Businesses generally seem supporting of Gov. Snyder's proposals to revamp the Michigan tax code, though it remains a gamble as to whether a lower tax structure on companies will be better for economic growth than the tax credits he intends to phase out.
Snyder proposes to eliminate the Michigan Business Tax and its accompanying array of tax credits and incentives and replace them with a new 6% corporate income tax on "C" corporations. The governor said the plan would result in a nearly $1.8 billion tax cut for Michigan businesses and a simpler, fairer and more competitive tax structure.
"Let's stop the tax credits and realize, in many cases, that the only reason they're in the tax code is because someone had more political power," Snyder said in presenting his budget. "We're eliminating all those credits. We will honor past credits, but it is time for simple, fair and efficient on the business side...It will make us among the most competitive in the country for business taxation" and will create jobs.
Snyder's budget would also eliminate tax credits for brownfield redevelopment, the Michigan Economic Growth Authority program -- a favorite stimulus tool of former Goevernor Jennifer Granholm -- alternative energy, film, renaissance zones and other areas.
Snyder's approach has won favor with groups such as Business Leaders for Michigan, the state’s business roundtable. It's a comprehensive approach to managing the state’s finances and making Michigan more competitive to create jobs.
“We support the Governor’s budget recommendation because, like the Michigan Turnaround Plan we proposed last year, it adopts multi-year budgeting, structurally balances the budget and reforms the tax system," said Doug Rothwell, President & CEO. "We urge the public and legislators to view it in its entirety and to resist picking and choosing elements of it. If taken as a whole it is good for Michigan and Michiganders.”
Business Leaders for Michigan strongly support the Governor proposing a two-year budget noting it is critical to changing the culture of fiscal planning in Michigan. “It is encouraging to see more of a long-term view of expenditures and revenues and an effort to address problems now instead of kicking them down the road,” Rothwell said.
In addition to improving budgeting practices and reducing spending, Business Leaders for Michigan applaud the Governor for addressing tax reform in his budget presentation. “Michigan’s most pressing need is jobs,” Rothwell said. “To grow jobs, we must become more competitive. Right now, Michigan’s taxes on job providers are among the highest in the nation, putting us at a disadvantage compared to other states and other countries. The Governor’s proposed tax changes will significantly improve Michigan’s ability to compete for jobs. We look forward to working with the Administration and the Legislature to make sure we are competitive both nationally and globally.”
MI Perspective: It's no surprise that businesses like the prospect of lower tax rates. What remains to be seen, however, is whether those rates actually do create jobs either among existing employers or by attracting new businesses. Companies and the consultants they hire to select job sites often respond very favorably to credits. Moreover, the cuts in funding for redevelopment programs will thwart improvements in blighted areas that are of no interest to anyone. Still, the worst-case scenario is that Snyder will fall in love with his perceived mandate for a conservative agenda as other new governor's like Wisconsin's Scott Walker whisper in his ear. An attempt to improve state finances on the backs of unionized employees would bring shame to a state built with the help of organized labor in an attempt to service to the unending greed of corporate CEOs and the GOP puppets who do their bidding.
Monday, February 28, 2011
Wednesday, February 16, 2011
Great Lake cleanup faces budget cuts
President Obama's proposed 2012 budget would cut $125 million from projected funding for the Great Lakes Restoration Initiative, and a Republican vision for the budget would cut even deeper.
Environmentalists say the funding cuts, coming via reduced funding for the Environmental Protection agency, would stall progress on addressing longstanding problems faced by the Great Lakes.
Much work remains to to prevent problems such as “beach closings and swimming bans,” says EBA Senior Advisor Cameron Davis. “Things like habitat loss and trying to clean up our toxic hot spots that continue to threaten public health and property values around the region.”
Another area that is addressed by the initiative is the prevention and monitoring of intrusive species like the Asian Carp. Thom Cmar, an attorney with the Natural Resources Defense Council, says money from the program has already helped build electric barriers to try to keep the fish out of the Great Lakes and surrounding waterways.
President Obama has called for $350 million for the initiative in 2012, down from $475 million in 2010. But House Republicans have proposed a continuing resolution that would decrease that number to $225 million.
Joel Brammeier, president of the Alliance for the Great Lakes, says the plan is meant to build year after year, so funding uncertainties can disrupt work on the ground and could lead to increased costs in the long run. That's because many projects are implemented in phases, and if too much time passes before they begin, changes might need to be made to engineering and construction plans.
Environmentalists say the funding cuts, coming via reduced funding for the Environmental Protection agency, would stall progress on addressing longstanding problems faced by the Great Lakes.
Much work remains to to prevent problems such as “beach closings and swimming bans,” says EBA Senior Advisor Cameron Davis. “Things like habitat loss and trying to clean up our toxic hot spots that continue to threaten public health and property values around the region.”
Another area that is addressed by the initiative is the prevention and monitoring of intrusive species like the Asian Carp. Thom Cmar, an attorney with the Natural Resources Defense Council, says money from the program has already helped build electric barriers to try to keep the fish out of the Great Lakes and surrounding waterways.
President Obama has called for $350 million for the initiative in 2012, down from $475 million in 2010. But House Republicans have proposed a continuing resolution that would decrease that number to $225 million.
Joel Brammeier, president of the Alliance for the Great Lakes, says the plan is meant to build year after year, so funding uncertainties can disrupt work on the ground and could lead to increased costs in the long run. That's because many projects are implemented in phases, and if too much time passes before they begin, changes might need to be made to engineering and construction plans.
Tuesday, February 8, 2011
Obama cites Michigan in speech
President Obama yesterday cited Michigan initiatives among the examples of economic recovery and why it's time to "invest in America."
Obama's remarks came in Washington in a speech to the U.S. Chamber of Commerce, group the president has feuded with extensively over the past two years. Specifically, he urged U.S. companies to invest some of the $2 trillion sitting on balance sheets back into economic growth. Citing examples of the merits of new growth initiatives, Obama made these references in his speech:
"The key to our success has never been just developing new ideas; it's also been making new products.So Intel pioneers the microchip, then puts thousands to work building them in Silicon Valley. Henry Ford perfects the assembly line, and then puts a generation to work in the factories of Detroit. That's how we built the largest middle class in the world. Those folks working in those plants, they go out and they buy a Ford. They buy a personal computer. And the economy grows for everyone. And that's how we'll create the base of knowledge and skills that propel the next inventions and the next ideas.
"Right now, businesses across this country are proving that America can compete. Caterpillar is opening a new plant to build excavators in Texas that used to be shipped from Japan. In Tennessee, Whirlpool is opening their first new U.S. factory in more than a decade. Dow is building a new plant in Michigan to manufacture batteries for electric vehicles. A company called Geomagic, a software maker, decided to close down its overseas centers in China and Europe and move their R&D here to the United States. These companies are bringing jobs back to our shores. And that's good for everybody."
Obama's remarks came in Washington in a speech to the U.S. Chamber of Commerce, group the president has feuded with extensively over the past two years. Specifically, he urged U.S. companies to invest some of the $2 trillion sitting on balance sheets back into economic growth. Citing examples of the merits of new growth initiatives, Obama made these references in his speech:
"The key to our success has never been just developing new ideas; it's also been making new products.So Intel pioneers the microchip, then puts thousands to work building them in Silicon Valley. Henry Ford perfects the assembly line, and then puts a generation to work in the factories of Detroit. That's how we built the largest middle class in the world. Those folks working in those plants, they go out and they buy a Ford. They buy a personal computer. And the economy grows for everyone. And that's how we'll create the base of knowledge and skills that propel the next inventions and the next ideas.
"Right now, businesses across this country are proving that America can compete. Caterpillar is opening a new plant to build excavators in Texas that used to be shipped from Japan. In Tennessee, Whirlpool is opening their first new U.S. factory in more than a decade. Dow is building a new plant in Michigan to manufacture batteries for electric vehicles. A company called Geomagic, a software maker, decided to close down its overseas centers in China and Europe and move their R&D here to the United States. These companies are bringing jobs back to our shores. And that's good for everybody."
Wednesday, February 2, 2011
Snyder offers Citizens Guide to recovery
Gov. Rick Snyder is ramping up to announcement of his proposals to improve Michigan's economic fortunes. But first, he has offered a stark look at state finances, with greater transparency than typical outlines from Lansing.
Snyder put forth a "Citizen's Guide to Michigan's Financial Health" — a simplified state balance sheet designed to show, in an easily understandable form, the state's finances.
The guide is designed to simplify the state's voluminous Comprehensive Annual Financial Report and provide greater transparency for Michigan's total financial condition — including the money that's coming in and going out, fund balances and outstanding obligations.
What citizens will see is a snapshot of spending and debt levels that exceed state tax revenue, unfunded pension and retiree health care obligations and a state "rainy day" fund that doesn't hold water.
Among the specifics: there is approximately $18.2 billion in unfunded state and local government pension obligations, encompassing $3.1 billion for the state, $3.1 billion for local governments and $12 billion for school districts; and a combined $40.2 billion in unfunded retiree health care obligations.
Some of Snyder's proposed solutions will become evident Feb. 17 when he presents his state budget and accompanying tax message. A centerpiece is Snyder's flat corporate income tax proposal that would eliminate deductions along with Michigan Economic Growth Authority tax credits -- a favorite vehicle for business investment incentives of former Gov. Jennifer Granholm.
Snyder put forth a "Citizen's Guide to Michigan's Financial Health" — a simplified state balance sheet designed to show, in an easily understandable form, the state's finances.
The guide is designed to simplify the state's voluminous Comprehensive Annual Financial Report and provide greater transparency for Michigan's total financial condition — including the money that's coming in and going out, fund balances and outstanding obligations.
What citizens will see is a snapshot of spending and debt levels that exceed state tax revenue, unfunded pension and retiree health care obligations and a state "rainy day" fund that doesn't hold water.
Among the specifics: there is approximately $18.2 billion in unfunded state and local government pension obligations, encompassing $3.1 billion for the state, $3.1 billion for local governments and $12 billion for school districts; and a combined $40.2 billion in unfunded retiree health care obligations.
Some of Snyder's proposed solutions will become evident Feb. 17 when he presents his state budget and accompanying tax message. A centerpiece is Snyder's flat corporate income tax proposal that would eliminate deductions along with Michigan Economic Growth Authority tax credits -- a favorite vehicle for business investment incentives of former Gov. Jennifer Granholm.
Subscribe to:
Posts (Atom)