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West state leaders call for tax changes


Left to right: Phil Power, Louis Schimmel, and Michael Shae.  All appeared at the West Michigan Regional Policy Conference.
Left to right: Phil Power, Louis Schimmel, and Michael Shae. All appeared at the West Michigan Regional Policy Conference.

Photo credit: Michael Buck
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GRAND RAPIDS — West Michigan business leaders want Michigan’s new business tax gone.

That major change rose to the top of priorities voted on by attendees at the West Michigan Regional Policy Conference in Grand Rapids. And it raises the bar in business community efforts statewide that have focused on tackling the nearly 22 percent surcharge that was tacked onto the MBT – not eliminating the entire tax itself in tandem with corresponding spending cuts, as advocated by conferees.

Mike Jandernoa, principal in Bridge Street Capital Partners in Grand Rapids and member of the Grand Rapids Area Chamber of Commerce, the conference sponsor, said the attendees registered a “strong mandate” for a change “to help the state be more competitive.”

That wasn’t the only big item to emerge at the conference. Second on the conferees’ priority list was making Michigan a “right-to-work” state, through laws to prohibit unions from requiring worker dues and membership as a condition of employment.

In the area of health care, conferees said it was important to align medical payment rates with provider performance and costs. They also called for increased funding for providers with effective prevention practices.

On the subject of manufacturing and design for the future, attendees said it was important to improve the regulatory environment and in particular streamline the permitting process within state government.

And in the priority area of attracting and retaining talent, conferees called for new funding mechanisms for state transportation infrastructure.

Jeanne Englehart, president and CEO of the Grand Rapids chamber, said there is much on the west Michigan agenda that can be pursued with the southeast side of the state, and elsewhere.

“This wasn’t just about west Michigan,” Englehart said. “We really see this as a chance to make Michigan a better place to do business.”

Southeast Michigan business executives, at the Detroit Regional Chamber’s Mackinac Policy Conference earlier this year, put education, attraction and retention of talent at the top of their to-do list.

Immediate structural reforms in state government ranked second, followed by elimination of term limits, a regional transportation system for people and goods, and alternative energy.

The Grand Rapids chamber’s conference wasn’t the first time during the week that both taxes and right-to-work status surfaced as important measures to business leaders.

At a Tuesday public-policy conference sponsored by the Michigan Chamber of Commerce, one session showed Michigan CEOs consistently ranking Michigan as one of the worst states to do business, giving it an “F” grade on taxes and regulation and C+ on workforce quality. Top-tier states, in the annual nationwide CEO survey by Chief Executive magazine, generally had lower taxes and right-to-work laws.

But the question of whether such laws can contribute to economic improvement drew sharp debate at a Grand Rapids conference session.

Bill Black, legislative director of the Michigan Teamsters Joint Council 43, said such a change “is not going to help the economic problem in this state. That is the farthest thing from the truth.”

As example, Black cited Oklahoma, which he said lost more than 22,000 manufacturing jobs even after the state’s right-to-work law took effect 2001. He added that women in states with such laws earn less than their counterparts in other states, and the percentage of people without health coverage is higher in right-to-work states, driving up costs for others.

But Stan Greer, senior research director for the Springfield, Va.-based National Institute for Labor Relations Research, which he said is working to build legislative support for a Michigan right-to-work law, said unionization is generally “negatively associated” with profitability and job growth. He said job growth is higher in right-to-work states, and the cost of living is higher in states without such laws.

Birgit Klohs, president and CEO of The Right Place Inc., a Grand Rapids-based economic development agency, said that when the Right Place works with a company new to the west Michigan area, unionization is a question that arises. “When we are recruiting, the issue of Michigan’s image, as a union state, is not a positive one,” she said.

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Bridging 96 is a collaborative effort between Crain's Detroit Business and the Grand Rapids Business Journal.
I-96 is the interstate that links both sides of the state of Michigan, and with Bridging 96, we look at the ideas, initiatives and interests that tie the east and west coasts together.