(Part 11 in an 11-week economic plan to get Michigan moving again and get our people back to work)

With all the challenges facing Michigan’s economy, the first thing the legislature needs to do is to make sure it’s not making a difficult situation even worse. Michigan citizens deserve a state legislature that is willing to work in the best interests of the people of Michigan – and not simply doing the bidding of a political party, the special interests, or a narrow ideological perspective.

As our next State Representative, I will insist on common-sense economic and budgetary leadership instead of the same old partisan gimmicks that have done so much to get us into our current economic mess.  We need new leadership in Lansing that is working every day to make sure we’re communicating a consistent message that all of us – Democrats and Republicans alike – are united around a common goal of boosting Michigan’s economic performance.

Unfortunately, that has not always been the case in recent years.  Two years ago, in a move that seemed designed much more to promote partisan interests than the public good, the State Legislature repealed the old Single Business Tax without any indication of how – or whether – the $1.9 billion in lost revenue would be replaced.  The uncertainty this political gimmick unleashed led two Wall Street ratings firms to downgrade Michigan’s credit the next day, making it more difficult – not to mention more expensive – for our state to borrow money for key projects like the 21st Century Jobs Fund.

Last year, the legislature made a bad situation worse, waiting until four hours past the last minute to enact the new Michigan Business Tax, which included a laundry list of services that would be taxed for the first time ever.  Before the ink was even dry on the MBT, however, the legislature was already talking about replacing the services tax with a different mechanism.  This uncertainty led to businesses across Michigan having to spend tens of thousands of dollars to prepare to collect a tax that was unlikely ever to be collected, costs that could have been directed to hiring new employees or providing health care to Michigan workers.  At the last minute, the legislature scrapped the services tax for a surcharge on the Michigan Business Tax’s base rate, a move that eliminated the savings under the new system for many businesses across the state.

Regretably, this same politicization of basic economic decisions continues even now.  After the legislature came together across party lines to swiftly enact the best-in-the-nation incentives to bring film industry investment to Michigan, the major film studios responded.  According to an article in yesterday’s Ludington Daily News, Michigan is likely to see $350 million spent this year on film production.  However, legislation has been introduced in the State Senate that would limit the amount available under the incentives.  Think about that for a minute: the fact that we’re even having this discussion shows just how effectively these incentives are working, and now we want to limit their impact.  Indeed, according to Rick Hert, the executive director of the West Michigan Tourism Association, since the legislation was introduced, the interest in making films in Michigan has “died off.”

At this time, we simply cannot afford more of the same political bickering that harms our state’s economic outlook.  We need to work together – across party lines and across the state – to provide the certainty all businesses need to make critical decisions about whether to expand existing plants, whether to invest in Michigan, and indeed, whether to remain here.  Uncertainty kills business.  We need a legislature that understands that basic fact, and works to eliminate the political delays that are holding us back.

(Part 10 in an 11-week economic plan to get Michigan moving again and get our people back to work)

Any effort to get Michigan’s economy back on track has to pay special attention to small business. Small businesses are the backbone of our economy and are essential to strong main streets, strong communities, and a stronger Michigan. Unfortunately too often, small business issues are left out of the political discussion with politicians focusing far more on how to help Wall Street than Main Street. Here are some common sense ideas on how to support Michigan’s small businesses.

First, we need Michigan state government to address some of the core issues affecting whether or not Michigan’s small businesses remain competitive. These include ensuring adequate infrastructure – whether roads or high-speed connections – to connect small businesses to the global economy; quality schools and training programs to ensure an educated workforce; affordable transportation and housing options for Michigan workers; and efforts to market Michigan to the world, connecting small businesses with potential customers. No small business could possibly afford to do all this on their own, and we need a state government to provide these essential services effectively and efficiently.

In addition, small business needs a state government that will work to make Michigan’s overall business climate more competitive and predictable. We should also streamline regulation to reduce the amount of time business owners must spend filling out paperwork and get them back to doing what they do best: running their business. We can also do much more in Michigan to promote an entrepreneurial culture, including tax incentives for potential small business owners that are ready to make the leap. We should also expand our efforts to enhancing the vibrancy of our communities, downtown business districts and neighborhoods. People on the street mean people in the stores, and efforts such as the Michigan Main Street program are good examples of the positive role state government can play in keeping our main streets strong.

Finally, small business needs a state legislature that understands how best to use economic development tools to approve our local and state economy. As an advisor to a new community investment fund, working to create jobs in our area, I have direct, relevant experience in using new tools to make Northwest Michigan more attractive for businesses deciding whether to locate and expand here. My experience serving as co-chair of the economic development committee for the Northport-Omena Chamber of Commerce also gives me first hand experience with local efforts to improve our economy, including efforts to expand high-speed internet availability, working with local businesses to identify economic development goals and working to build awareness of existing local businesses across the local community.

As our next State Representative, I look forward to continuing to build relationships with our small business community, and making sure they have the representation they deserve in Lansing.

(Part 8 in an 11-week economic plan to get Michigan moving again and get our people back to work)

As we work to diversify our economy, create jobs, and get our economy back on track, there is no doubt that creating a competitive and predictable business tax environment is crucial to our success.  As I’ve been arguing for years, we need to get back to basics in looking at business taxes in this state, ensuring that we’re providing a playing field that keeps rates low, minimizes compliance costs, gives businesses certainty in knowing what their tax liability is, and promotes – rather that discourages – job creation and growth.

This last point is especially important in a state working to lower our highest-in-the-nation unemployment rate of 8.9%.  Too often we continue to give tax breaks to companies that are moving jobs out of Michigan, and often out of the country, meaning that Michigan taxpayers are actually subsidizing the elimination of Michigan jobs.  That’s just crazy, and as State Representative I will end the tax giveaways for companies that outsource Michigan jobs.  What’s more, I will redirect those incentives into companies that are creating good-paying jobs in Michigan, putting our focus – and our tax dollars – back where it should be.

I will also take a hard look at business tax rates to ensure we’re competitive in comparison to other states and will ensure we’re giving the right perception to those businesses looking to stay, grow and locate in Michigan.  This table by the Federation of Tax Administrators shows how Michigan compares with state business taxes around the country.  The good news is that Michigan’s basic business tax rate of 4.95% is the lowest among the Great Lakes states that are often our chief competitors. (Ohio’s rate ranges from 5.1-8.5%; Indiana’s rate is 8.5%; Illinois is at 7.3%; Wisconsin taxes at a rate of 7.9%; Minnesota is at 9.8%; and Pennsylvania’s business tax rate is 9.99%.)  The bad news is that the 21.99% “surcharge” on Michigan’s business tax rate, a legacy of the debacle last year in enacting the new Michigan Business Tax, undermines both the competitiveness of our rates and the certainty businesses have in estimating their actual tax bill.  For this reason, I support eliminating the MBT surcharge in a way that protects key investments in areas like schools, public safety, and economic development.

This principle of predictability in our business tax structure is less obvious than the need to keep our rates competitive, but just as important to our state’s ability to keep and attract job providers.  The only thing worse than having a high tax bill is not knowing what your tax liability will be in the first place.  If you are a business looking to stay in Michigan, or locate here, or grow here, you simply can’t make that decision if you don’t know what your costs are going to be, and when we play games with our business taxes, or when we settle for confusing and complicated business tax structures, we’re scaring off businesses and jobs, regardless of how competitive we are on rates.  We need to do better.

Uncertainty also harms Michigan’s economic outlook in another way.  When the legislature in 2006 eliminated the old Single Business Tax without saying what would replace it, the reaction from ratings analysts was swift.  One day after this decision was made, Michigan’s credit ratings dropped, making it more expensive for the state to attract investment and providing less income in areas, like the 21st Century Jobs Fund, where we had issued bonds to jumpstart our economy.  Removing the certainty of our business tax setup made borrowing money more expensive, which meant we had less money coming in to attract the growth industries of the future, had less money to diversify our state’s economy and get Michigan back on track, and had less money to attract new jobs.  So we lost both in existing businesses, who had to make decisions without having any idea how much they would be expected to pay in taxes, and lost in our ability to attract new jobs to our state.  That’s the damage caused by uncertainty and a lack of predictability, and why I will work as State Representative to ensure that businesses have the certainty they need to invest and grow in Michigan.

Finally, while I firmly believe that it is essential to have a competitive and predictable business tax environment, it is also true that we can’t stop there.  There are some, like my opponent, who argue that lower rates are all we need to compete, ignoring the fact that our tax environment is just one of the many areas in which competition for jobs and business investment takes place.  The truth is we also need to ensure we’re doing all we can to build on our strengths, and promote business investment in growth areas like renewable energy and others where we’re well placed to compete and are already creating jobs; we also need to invest in education, including community colleges and universities, to ensure we’re creating the highly-educated, highly-skilled workforce that it takes to compete in a globalized information economy; and we need to strengthen Michigan’s infrastructure in everything from our roads to the broadband connections we need to compete in a new century.  As State Representative, I will be a consistent voice to make our business tax environment more competitive and more predictable, and I will also work to strengthen our hand in all the other ways in which we compete in today’s economy.  That’s the way to create jobs and get Michigan moving again.

(Part 7 in an 11-week economic plan to get Michigan moving again and get our people back to work)

Last summer, on a business trip out east, I decided on the way home to get off the interstate and travel some of the state highways and county roads that wound through the small towns I otherwise would drive right by.  In one of these towns I noticed an old brick schoolhouse located on the main street, and above the schoolhouse door, carved there into the stone, was a single word: Opportunity.

That idea, of education as opportunity, and a chance to make something more of yourself than would otherwise be possible, is even more relevant in today’s globalized knowledge economy than when that word was first carved into that stone.  And so today, as part of our comprehensive blueprint to get Michigan’s economy back on track, it’s time to look at the importance of investment in education to building the globally competitive workforce Michigan needs to compete.

In fairness, the language “building a globally competitive workforce” comes from my good friends over at the Center for Michigan, a non-profit “think-and-do-tank” that has been active in articulating a Common Ground Agenda for Michigan’s Future, working to move beyond narrow ideology and the petty partisan gamesmanship that has done so much to hurt our state and develop an action plan that addresses the big challenges we’re facing.  I’m honored to be a Founding Champion of the Center’s Michigan Defining Moment campaign, and I believe I am the only candidate for State Representative in Michigan, of either party, to serve as a Founding Champion for this effort.

As the Center points out, building this globally competitive workforce means going beyond the traditional K-12 approach to education and delivering the learning infrastructure necessary and relevant to the challenges of the 21st-century.  So here are five big ideas to make sure we’re delivering the opportunity only education can provide:

·                    universal, quality pre-school education for all Michigan children;

·                    additional teachers and support staff to reduce class sizes, providing the one-on-one attention that can boost student achievement;

·                    ending the inequitable funding formula that hurts local students;

·                    additional investment in higher education to keep tuition low; and

·                    greater funding for skills training (including expanding Michigan’s No Worker Left Behind program) for workers who have been displaced by changes to Michigan’s economy.

Today’s news that Tower Automotive is going to close their auto parts manufacturing plant in Traverse City, putting 350 local people out of work, shows the importance of investing in ongoing education and skills training, and I’m calling on Governor Granholm to make funds available through the No Worker Left Behind program to assist local workers in getting the education and additional skills they’ll need to transition to new jobs.  As I’ve written earlier, efforts such as these are essential if we’re going to weather difficult economic times, and we must and can do much more to ensure that those Michigan workers who have lost their jobs because of global changes to Michigan’s economy have the skills training they need to reenter the labor force at a competitive wage.

We know that education is absolutely crucial to increasing Michigan’s economic competitiveness in a global, information-based economy.  As State Representative, I look forward to leading efforts to ensure that, from early childhood through an affordable college degree to the skills training and lifelong learning opportunities for those currently in the workforce, we’re doing all we can to build the globally competitive workforce it will take to get Michigan moving again.