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Industry Insider

By Mike Johnston
VP of Government Affairs
Michigan Manufacturers Association
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On Sept. 27, 2010, the Michigan Manufacturers Association (MMA) proudly endorsed Rick Snyder for the next governor of Michigan. The endorsement process included a comprehensive review of the backgrounds and political platforms of Ann Arbor businessman Rick Snyder and Lansing Mayor Virg Bernero, a presentation from each candidate and a formal interview by MMA’s board of directors to discuss each candidate’s position on pro-manufacturing policies.

The endorsement interviews took place at the MMA headquarters in Lansing and focused on the key tenets of the MMA’s 2010 Structural and Economic Reform Agenda, such as implementing meaningful structural spending reforms; tax policy reform; measures and benchmarks to track the cost of state government and the cost of making products in Michigan, and changes in Michigan’s regulatory climate.

In the press release announcing the endorsement, the chairman of the MMA board of directors said, “We believe Rick has the best plan for Michigan and will use his business skills and acumen to improve the governmental process and move our state forward.”

To date, the state’s staggering budget challenges have been met almost exclusively by budget cuts. MMA believes that it’s imperative to implement fundamental reforms to address the chronic structural deficit, improve competitiveness and streamline government. Our agenda has offered several structural reform suggestions to the Legislature:

• Require benchmarking analysis in all regulatory programs to compare performance to other states.
• Require program efficiency studies in all government programs to eliminate waste.
• Pool all healthcare plans for public employees.
• Establish an Office of Medicaid Inspector General to specifically investigate Medicaid fraud.
• Reform Public Act 312 to change arbitration standards for police and fire.
• Reform Urban Cooperation to eliminate the requirement that when a service merger occurs, the higher wage and benefits must be paid, which blocks needed consolidation of local units of government.
• Require all new teachers hired by a certain date in the future to have defined contribution, rather than defined benefit, retirement plans.
• Move all administrative functions of local schools to the ISD, leaving local school boards with only academic and athletic functions.
• Incentivize the consolidation of school districts through the School Aid Fund.
• Privatize food service, mental health services, and transportation in prisons.
• Increase state employee and retiree healthcare premium co-pays.
• Eliminate duplication of the road patrol function of Michigan State Police and county sheriffs.
• Reduce mandatory minimum sentences to the national average for all crimes.
• Benchmark state employee compensation, setting a goal below the national average.
• Eliminate undocumented and potentially fraudulent childcare payments.

Snyder’s overall strategy to improve competitiveness and streamline government is well aligned with MMA’s Agenda and suggested reforms. For example, Snyder believes that the state should be run more like a business, and that means working from performance-based data to set goals and measure progress toward those goals. Becoming more economically competitive with other states and nations requires first measuring the factors that either drive or hinder economic growth. State government must institutionalize a benchmarking system by putting it in statute.

Snyder also understands that efficiency in the regulatory process is an essential component in attracting capital investment. Michigan’s regulatory system should make it easy for businesses to comply; however, the current regulatory environment makes it frustrating, time-consuming and costly to do business in Michigan.

As for tax reform, MMA believes the Michigan Business Tax (MBT) needs fundamental reform. Michigan needs to eliminate personal property taxes as most states have, we need to enhance economic development incentives to retain our large industrial base, eliminate the MBT surcharge, and eliminate the gross receipts portion of the MBT. For investors to bring high economic multiplier-effect manufacturing jobs to Michigan, we need a game-changing plan that will both retain and attract investment now.

Under Snyder’s 10-point plan, the MBT would be replaced with a flat corporate tax which would reduce the state’s tax burden, stimulate the economy and create jobs. MMA and Snyder agree that businesses should not have to navigate a complicated and unfair tax code, and the current tax system makes it difficult to do business in Michigan, costing our state jobs.

Snyder’s plan to “reinvent” Michigan will move Michigan in the right direction. We believe that Snyder’s business experience and leadership skills make him uniquely qualified for the challenges ahead.

As Chuck Hadden, MMA’s president and CEO said, “We look forward to the opportunity to work with Rick Snyder to make the structural changes necessary to rebuild the foundation of our state government to allow Michigan manufacturers to compete in the global economy.”

We have notified the MMA membership of our endorsement and encouraged our members to share MMA’s entire endorsement list with their employees. Michigan’s next governor will face many, many challenges, and we believe Rick Snyder will build a better Michigan.

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• columnist
• economic development
• industry insider
• michigan manufacturers association
• mike johnston
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