Michigan's economy has been riding the vanishing crest of the automotive wave for almost two decades now. The growth that steered state manufacturing sectors through the prosperous years of the '80s has subsided, and its traditional industries are ailing. A report by former University President James Duderstadt gave voice to the obvious: Michigan's economy is in a rut, and only with a renewed investment in higher education can the state hope to pull its weight in an increasingly high-tech national economy.

Michigan was once at the leading edge of the nation's economy, thanks in large part to the booming automobile industry and the manufacturing sector centered around it. Now, however, as companies move manufacturing jobs from Michigan to lower-cost states and countries, the state has found itself at an economic crossroads. Faced with two divergent roads - to attempt a rescue of manufacturing jobs by lowering taxes and labor costs or to rebuild the economy ground-up with a focus on human capital and knowledge - legislators must be courageous in avoiding the path of least resistance. While attempting to revive manufacturing is in the short term both easier and less expensive, only a complete transformation of the state's economic base can promise long-term prosperity.

Slowly opening their eyes to this reality, lawmakers in Lansing have begun deliberating higher education's part in building an educated, robust workforce. But for all the interest in higher education - and the consensus that higher education is vital to the state's future - there have been few concrete plans put forth. On one extreme, Duderstadt has drawn out proposals for new taxes that would secure sufficient funding to increase higher education appropriations by as much as 30 percent. Not surprisingly, conservatives - well aware of the state's dire fiscal situation and averse to new taxes - have called for less sweeping changes; members the state Chamber of Commerce have endorsed a plan that would reallocate existing funding toward specific fields of study deemed "useful" to the economy, such as natural science and engineering, at the expense of the "less useful" humanities and social science fields. Presented with these two extreme proposals, the Legislature should err toward Duderstadt's more expensive, but expansive, package. While tech degrees produce the most tangible and immediate economic results, it would be foolish to elevate them at the expense of other academic departments.

Several politicians have expressed concern over Duderstadt's proposal to increase taxes. Yet, while advocating tax increases is tantamount to political suicide, public opinion should not be dictating economic policy. While voters are generally averse to tax hikes, there is a growing consensus among public policy experts that suggest they can stimulate economic development when applied to worthwhile causes.

In both Massachusetts and California, higher taxes have enabled the state to pursue expensive yet lucrative public policy agendas. With a strong focus on higher education, the states have nurtured some of the nation's best-educated workforces and sustained enviable growth rates. Both states thrive off of research conducted at well-funded, prestigious universities such as the University of California at Berkeley and the Massachusetts Institute of Technology. Much of the technology boom in Silicon Valley, for example, was driven by research conducted at Bay area universities. In conjunction with lower-profile institutions, these universities have also produced a wealth of educated workers immediately ready to contribute in high-end, knowledge-based jobs. In Michigan, which lacks elite private institutions like MIT and Harvard University, public universities - led by the University of Michigan - will have to drive this economic renaissance. Higher state taxes, which could be directly translated into more generous higher education funding, will enable public universities to offer top-quality degrees and produce cutting-edge research while still maintaining affordability and accessibility.