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.
Thursday, January 13, 2011
City defaults could hit close to home
The prospect of cities declaring bankruptcy and defaulting on municipal bond obligations continues to worsen, with Detroit high on the watch list in financial circles.
One of the latest sentinels of the growing national problem is Jamie JP Morgan CEO Jamie Dimon. He expects to see more U.S. municipalities declare bankruptcy, Bloomberg News reports. His concerns echo those of others who have said the next major financial crisis will come from a wave of local government defaults, including famed investor Warren Buffett, who has called the municipal debt situation a "terrible problem."
"If you are an investor in municipals you should be very, very careful," Dimon said, according to Bloomberg. An increase in city defaults would ruin their credit rating make it difficult for other municipalities to continue borrowing money from bond investors.
Local governments have had to deal with painful erosion in tax revenue, which in some cases threatens to ruin budgets. Amid the severe financial downturn of the past three years, cities and states have had to severely cut back their spending, even as the need for their services has grown. While official bankruptcy remains rare, experts say there's trouble brewing.
To avoid such as worst-case scenario, Detroit planning officials have outlined steps that would eliminate key municipal services -- garbage removal, police patrols, road repair, street lights -- in some 20% of the city's 139 square miles. The plan is consistent with Mayor Dave Bing's plan to reconfigure Detroit to reflect it's declines in population and fiscal stability.
Neighboring Hamtramck, meanwhile, is one Michigan city that is quickly running out of services to cut. Michigan currently has 68 cities on its "fiscal watch" or "fiscal stress" lists, meaning these communities are at risk of running out of money -- some perhaps even early this year. Many communities, Hamtramck included, have seen sharp drops in their populations and tax base as laid-off manufacturing workers have moved elsewhere in search of new jobs.
Cities that do head for the red shouldn't count on Lansing for help. The Michigan state budget deficit for fiscal 2012 is forecast to be $1.85 billion, though some analysts suspect it will actually be more than $2.0 billion.
Welcome to office, Governor Snyder.
One of the latest sentinels of the growing national problem is Jamie JP Morgan CEO Jamie Dimon. He expects to see more U.S. municipalities declare bankruptcy, Bloomberg News reports. His concerns echo those of others who have said the next major financial crisis will come from a wave of local government defaults, including famed investor Warren Buffett, who has called the municipal debt situation a "terrible problem."
"If you are an investor in municipals you should be very, very careful," Dimon said, according to Bloomberg. An increase in city defaults would ruin their credit rating make it difficult for other municipalities to continue borrowing money from bond investors.
Local governments have had to deal with painful erosion in tax revenue, which in some cases threatens to ruin budgets. Amid the severe financial downturn of the past three years, cities and states have had to severely cut back their spending, even as the need for their services has grown. While official bankruptcy remains rare, experts say there's trouble brewing.
To avoid such as worst-case scenario, Detroit planning officials have outlined steps that would eliminate key municipal services -- garbage removal, police patrols, road repair, street lights -- in some 20% of the city's 139 square miles. The plan is consistent with Mayor Dave Bing's plan to reconfigure Detroit to reflect it's declines in population and fiscal stability.
Neighboring Hamtramck, meanwhile, is one Michigan city that is quickly running out of services to cut. Michigan currently has 68 cities on its "fiscal watch" or "fiscal stress" lists, meaning these communities are at risk of running out of money -- some perhaps even early this year. Many communities, Hamtramck included, have seen sharp drops in their populations and tax base as laid-off manufacturing workers have moved elsewhere in search of new jobs.
Cities that do head for the red shouldn't count on Lansing for help. The Michigan state budget deficit for fiscal 2012 is forecast to be $1.85 billion, though some analysts suspect it will actually be more than $2.0 billion.
Welcome to office, Governor Snyder.
Wednesday, January 5, 2011
Snyder cites goals to reinvent economy
Gov. Rick Snyder in his inaugural address called for a culture change in which cooperation, courage and innovation will lead the way to reinvented economy and enhanced quality of life in Michigan.
Snyder made his remarks on the Capitol steps upon taking the oath of office to become Michigan’s 48th governor.
“It is time to stop fighting among ourselves,” Snyder said. “It is time to solve our problems and create new opportunities.”
Snyder’s commitment to bipartisanship and public service was reflected in the inaugural ceremony, in which local and state leaders of both political parties were invited to participate. Detroit Mayor Dave Bing emceed the event and Grand Rapids Mayor George Heartwell delivered the invocation and closing prayer. The legislative majority and minority leaders shared the stage, which was not the case in previous inaugurations. Former Govs. Jennifer Granholm and John Engler also bridged the political gap by attending.
“We need to put party and geography aside and come together as Michiganders to reinvent Michigan,” Snyder said, but cautioned that getting Michigan back on track will require sacrifice and a new mindset:
“It won’t be simple or easy. There is no magic solution to our problems. But with most of our problems, there also comes opportunities. It will require shared sacrifice from all of us. Many have already made sacrifices. Many of us need to join those who have already contributed.”
Doing so will enable Michigan to achieve key goals such as becoming a globally competitive leader in innovation, creating more and better jobs and providing young people with greater opportunities and a bright future in the state.
Snyder pointed out the perils facing Michigan if its leaders continue to do business as usual.
“The old ways don’t work and it is time to start a new era,” he said. “This is our moment of opportunity to realize we have a bright future instead of a declining future.”
Michigan already has many building blocks for success in place, according to Snyder. Its world-class universities, unmatched natural resources and the entrepreneurial spirit of its people make Michigan unique. The inauguration showcased that theme by offering an abundance of food products grown or made in Michigan.
The governor said he looks forward to hitting the ground running with Lt. Gov. Brian Calley, legislative leaders and stakeholders across the state.
“I have been hired to represent all people of the state of Michigan and move us all forward together,” Snyder said. “We all want to live in a state of high expectations and results. We can only achieve extraordinary things if we aspire beyond traditional thinking. The old unbelievable needs to become the new achievable. Let today be the birth of a new chapter in Michigan’s history. Let today be the birth of the era of innovation and reinvention.”
Snyder made his remarks on the Capitol steps upon taking the oath of office to become Michigan’s 48th governor.
“It is time to stop fighting among ourselves,” Snyder said. “It is time to solve our problems and create new opportunities.”
Snyder’s commitment to bipartisanship and public service was reflected in the inaugural ceremony, in which local and state leaders of both political parties were invited to participate. Detroit Mayor Dave Bing emceed the event and Grand Rapids Mayor George Heartwell delivered the invocation and closing prayer. The legislative majority and minority leaders shared the stage, which was not the case in previous inaugurations. Former Govs. Jennifer Granholm and John Engler also bridged the political gap by attending.
“We need to put party and geography aside and come together as Michiganders to reinvent Michigan,” Snyder said, but cautioned that getting Michigan back on track will require sacrifice and a new mindset:“It won’t be simple or easy. There is no magic solution to our problems. But with most of our problems, there also comes opportunities. It will require shared sacrifice from all of us. Many have already made sacrifices. Many of us need to join those who have already contributed.”
Doing so will enable Michigan to achieve key goals such as becoming a globally competitive leader in innovation, creating more and better jobs and providing young people with greater opportunities and a bright future in the state.
Snyder pointed out the perils facing Michigan if its leaders continue to do business as usual.
“The old ways don’t work and it is time to start a new era,” he said. “This is our moment of opportunity to realize we have a bright future instead of a declining future.”
Michigan already has many building blocks for success in place, according to Snyder. Its world-class universities, unmatched natural resources and the entrepreneurial spirit of its people make Michigan unique. The inauguration showcased that theme by offering an abundance of food products grown or made in Michigan.
The governor said he looks forward to hitting the ground running with Lt. Gov. Brian Calley, legislative leaders and stakeholders across the state.
“I have been hired to represent all people of the state of Michigan and move us all forward together,” Snyder said. “We all want to live in a state of high expectations and results. We can only achieve extraordinary things if we aspire beyond traditional thinking. The old unbelievable needs to become the new achievable. Let today be the birth of a new chapter in Michigan’s history. Let today be the birth of the era of innovation and reinvention.”
Thursday, December 23, 2010
Population drop hurts MI influence
Michigan confronts additional losses in Congressional representation and federal funding in the wake of 2010 Census figures showing a 10-year population loss of .6% -- the only state population decline during that period.
In total, Michigan's population dropped to 9.88 million from 9.93 million in the 2000 Census. It was the state's first decline in the past 100 years, spurred by struggles in its core industries and the economic recession.
More than damaging the state psyche, the census results are used to proportionately dole out billions of dollars in federal funding for state and municipal projects. They also apportion the number of seats each state has in the 435-seat U.S. House of Representatives. In the latter category, Michigan lost one seat of representation, reducing its number of seats to 14, according to Census data.
The loss follows a 30-year trend, as the state has lost at least one seat in the House since 1980; Michigan lost two seats in 1990. Taken together with a modest 3.3% population increase in Illinois and virtually flat trend in Ohio, the entire Great Lakes region could potentially lose clout in Congress over issues of mutual interest. Moreover, the results are also used to determine the make-up of the electoral college, meaning presidential elections can be impacted when national results are considered.
MI Perspective: The 2010 Census data confirm what most residents knew by observation: Michigan is losing people. It should, however, lend new urgency to the need for a united campaign to the the country know Michigan is still alive and kicking. The talking points should includes efforts --and successes -- toward economic diversification, the states abundant natural and human resources, and overall merits in quality of life. A modest proposal from MI: A "Come Home to Michigan" campaign coordinating communication on the above themes. Not a PR initiative, but a coordinated effort applying the offices and resources of business, government and academia. Together we can do this.
In other 2010 data, the Census Bureau reported that U.S. population now stands at 308.7 million. The most populous state was California (37,253,956); the least populous, Wyoming (563,626). The state that gained the most numerically since the 2000 Census was Texas (up 4,293,741 to 25,145,561) and the state that gained the most as a percentage of its 2000 Census count was Nevada (up 35.1% to 2,700,551).
Regionally, the South and the West picked up the bulk of the population increase, 14,318,924 and 8,747,621, respectively. But the Northeast and the Midwest also grew: 1,722,862 and 2,534,225.
In total, Michigan's population dropped to 9.88 million from 9.93 million in the 2000 Census. It was the state's first decline in the past 100 years, spurred by struggles in its core industries and the economic recession.
More than damaging the state psyche, the census results are used to proportionately dole out billions of dollars in federal funding for state and municipal projects. They also apportion the number of seats each state has in the 435-seat U.S. House of Representatives. In the latter category, Michigan lost one seat of representation, reducing its number of seats to 14, according to Census data.
The loss follows a 30-year trend, as the state has lost at least one seat in the House since 1980; Michigan lost two seats in 1990. Taken together with a modest 3.3% population increase in Illinois and virtually flat trend in Ohio, the entire Great Lakes region could potentially lose clout in Congress over issues of mutual interest. Moreover, the results are also used to determine the make-up of the electoral college, meaning presidential elections can be impacted when national results are considered.
MI Perspective: The 2010 Census data confirm what most residents knew by observation: Michigan is losing people. It should, however, lend new urgency to the need for a united campaign to the the country know Michigan is still alive and kicking. The talking points should includes efforts --and successes -- toward economic diversification, the states abundant natural and human resources, and overall merits in quality of life. A modest proposal from MI: A "Come Home to Michigan" campaign coordinating communication on the above themes. Not a PR initiative, but a coordinated effort applying the offices and resources of business, government and academia. Together we can do this.
In other 2010 data, the Census Bureau reported that U.S. population now stands at 308.7 million. The most populous state was California (37,253,956); the least populous, Wyoming (563,626). The state that gained the most numerically since the 2000 Census was Texas (up 4,293,741 to 25,145,561) and the state that gained the most as a percentage of its 2000 Census count was Nevada (up 35.1% to 2,700,551).
Regionally, the South and the West picked up the bulk of the population increase, 14,318,924 and 8,747,621, respectively. But the Northeast and the Midwest also grew: 1,722,862 and 2,534,225.
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