Detroit Evening Report: Michigan doesn’t earn enough revenue to fund population growth initiatives, experts say

Economists say Michigan isn’t generating enough revenue to pay for proposals to reverse the state’s population decline.

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Gov. Gretchen Whitmer assembled a bipartisan council last year to identify strategies to grow Michigan’s population. Among its findings, the group recommended more investments in the state’s public education system.

However, Michigan State University economist David Arsen thinks that will be difficult to achieve without raising taxes.

“The council’s vision for education cannot be implemented, beyond modest initiatives, without new revenues and a reversal of the state’s long term disinvestment in public services,” Arsen told WKAR.

As Michigan’s population continued to declined for decades, the state’s effective tax rate has also gone down — becoming among the lowest in the nation.

Arsen suggested the state could consider a graduated income tax where high-income earners would face a greater tax burden.

“We could make the needed investments to improve our workforce and infrastructure and still have competitive tax rates that are below our neighbors in the Great Lakes region,” Arsen said.

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