In an October press conference, Gov. Jennifer Granholm argued that tax hikes are necessary. "What we're fighting for is Michigan not becoming Mississippi," she said. (See related story, "Mississippi Not Burning.")

The rhetorical flourish is undermined by the reality that Mississippi is no longer the "small government = high poverty" foil that Michigan's political class has often used to justify keeping their government employee constituencies well-fed with more tax dollars.

Plus, Mississippi has a growing economy — a concept that has begun to seem exotic in this state.

The evidence on Mississippi's changing fortunes is complicated, but tells the tale nevertheless. Whether its relative tax burden can be considered low depends on what exactly is compared.

For example, because Mississippi has been relatively a poor state going all the way back to colonial times, its per capita tax burden remains relatively low today.

However, its tax burden per unit of economic output (as measured by state Gross Domestic Product) is the 13th highest (Michigan is 18th).

Also, it's the 12th highest in terms of total state and local government revenue as a percent of personal income (Michigan is 15th).

Overall, a ranking of the structure of state taxes by the Tax Foundation places Mississippi in 21st place (Michigan is in 17th place, thanks largely to its flat income tax and lack of local government sales taxes). In general, Mississippi has a moderate tax environment, and is hardly the epitome of small-government.

That said, unlike Michigan, Mississippi has experienced some growth in this decade:

Over the last five years, Mississippi ranked 18th in per capita personal income growth. Michigan was dead last.

Mississippi's real (inflation adjusted) Gross Domestic Product rose by 5 percent over the last five years. Michigan's lost 4 percent.

Mississippi payrolls grew by 2.9 percent between 2003 and 2008. Michigan's declined by 5.8 percent.

While Michigan's poverty rate increased by 9 percent since 2005, Mississippi's has stayed about the same. Mississippi still has the highest poverty rate, but unlike Michigan, it's not getting worse.

If Michigan's political class is worried that failing to impose higher tax burdens on residents will make us "like Mississippi," they can relax. On the other hand, if finding new ways to deliver more for less tax dollars helps Michigan rediscover something Mississippi has been enjoying — economic growth — they'll actually have something to boast about. 

James M. Hohman is the fiscal policy analyst at the Mackinac Center for public policy. He may be reached at hohman@mackinac.org.

Property Rights Network: We call it smart growth, other folks call it urban planning, but as a concept, can you describe what it is?

Ikeda: Urban planning is the idea that you need some sort of central authority to guide the development of cities, economic investment and private development.

Smart growth is an approach to urban planning. It is a loosely based school of thought or planning philosophy that values high density, pedestrian walkability, de-emphasis of the automobile, close knit communities and extensive green belts that are placed around urban areas in order to discourage urban sprawl and to encourage increased population density.

PRN: There has been an interesting pattern that has emerged in the history of the United States. There was a time when population was pretty dense in cities. Then people started to move away. Now there seems to be a desire for dense cities again. Can you explain this cycle?

Ikeda: The cycle is caused by what I often call the dynamics of interventionism. It is a characteristic of most public policies. One intervention, to fix one problem, often generates unintended consequences — negative unintended consequences — that often frustrate the plans and intentions of the original planners or the original interveners.

In the earlier portion of the 20th century, social critics looked at cities as crime-ridden, dirty, disease-filled places, emphasizing the negative aspects. They decided to try and figure out a way to make lives better for individuals. Many of them took the radical view that you had to completely redesign cities in order to get rid of all the clutter, and get people to enjoy the countryside - have fresh air and sunshine.

By the 1950s and 1960s, people began to move from the central city to the suburbs. This movement was the result of a deliberate policy to get people out of the cities. After World War II, this sort of accelerated because of the investment of the federal government in interstate highways, and federal investment through the states and localities of infrastructure.

Fast forward a few decades in the 60s and 70s. Groups of social critics began to be concerned with the populating of suburbs and the low density that resulted. Cities began to lose culture and critics began to worry about the pollution being created by the commute from the suburbs to the cities.

PRN: How do you feel about advocates of smart growth and urban planning?

Ikeda: I like to attribute good intentions to the people who are promoting these various policies. I actually agree with many of their principles. I do think that in fact, density is important. I think that walkability is important. I think mixed uses are important. Rather than imposing it by force, however, there is historical evidence of these desired attributes emerging naturally within cities.

See more of this interview at www.mackinac.org/11364.