http://www.forbes.com/lists/2006/9/06beststates_The-Best-States-For-Business_Rank.html

ranks the states on various elements (mostly derived from Moody's indexes):

* Business Costs: Index based on cost of labor, energy and taxes.
* Labor: Measures educational attainment, net migration and projected population growth.
* Regulatory Environment: Measures regulatory and tort climate, incentives, transportation and bond ratings.
* Economic Climate: Reflects job, income, and gross state product growth as well as unemployment and presence of big companies.
* Growth Prospects: Reflects projected job, income and gross state product growth as well as business openings/closings and venture capital investments.
* Quality Of Life: Index of schools, health, crime, cost of living, and poverty rates.

then comes up with an overall "best business climate" ranking. Michigan ranks 45th overall out of 50 overall. We're sucky in virtually all of the categories, as DeVos TV ads points out. The notable exception, though, is "Regulatory Environment", where we rank 2nd (behind Virginia) which Granholm literature references (haven't seen it in a TV spot).

Why are we rated so high here?
Why that hasn't translated into better overall success?
Who do you credit or blame for this?

The only other state that's in the top 5 in -any- of those elements that is in the bottom 5 in -any- of the other elements is Hawaii. Hawaii has the 5th best business climate with the 50th/absolute worst business costs, simply because it's an island in the middle of nowhere. A "regulatory environment" ranking is subjective, of course, but objective stuff they cite as factors in their ranking doesn't sound like Michigan's strengths. Our bond rating is average to above average at best, not the AAA-type ratings that 10 other states have. Our transportation funding and infrastructure isn't elite.

I could believe the entire index is just fucked. Under "Quality of life", the #1 top state is -- <drum roll please> --Iowa! Uh... yeah.

You know what the problem is?
Michigan keeps cutting the money they share with cities. The government needs to increase taxes and give more back to the cities.
If they do so, the cities will improve and more people will want to stay there. If people are relatively happy and safe in their cities, the jobs will come to them.
No longer do people follow jobs. Jobs follow people.
Create appealing cities and business will not be a problem.

I'm not sure that really addresses the problem. The states that are perceived to be "good for business" states tend to have less of a % of revenue sharing with their cities, AFAICT. The thinking goes that if you can drum up enough business, cities will get more overall dollars even with less of a cut. The best cities to set up business in are increasingly those small cities that not a lot of people live in. Greensburg, Indiana, the city getting that new Honda plant we supposedly "lost" (really never had a chance of getting) is this 10,000 person podunk town. If you look at where else Honda is, it's little business-friendly little towns that have space to grow and decent transportation (business go -near- where the people are). A business friendly city is a poor one that bows and kneels to Big Company.

AFAICT, the way revenue sharing works here is largely a function of state sales taxes. Some % of state sales taxes goes to the revenue sharing pool, and communities get their share based on population. There's a flexible "kicker" from the state's general fund to supplement the revenue sharing $ from sales taxes, which is:

- what Granholm has cut back a little to balance the budget
- state legislative Republicans wanted to cut back a bit more
- DeVos said he'd bump up when mentioned in the 3rd debate

but that's a relatively small % of the overall guaranteed money. One of the more-popular SBT restructuring proposals has involved raising the sales tax, but I have to believe that any radical tax code restructuring would change the revenue sharing model too.

I think transportation is the really big killer around Metro Detroit. Especially owing to all the lakes, we need efficient transportation paths. The People Mover and Haggerty Connector are two great examples of "cities who didn't get it" pissing on the state's business climate and not doing themselves or anyone else any favors in the process. Oakland County airport (home of Roundball One :) ) is one of the busiest airports in the nation, but doesn't have a real expressway anywhere nearby (no, M-59 doesn't count).

by efficient transporation paths, are you talking about public transportation (like subways, trains, etc)? or more efficient highway paths?

if you are talking about highways, is ours in michigan worse than those in other states?

The answer is yes. :)

We should have decent public transit. There's no excuse for there to not be train service or somesuch hooking up DTW Airport, the New Center, and the People Mover loop, at a minimum. Sprawl is mostly good, as it means more business is happening, no one's leaving, etc. But it needs solid direction at a statewide transportation level. How you plan/don't plan transit determines the geometry of the town and communities. Two lane loopy roads being the main drags for many cookie cutter subdivisions is stupid planning. Don't build the housing and build the roads later. There was evidence of solid planning that happened in the good ol' days. Look at the hub-and-spoke approach in Pontiac, with M-59, Woodward, Dixie, etc. intersecting at Wide Track. Now we have Lathrup Village stupidly wedged between I-696 and Southfield. Swell. I kinda like the road planning in Phoenix, but I'm not a civil engineer. They actually paid for roads that get completed without 25-year delays.

We were banking on flying cars to be here by now.

Those cities that have the revenue and attract the businesses may have cut back on state revenue sharing, but for Michigan it's to the point where the state has to start giving more to get things started. In order to turn this state around, taxes absolutely must be increased. You can never build a steady economy based on handouts, which is why most Republicans on the local levels are failing.

Well, you can't just give it to cities to go pay off companies to be there. That's scarcely any different than what would happen if the money were in the state. What city-level efforts would actually keep people around that aren't just some direct kickback?

As far as the initial questions I posted about the Forbes study, these guys did a far more thorough analysis of it than I did:

http://www.upjohninst.org/forbesappendix.pdf

It turns out that they factor in "growth" very heavily. If you're not growing, you're sucky for business. I'm sure Forbes looks forward to the day that states can do corporate takeovers of other states.

I'm not suggesting that cities "buy-off" companies. I'm suggesting that cities use the money for things like public safety, recreation, other local projects that make a city a more attractive place to LIVE. There is a correlation between places that are nice to live and places that attract new jobs.

Do you look at increased public safety, and recreational stuff within your city, as attractors though? Pick a city around here that would appeal to you to live in on that basis.

In the case of public safety, most people's goals are to live in a neighborhood that's not "bad", particularly one that's not so bad that insurance rates get jacked up because you're in that neighborhood. They don't pick Troy over Southfield because Troy is the 5th safest city while Southfield is 264th. They're not more or less likely to leave their kids unattended with strangers.

In the case of recreational stuff, look at downtown Royal Joke. once a "real" downtown but now it's devolved into a food court and hang-out spot. It's got "recreational" access down, but its population is on quite the decline. If you're talking about "recreational" like parks and seniors rec centers, that isn't a very powerful attractor of new people. (Lakes, on the other hand...)

When I look at big differentiators, I start with public schools and commutes, mostly to cities with jobs I might not necessarily want to live in. I worked for a company in Troy for a few years, and another company in Dearborn, but rarely felt all that inspired to live in either Troy or Dearborn proper.