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Industry Insider

By Mike Johnston
VP of Government Affairs
Michigan Manufacturers Association
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The 96th Legislature is well on its way into the new legislative session and the reform-minded Snyder Administration is working full-speed ahead to address the challenges of our state and to reinvent Michigan. Governor Snyder highlighted many of his priorities that coincide with MMA’s in his State of the State speech as well as in his 2011-2012 budget recommendations, and with the luxury of Republican majorities in both chambers, the MMA has made great strides toward accomplishing important policy goals of our 2011 Legislative & Regulatory Reform Agenda.

While business tax reform remains one of the top priorities on our agenda and we will continue to work together with the administration to ensure the effective tax rates on manufacturers are low compared to those nationally, there are several issues we have been advocating for a number of years that the legislature is now moving. MMA has participated actively with the business community in advocating on behalf of regulatory reforms that will streamline government. The legislature has begun to address this issue by changing arbitration standards for police and fire and cracking down on community health fraud.

In efforts to make Michigan more competitive in attracting job-creating investment, the House of Representatives and the Senate have both passed bills that would eliminate mandatory ergonomic standards. MMA has led the battle to block these onerous regulations for several years and now Gov. Snyder has identified it as a primary goal. Advocates for the new standard have failed to prove that it’s necessary for Michigan to go beyond the federal requirements and there is no clear evidence that a mandatory standard is more effective than a voluntary one. Once finally blocked, Michigan will be free of the lingering threat of that regulatory barrier.

No matter what laws or programs are enacted by the legislature, it’s essential for Michigan to benchmark all state government performance and compare it to that of other states not only to help identify government inefficiencies, but also to examine how Michigan could improve. Gov. Snyder unveiled a benchmarking concept in January through a website called “MIDashboard.” This website will serve as a way to track the progress the administration is making on 21 specific measures including unemployment and per-capita income. The measures are grouped in five categories: economic strength, health and education, value for government, quality of life and public safety. By measuring performance against the states that are growing their manufacturing sector, those with a similar economic base, and those with a similar per-capita income, we can be sure we are getting value for the allocated funds. MMA has called for performance benchmarking for state government in the association’s last two legislative agendas.

Although there have been gains in the past few years when it comes to reducing the cost of government, Michigan’s budget deficit for fiscal year 2012 is projected to be $1.42 billion. The causes are many, including long-term structural imbalance between tax revenue and spending. Gov. Snyder has made it clear he will bring spending into line without gimmicks or a general tax increase. MMA has proposed several reforms including benchmarking structural costs of state and local government and working alongside the Corrections Reform Coalition to reform corrections spending, and many of these reforms align with Gov. Snyder’s recommendations. MMA will continue to stand ready to support any common sense reforms that will help streamline government and reduce spending.

As the legislature works to address Michigan’s tax structure, MMA is dedicated to making sure our state is competitive and recognizes that not all sectors are the same. Manufacturing is Michigan’s largest business sector by gross state product and serves as the backbone to our economy. Unlike most other business sectors, manufacturing makes huge capital investments, hires highly-skilled workers, spends large amounts on research and development and purchases goods and services from countless local suppliers. It is essential that our new tax system recognizes this and ensures the tax rates on manufacturers are low compared to those nationally. MMA will continue to advocate for this and the additional policies that are outlined in our 2011 Legislative & Regulatory Reform Agenda to make our state competitive and advance Michigan’s future. We are working closely with the legislature and the Snyder administration to help move these policies forward, to make Michigan competitive for manufacturing investment.

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