(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ago, in a move that seemed designed much more to promote partisan interests than the public good, the State Legislature repealed the old Single Business Tax without any indication of how – or whether – the $1.9 billion in lost revenue would be replaced.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.
