Gov. Jennifer Granholm announced a $2 billion plan intended to diversify Michigan’s economy and add nearly 72,000 new jobs, as she stood before the state Legislature last night for her third annual State of the State address.

Ken Srdjak
Jennifer Granholm makes her State of the State address in Lansing yesterday. Granholm discussed the economy, jobs and higher education.

Michigan has lost thousands of manufacturing jobs and has been plagued with an unemployment rate consistently above the national average during Granholm’s tenure. The state’s gradual shift from a manufacturing-based economy to one based on technology and service jobs has taken its toll on Michigan because the state was not ready to transition between sectors, Granholm said.

“We need to solve, in the next few years, a problem that is 30 years in the making,” Granholm said.

Part of her solution is to ask voters to amend the state constitution to allow Michigan to use $2 billion in bonds to invest broadly in economic initiatives, such as technology to make cars run cleaner.

The governor offered few details of how the $2 billion would be spent, something that state Republicans said worried them.

“What I heard tonight was extremely, extremely troubling,” State Senate Majority Leader Ken Sikkema of Wyoming said. “We were handed a speech today called ‘Jobs Today, Jobs Tomorrow.’ What I heard was ‘debt today, debt tomorrow.’ ”

Michigan’s constitution stipulates that the state may borrow money from the public so long as there is a specific purpose to which the funds shall be devoted — details Granholm has not yet offered. Speaker of the House Craig DeRoche of Novi took issue with the cost of the proposal.

“I’m alarmed at the willingness to mortgage the future of our children and grandchildren for Michigan,” DeRoche said. He and Sikkema said that the proposal is too large of a “bet” to place on the future of the economy.

But the $2 billion initiative is not the only solution Granholm proposed for Michigan’s uncertain economic future. She said that the future health of Michigan’s economy will depend largely on how well state residents are educated.

“Today, all children in Michigan must grow up knowing their education must not end in high school,” Granholm said. The largest determinant of individual wealth is a college education, according to the final report of the Cherry Commission on Higher Education and Economic Growth — created by Granholm and headed by Lt. Gov. John Cherry.

The commission, which University President Mary Sue Coleman was a commissioner on, was charged with giving recommendations on how to double the number of college graduates in Michigan over the next decade. The commission recommended that the state improve access to higher education and create an attitude among parents and students that higher education is necessary to get a job.

To achieve both goals, Granholm said she plans to create a new college merit award to replace the current award given to students who perform well on state standardized tests. The new $4,000 award would be available to college and technical school students in 2009, after they have finished two years of post-secondary education. By giving money to students after they have completed some amount of higher education, Granholm said she hopes to extend education for more students beyond their high school graduation.

The new award would replace the current award that was first administered under the Michigan Educational Assessment Program but has continued after Granholm and the state legislature eliminated the MEAP last month.

Sikkema said he believed the new award would encourage fewer high school graduates to enroll in college because the old award was a “deciding factor” in whether some graduates would enroll and be able to pay for college out of high school.

Michigan is ranked 44th in states whose 25- to 34-year-old populations have a bachelor’s degree or higher — the age group that will shoulder the ongoing transition of the state economy from manufacturing to high-tech and service jobs.

 

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