Michgan Gov. Gretchen Whitmer's 2024 State of the State address outlined a comprehensive set of plans to address the state's challenges. Her speech emphasized lowering costs for families through a caregiver tax credit; educational initiatives, specifically pre-K for all 4-year-olds and a tuition-free pathway for community college; and several economic development strategies to encourage companies to make things in Michigan. For these programs to be successful, they must be designed and implemented carefully, in line with the best evidence.
The Promise: Investing in Community initiative at the W.E. Upjohn Institute for Employment Research focuses on producing evidence-based strategies for communities to create good jobs and equip residents with the skills and resources to work in them. Our research has identified several strategies for making the plans outlined in the address work effectively:
Caring for MI Family Tax Credit
- Make the tax credit refundable, meaning that taxpayers would receive the full value of the credit regardless of their tax liability. This will allow groups that tend to have lower incomes and no tax liability after other deductions—women, Blacks and Hispanics, and folks without college degrees—to benefit.
- Ensure that the credit a typical family would receive is sufficiently generous to assist them in providing care for loved ones.
Pre-K for Every 4-year-old
- Quality matters. Only pre-K programs of high quality have lasting positive effects on individuals who participated as children.
- Promote high-quality programs by ensuring adequate funding per child and opportunities to improve teaching through improvements to the compensation structure and enhanced training.
- Children from all income groups can benefit from high-quality pre-K, but the social benefits are likely to be greatest for disadvantaged students. Income-integrated programs are more likely to be high-quality, however, so the ideal program would be universal in scope, but also include targeting features to serve as many disadvantaged students as possible.
Tuition-free Community College
- Tuition-free community college represents a pathway toward upward mobility for residents and an investment in the economic vitality of the state. A half-dozen states have already made community college tuition free for all their residents, and the Michigan Reconnect program does the same for adults without college degrees.
- Program design is important. Choices about student eligibility and which institutions students can attend will shape who benefits and the impact on individuals, communities, and the state.
- Simplicity is key, both in the design of the program and how its benefits are communicated to students and families.
- It’s not just the money—supporting students is crucial, especially those without previous knowledge of colleges or strong networks. Guidance through critical junctures, such as high school-to-college and college-to-workforce, is essential. Work-based learning and other avenues for partnering with businesses will help students maximize their education and find good job opportunities.
- Michigan (and other states) should shift their mix of business assistance programs away from relying mostly on tax breaks for the largest firms, and toward services customized to help small and mid-sized businesses grow.
- To create more good jobs for Michigan residents, target a greater share of incentives towards economically distressed counties, aim for high-multiplier projects, favor projects that pay well relative to the credentials required, and coordinate with worker training and social assistance programs.
- Cap business incentives based on total business tax revenue and don’t poach from other revenue streams—especially education, because the harm to state residents’ earnings from cutting education exceed the plausible benefits from most incented projects.
Following the evidence when implementing, refining, or expanding these programs will yield greater benefits for the state of Michigan and its residents. The above recommendations show how it can be done.