Creative tools to rebuild economy

Michigan has to aggressively pursue creative, proven approaches to help expand and attract businesses. An example of that is a new state law that gives community colleges a fresh economic development tool that can serve as a jobs catalyst. The colleges can contract with companies to provide customized employee training designed for their specific needs — at no cost.


That’s the kind of incentive that resonates with industries and makes Michigan more competitive in this economic downturn.


Skills needed for jobs — at all levels — are increasing and changing quickly in our new economy. The Michigan New Jobs Training Program allows the state’s 28 community colleges to incur debt, such as selling bonds, to finance training programs for companies adding new jobs or new businesses coming into the state. Bonds would be paid off from income taxes withheld from employers on the new jobs generated. Since the bonds are retired with dollars paid to the state as withholding taxes, there’s no cost.


A company can increase worker productivity and company profitability through these short-term, tailored training programs.


Community colleges can enter into these agreements until Dec. 31, 2018. There is no set number of jobs that must be created to be eligible to participate. However, companies will be responsible for as many jobs as the training contract states. So, if a company contracts for a training program for 15 people, but late in the process needs only 10 positions, the company will be on the hook for paying the equivalent of those taxes for the other five people.


The risk for colleges and taxpayers occurs if the new or expanding company fails. Then, the college must cover the debt. That makes it crucial that community college boards carefully screen prospective companies so taxpayers aren’t stuck with the tab. We are living in a period where a stable company could go belly-up in a relatively short period of time. But Michigan is also in a place where some risks should be taken to spur job creation.


Taxpayer dollars won’t be used to fund minimum wage jobs. Under the measure, companies must be paying workers at least 175 percent of the state minimum wage, which would be $12.95 per hour.


Gov. Jennifer Granholm signed the two-bill package Dec. 23. The Michigan Community College Association (MCCA) has an implementation team working on ensuring there’s uniformity in the contracts and other processes. Companies need that consistency. The first contracts could be entered into this summer.
The legislation was a bipartisan effort. Sen. Mark Jansen, R-Gaines Township, and Rep. Richard Hammel, D-Genesee County, deserve credit for recognizing the program’s potential and working with the MCCA to get it passed.


The program is modeled after a successful program in Iowa launched in 1983. Iowa has 15 community colleges and its program has awarded more than $719 million since its inception and created 165,375 jobs from 2,473 projects, according to the Iowa Department of Economic Development. Missouri, Kansas and North Dakota have also embraced the incentive idea.


There are only a few places where the Michigan law differs from Iowa’s. For example, Michigan’s program is open to any industry, where Iowa does not allow retail or health related services to participate.


The competition among states to recruit new companies or retain existing ones has never been more intense. Incentives such as this program can make a difference in the site selection process. Governor Granholm and lawmakers should be embracing every viable opportunity to make sure that workers have the skills and expertise to compete with those outside the state.


Michigan’s greatest economic resource is its workforce.