Originally Published: October 05, 2008 8:00 PM Modified: October 05, 2008 8:37 PM
CAPITOL IDEAS: Regions to Lansing: Focus on taxes, reform, keeping talent
By Amy Lane
Crain's Detroit Business
Crain's Detroit Business
LANSING -- Here's one thing on which business leaders in Southeast Michigan and West Michigan clearly agree: They want big change out of the Capitol.
From the West Michigan perspective, that includes eliminating the new Michigan business tax in tandem with spending cuts and reforms, and making Michigan a “right-to-work” state, as evidenced by sentiments registered by business leaders at the West Michigan Regional Policy Conference, held in September and sponsored by the Grand Rapids Area Chamber of Commerce.
In Southeast Michigan, focus includes structural government reforms in areas like corrections, with savings possibly used to reduce the nearly 22 percent surcharge tacked onto the MBT.
Both sides of the state see attracting and retaining talent as critical to the investment in the future of Michigan and its cities.
There's also a shared undercurrent of urgency, as seen at the Grand Rapids conference, the Detroit Regional Chamber's Mackinac Policy Conference earlier this year, and the Michigan Chamber of Commerce Future Forum public-policy conference in September.
“I think whether you're in Southeast Michigan, or the Lansing area, or West Michigan, businesspeople are very frustrated and concerned,” said Rich Studley, president and CEO at the Michigan chamber. “I think that is one of the things running through these events — that businesspeople realize that we are at a turning point, a critical period.”
He said there's a “growing sense in the business community” that Michigan needs to make bold, dramatic changes in public policy.
But it's not an easy task.
Bill Rustem, president and CEO of Public Sector Consultants Inc., a nonpartisan Lansing public-policy think tank, said major policy changes pose difficulties for lawmakers whose terms in office are limited.
“It's tough to step out of your comfort zone when you're a term-limited legislator,” he said.
Still, business leaders plan to push. The Grand Rapids chamber had already been working with other business groups in the area of state spending reductions, with the Grand Rapids group focusing on Medicaid reforms. The fruits of such partnerships could help toward the MBT goal, said Jared Rodriguez, the Grand Rapids chamber's vice president of government affairs.
He said the chamber will take the priorities identified at the Grand Rapids conference and look within the region to assemble task forces to study each issue and develop plans to move forward.
“We're trying to put together this playbook, and we're going to begin forming regional task forces in order to accomplish these goals,” he said.
Rodriguez said the chamber also will work with the Detroit chamber, Michigan chamber and other partners to see what issues can be jointly addressed.
Sarah Hubbard, vice president of government relations at the Detroit chamber, said the Detroit group doesn't “have any problem with elimination of the MBT and finding structural reforms to fill the hole.” But she said it's “a very high mountain to climb,” and the Detroit chamber, like some other business groups that include the Michigan Chamber, has focused on eliminating the surcharge.
“It's a smaller bite at the apple, and I think we could identify reforms that could be implemented against it more quickly,” she said.
The Detroit chamber is seeking corrections reforms and will be looking for lawmakers “to make some progress on this before the end of the year,” Hubbard said.
The Detroit-based CEO group Detroit Renaissance Inc. is calling on policymakers to address reforms in corrections, Medicaid, teacher retirement benefits and state government employee health benefits.
June Summers Haas, a partner in the Lansing office of law firm Honigman Miller Schwartz and Cohn L.L.P., said it's not surprising that business officials on both sides of the state are targeting the MBT, given the magnitude to which some companies are negatively affected.
Haas said, however, that “the likelihood that the whole tax could be eliminated is slim, no matter how much the Legislature wanted to do it.” The MBT is generating about $2.6 billion in state revenue, and “that is an enormous amount that you have to cut out of general fund monies,” she said.
Of that $2.6 billion, about $722 million is the surcharge that was added onto the MBT to replace revenue from the axed service tax.
The MBT took effect in January and Haas expects tumult to continue over the next year, as businesses determine whether they accurately calculated their MBT and disputes arise about how the law should be interpreted.
Right-to-work laws to prohibit unions from requiring worker dues and membership as a condition of employment arose both at the Grand Rapids chamber's conference and at the Michigan chamber's conference.
Public Sector's Rustem said it's “an important issue to discuss, but it's not a total solution to Michigan's future” and to transforming the economy. It's also an issue that may be “tough for the Southeast Michigan business community to buy into,” because of the prevalence of union relationships in the region, he said.
Hubbard said right-to-work has not been discussed much at the Detroit chamber, “but we've heard it frequently from West Michigan, and I think it's an area they could provide real leadership on. We'd have to talk to our membership about it. It's something certainly we'd like to hear more about, and how they propose to do it. But we have not delved into that issue.”
One area where the Detroit and Grand Rapids chambers align is on the importance of young, educated workers who are the most mobile sector of Americans.
Southeast Michigan business executives at the Mackinac conference put education, attraction and retention of talent at the top of their to-do list, and the conferees at the Grand Rapids conference also listed it as a priority and called for new funding mechanisms for state transportation infrastructure.
“We're right with them on talent,” Hubbard said. “We absolutely see the need for that, and we see how it connects to transportation funding. Public transit has been a priority of ours for decades. We know that young people are interested in transportation options.”
Rustem said the business community in Michigan “clearly recognizes that Michigan's got to change its approach, or it's not going to be successful in the 21st century.”
He said business groups now need to rally around a shared plan “to move the state forward.”
Amy Lane: (517) 371-5355, alane@crain.com
From the West Michigan perspective, that includes eliminating the new Michigan business tax in tandem with spending cuts and reforms, and making Michigan a “right-to-work” state, as evidenced by sentiments registered by business leaders at the West Michigan Regional Policy Conference, held in September and sponsored by the Grand Rapids Area Chamber of Commerce.
In Southeast Michigan, focus includes structural government reforms in areas like corrections, with savings possibly used to reduce the nearly 22 percent surcharge tacked onto the MBT.
Both sides of the state see attracting and retaining talent as critical to the investment in the future of Michigan and its cities.
There's also a shared undercurrent of urgency, as seen at the Grand Rapids conference, the Detroit Regional Chamber's Mackinac Policy Conference earlier this year, and the Michigan Chamber of Commerce Future Forum public-policy conference in September.
“I think whether you're in Southeast Michigan, or the Lansing area, or West Michigan, businesspeople are very frustrated and concerned,” said Rich Studley, president and CEO at the Michigan chamber. “I think that is one of the things running through these events — that businesspeople realize that we are at a turning point, a critical period.”
He said there's a “growing sense in the business community” that Michigan needs to make bold, dramatic changes in public policy.
But it's not an easy task.
Bill Rustem, president and CEO of Public Sector Consultants Inc., a nonpartisan Lansing public-policy think tank, said major policy changes pose difficulties for lawmakers whose terms in office are limited.
“It's tough to step out of your comfort zone when you're a term-limited legislator,” he said.
Still, business leaders plan to push. The Grand Rapids chamber had already been working with other business groups in the area of state spending reductions, with the Grand Rapids group focusing on Medicaid reforms. The fruits of such partnerships could help toward the MBT goal, said Jared Rodriguez, the Grand Rapids chamber's vice president of government affairs.
He said the chamber will take the priorities identified at the Grand Rapids conference and look within the region to assemble task forces to study each issue and develop plans to move forward.
“We're trying to put together this playbook, and we're going to begin forming regional task forces in order to accomplish these goals,” he said.
Rodriguez said the chamber also will work with the Detroit chamber, Michigan chamber and other partners to see what issues can be jointly addressed.
Sarah Hubbard, vice president of government relations at the Detroit chamber, said the Detroit group doesn't “have any problem with elimination of the MBT and finding structural reforms to fill the hole.” But she said it's “a very high mountain to climb,” and the Detroit chamber, like some other business groups that include the Michigan Chamber, has focused on eliminating the surcharge.
“It's a smaller bite at the apple, and I think we could identify reforms that could be implemented against it more quickly,” she said.
The Detroit chamber is seeking corrections reforms and will be looking for lawmakers “to make some progress on this before the end of the year,” Hubbard said.
The Detroit-based CEO group Detroit Renaissance Inc. is calling on policymakers to address reforms in corrections, Medicaid, teacher retirement benefits and state government employee health benefits.
June Summers Haas, a partner in the Lansing office of law firm Honigman Miller Schwartz and Cohn L.L.P., said it's not surprising that business officials on both sides of the state are targeting the MBT, given the magnitude to which some companies are negatively affected.
Haas said, however, that “the likelihood that the whole tax could be eliminated is slim, no matter how much the Legislature wanted to do it.” The MBT is generating about $2.6 billion in state revenue, and “that is an enormous amount that you have to cut out of general fund monies,” she said.
Of that $2.6 billion, about $722 million is the surcharge that was added onto the MBT to replace revenue from the axed service tax.
The MBT took effect in January and Haas expects tumult to continue over the next year, as businesses determine whether they accurately calculated their MBT and disputes arise about how the law should be interpreted.
Right-to-work laws to prohibit unions from requiring worker dues and membership as a condition of employment arose both at the Grand Rapids chamber's conference and at the Michigan chamber's conference.
Public Sector's Rustem said it's “an important issue to discuss, but it's not a total solution to Michigan's future” and to transforming the economy. It's also an issue that may be “tough for the Southeast Michigan business community to buy into,” because of the prevalence of union relationships in the region, he said.
Hubbard said right-to-work has not been discussed much at the Detroit chamber, “but we've heard it frequently from West Michigan, and I think it's an area they could provide real leadership on. We'd have to talk to our membership about it. It's something certainly we'd like to hear more about, and how they propose to do it. But we have not delved into that issue.”
One area where the Detroit and Grand Rapids chambers align is on the importance of young, educated workers who are the most mobile sector of Americans.
Southeast Michigan business executives at the Mackinac conference put education, attraction and retention of talent at the top of their to-do list, and the conferees at the Grand Rapids conference also listed it as a priority and called for new funding mechanisms for state transportation infrastructure.
“We're right with them on talent,” Hubbard said. “We absolutely see the need for that, and we see how it connects to transportation funding. Public transit has been a priority of ours for decades. We know that young people are interested in transportation options.”
Rustem said the business community in Michigan “clearly recognizes that Michigan's got to change its approach, or it's not going to be successful in the 21st century.”
He said business groups now need to rally around a shared plan “to move the state forward.”
Amy Lane: (517) 371-5355, alane@crain.com
Post a Comment
Advertisement
Advertisement
Advertisement