TRAVERSE CITY — Michigan’s most important economic development story, and to some extent the nation’s, is not what is happening in Lansing or Washington. Instead, it is unfolding in the grassroots campaigns for civic investments like the ballot initiatives that two communities outside of this Great Lakes city decided two weeks ago.

In Long Lake Township on Nov. 7, voters easily approved a small property tax increase to generate over $3 million to buy and preserve two large, forested parcels as public land. But in adjacent Leelanau County, voters handily rejected a similarly sized property tax that would have protected thousands of acres of farmland.

Here in fast-growing northwest Michigan, where new subdivisions and stores push ever farther into the countryside, many people view preserving farmland and open space as an important  tool for strengthening an economy built on scenic geography and a small town way of life. Yet the messages coming from the opposing results in these two open-space campaigns reflect sharp differences over exactly what the region should do to control and direct its growth.

Those are hardly the only recent examples.

Last August, 35 miles west of here, voters in Benzie County strongly approved a property tax increase to establish a public transit system that will provide the first scheduled express buses between the state’s second-fastest growing county and Traverse City, the region’s job center. But on the same day, Traverse City residents, many of whom decry the sprawling development and traffic outside their community, soundly rejected a proposal to build a new, downtown, mixed-used housing development and parking deck that would have helped slow sprawl. Critics said the project was too big and relied on too much taxpayer money.

These dramatically contrasting outcomes underscore the very intense, statewide discussion about how to secure the state’s well being in the face of a gale-force economic transformation that is producing two Michigans. One Michigan—the big winners—include the regions centered around Traverse City, Grand Rapids, and Ann Arbor (where Google is establishing an office and recruiting up to 1,000 employees), which are attracting jobs and new residents. The big losers, especially southeast Michigan, are enduring plant closures, white collar downsizing, falling home values, and migrations to other states and to cities along the Lake Michigan coast.

The difference between the strong metropolitan regions and the weak ones comes down to a difference in competing growth strategies. Cities that are winning, like Traverse City, Grand Rapids, and Ann Arbor, embrace economic plans that stress using public dollars for civic investments in existing neighborhoods, public transit, energy efficiency, and natural resource and land conservation. In those that are losing, leaders still support public spending policies that drain cities by building more highways and flinging new homes and businesses across the countryside.

Voters Embrace a New Strategy
There’s lots of evidence that many of Michigan’s leaders have yet to catch up with their constituents: In roughly eight of every 10 public referendums across the state since the late 1990s, voters have rejected those old notions and approved property tax increases to finance new ones: Building better public transit, investing in new parks, buying farmland, and financing public school improvements. They’ve also supported measures to conserve energy and water and guide development to appropriately planned areas.

That trend continued this year. In Ottawa County, for example, voters approved a 10-year property tax extension for parks and purchasing open space. Voters in Kalamazoo, Holland, Holland Township, as well as in Kalkaska, Macomb, Manistee, Oakland, Wayne, and Wexford counties approved property taxes to finance public transit. Kalamazoo voters also approved a tax increase to build the first new schools there in 35 years. Only in Lapeer and Leelanau counties did voters reject tax increases, in both cases for preserving farmland and open space.

This indicates that while more and more Michigan voters are embracing a new growth strategy, they still are wary of what they consider to be government intrusion in the marketplace. That cautiousness was best expressed in the statewide vote, by a margin of 80 percent to 20 percent, on Proposition 4, which enshrines in the Michigan Constitution a decision by the Michigan Supreme Court forbidding local governments from using eminent domain to hand over condemned property to private companies. Eight other states in November — Arizona, Florida, Georgia, Nevada, New Hampshire, North Dakota, Oregon, and South Carolina — approved similar prohibitions by similar margins.

Yet voters’ concerns about taxes and government is exactly what Republican gubernatorial challenger Dick DeVos tried to exploit in his campaign to unseat Michigan Governor Jennifer Granholm. He worked hard to convince Michiganders that the best way to attract new businesses and jobs to the state was to keep cutting taxes and reduce regulations. But all of his efforts, including the huge amount of personal money that he spent on nine months of TV campaign ads, earned him just 42 percent of the vote.

Democratic Governor Jennifer Granholm fought off Mr. DeVos by tying him to President George W. Bush’s tax-cutting and big business trade policies. When pressed hard about the state’s continuous hemorrhaging of manufacturing jobs, Governor Granholm touted a complex, year-old, billion-dollar investment strategy that recruits entrepreneurial companies and makes it easier for them to market inventions and products developed by the state’s research universities. The governor also continually asserted that Michigan’s economic woes simply cannot be cured quickly. She won 57 percent of the vote and 55 of Michigan's 83 counties.

Lost in the Shuffle
Neither candidate talked much, if at all, about building a new state economic development strategy based on public transit, natural resource conservation, open space protection, and quality of life improvements—precisely the things so many of their fellow Michiganders have so consistently supported in grassroots initiatives, and the very same ideas the governor used to win her first successful gubernatorial campaign, in 2002.

That baffling disconnect could change, though, if Ms. Granholm and other newly elected and re-elected leaders of both parties pay serious attention to the results of the 2006 election—both in Michigan and in other states, particularly California.

As it was in Michigan, public transit was a champ nationwide: Voters in 13 states considered 32 transit-related ballot measures and approved 70 percent of them, according to the Center for Transportation Excellence, a research group based in Washington, D.C. Spending on the initiatives will total $40 billion—bringing both immediate stimulus and long-term economic development tools to those local economies.

Even more popular with voters was public spending to conserve farmland and open space. Citizens approved 99 of 128 such ballot measures offered in 23 states—a 77 percent approval rate, according to the Trust for Public Land, a national conservation group based in San Francisco. By far the largest land conservation measure approved in November was California’s Proposition 84, which called for spending over $5 billion, including $2.25 billion for parks and land protection, with the balance going to improve drinking water, flood control, and coastline protection.

Proposition 84 was, amazingly, only part of an even larger initiative that California’s Republican Governor Arnold Schwarzenegger was pushing—his $30 billion-plus Rebuild California plan, the largest bond in state history and the foundation of that state’s new economic development strategy. It calls for $12.25 billion to repair and modernize highways, and $4 billion for light rail, commuter rail, and bus improvements.

As part of the package, voters approved spending $850 million for new urban housing, transportation improvements, and “transit-oriented development”—building new homes and businesses close to train stations and transit stops. A third facet of the program, also approved, calls for spending $10.4 billion to build new classrooms and other facilities at public schools and universities.

"The reason I think they were successful was because Democrats and Republicans worked together," Governor Schwarzenegger told reporters. The converse may well be true for Michigan: Because Democrats and Republicans have not worked together very well, the state is in danger of becoming a national economic backwater.

Time for Smart Growth?
Whether Governor Granholm embraces the grassroots election message coming from her state and so many others—or is able to foster the bipartisanship that Mr. Schwarzenegger can rightly boast about—is unclear. 

In 2002, Ms. Granholm gained the governor’s office in large part on a platform that stressed land conservation, public transit, rebuilding cities, and reining in the state’s sprawling development as essential to improving Michigan’s competitiveness. The idea was that Michigan’s well-being depended on securing its existing cities and suburbs through smart investments in transportation, housing, roads, public infrastructure, and land protection. Her very first act in office was establishing the Michigan Land Use Leadership Council, a bipartisan panel, to recommend measures to accomplish those goals.  

In 2006, Ms. Granholm’s campaign developed a much different strategy. She worked hard to raise doubts about Mr. DeVos history, honesty, and true intentions, and took more than twice as many as she won four years ago. Some editorialists noted the contrast in message from 2002 to 2006 and are urging the term-limited governor, who now has a split rather than a Republican-controlled Legislature, to renew her commitment to a new growth strategy that has been proven in other states.

“A 21^st-century economy—that term Granholm keeps using—doesn't flourish alongside urban decay,” said the Flint Journal in an editorial on Nov. 12. “Yet Lansing's politicians are not focusing on a substantial urban agenda to which Michigan's future is tied. And they won't unless Granholm leads. Fortunately, she's in a strong position to take on this political challenge. Her decisive re-election victory last week, coupled with her Democratic Party winning control of the state House, gives Granholm an opportunity to push a bold program to limit urban sprawl and channel investment in areas already developed.”

“Purchasing development rights from farmers,” the paper added, “forming effective regional planning agencies, building mass transit systems, and reducing the great disparity in quality among schools are all part of the recipe for creating the appealing metro regions fundamental to Michigan's revival.”

Click here to read a brief summary of transit, open land, and eminent domain referendums from across America.