In 1990, primarily because of another decline in the automobile industry, Blanchard was defeated for reelection by Republican state Senator John Engler. Engler instituted fiscal reforms that made Michigan first in the nation in new business growth and first among all industrial states in economic development in 1993. In five years, the state’s deficit of nearly $2 billion became a $1 billion surplus. The state’s growth in personal income was three times the national average, and unemployment reached its lowest level in nearly 20 years.
Michigan’s recovery was based on three factors: tax laws were changed to stimulate business growth and reduce property taxes on individuals; many state services were privatized; and welfare reforms were instituted, cutting off aid to able-bodied adults with no children and establishing retraining and community service alternatives for the unemployed.
In the mid-1990s, Michigan served as a national laboratory for experiments in government and economic reform. Michigan also reestablished itself as a leader in education, enacting a broad charter school program that permitted universities, community colleges, and other groups or individuals to open state-funded private schools within a school district. The state’s school financing system was changed in 1993, ending reliance on property taxes and increasing the sales tax. By the mid-1990s Michigan business leaders were seeking to expand manufacturing and attract high technology companies, rather than relying on the automobile industry. Michigan also joined other Great Lakes states to preserve natural resources and promote regional economic development. "Michigan" © Emmanuel BUCHOT, Encarta, Wikipedia
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