resources.

A few programs he brought attention to that are specifically available include the CCSTEP program that can help provide capital equipment to community colleges. He also mentioned growing programs such as First Robotics and Square One – all STEM based learning programs that have some roots in northern Michigan.

Place Making

Helping to create vibrant places around the state to work, play, and live. This is an area of priority for the Governor, but it is also an area that could use a little more focus on northern Michigan.

The Governor talked about the importance of place making and revitalizing downtowns and urban areas around Michigan, but was not specific about which communities or programs should get the majority of attention.  If past history is any indicator, however, we are likely to see a big focus on Detroit, Flint, and a few other select cities in southern Michigan. It’s not that those communities couldn’t use the push, but other communities in rural areas of the state are also looking for ways to upgrade their image. Communities like Gaylord, Kalkaska, Cheboygan, among others, are all in search of some help with their main streets to spruce things up, attract business and visitors. It is very likely these communities could see a major impact from some investment and it could be done for a portion of the cost of a larger city.

Snyder did praise a program called Rising Tide that focused on smaller communities around Michigan. According to Snyder, they took one community in each of the states 10 economic regions and helped provide resources on talent development, economic development, and community development. He mentioned specifically Evart as a northern Michigan community that was selected to be part of the program.  The Governor said it was his desire to continue the program and that each community would then pick another in its region to share and partner with in community and economic development.

Northern Michigan communities should look at how to get involved in the Rising Tide program if they could use resource assistance with talent, economic, or community development. The Governor, however, did stop short in his speech of committing any new state dollars or resources to the program.

Conclusion

Overall, the Governor’s seventh State of the State message shared a lot of achievements to be proud about as citizens of Michigan. The state has made some incredible economic leaps in his six years in office. The address also kicked off a new legislative cycle where the Governor and his team will be dealing with a new and even more conservative House of Representatives.

His speech was light on new programs or funding commitments, and was also very light on reference points to direct programs or measures in northern Michigan. He is very proud of a number of initiatives, such as M-City and work on autonomous vehicles, that take advantage of the state’s vast automotive and technology resources downstate.

It will be up to us to keep the northern Michigan business community in front of Governor Snyder’s team. This is a challenge the Chamber Alliance accepts, and does not take lightly.