SBAM and Other Business Groups Applaud Leadership By Senate Republicans on Reform

SBAM, along with other business and trade organizations from around the state, today applauded the leadership displayed by Senate Republicans in their announcement of 10 bold reforms that could trim state spending by more than $2 billion. Taxpayers are demanding that elected officials be good stewards of their money and Senate Republicans are living up to that expectation by putting forth a comprehensive plan that can facilitate passage of a balanced budget without increasing taxes.
Rob Fowler, President and CEO of SBAM said, “Business owners large and small are making tough decisions to remain competitive in a down economy, so we are glad to see Senate Republicans are stepping up to the plate to force the state to live within their means.”

“Michigan is facing unprecedented economic challenges and enacting these reforms is exactly what Michigan needs to reduce cost barriers and be competitive in the global economy”, said Mike Johnston Vice-President of Government Affairs for the Michigan Manufacturers Association.

In September, statewide business and trade organizations released a list of 19 suggested reforms that the Legislature should undertake in an effort to combat chronic structural budget deficits. “We have been meeting regularly with Legislators in both chambers and both parties to urge them to reform and revitalize Michigan, these are exactly the kind of reforms we support and Legislators have indicated they would like to see enacted,” said Bill Martin, CEO of the Michigan Association of Realtors.

“The Senate’s bold agenda of reform demonstrates that tax increases are not necessary and the best path to job creation and a revitalized economy is by making government smaller and more efficient,” said Jim Holcomb, Vice-President of Business Advocacy and Associate General Counsel of the Michigan Chamber of Commerce.

Members of the coalition (which also includes the Detroit Regional Chamber, Grand Rapids Area Chamber of Commerce, Lansing Regional Chamber, Associated Builders and Contractors of Michigan, Kalamazoo Regional Chamber of Commerce, Michigan Association of Home Builders, Michigan Bankers Association, Michigan Association of Insurance Agents, Michigan Business & Professional Association, NFIB, Michigan Distributors and Vendors Association, Michigan Grocers Association, Michigan Soft Drinks Association and the Michigan Restaurant Association) look forward to working the Legislators on both sides of the aisle and both sides of the Capitol to enact cost-saving reforms that will move Michigan forward.

The 10 Senate Republican initiatives cover six key reform areas for an estimated total savings of $2.24-2.6 billion:

    * Public employee health care ($615 million in savings);
    * Local police and fire ($70-118 million);
    * K-12 school spending ($363-663 million);
    * Medicaid spending ($160-500 million);
    * Government efficiency (indeterminate); and
    * Public employee compensation ($1.2 billion).

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SBAM in the News

SBAM President and CEO Rob Fowler is quoted in today's Detroit News in a story healdlined "Small businesses in distress." Excerpt:

Businesses that are closing for lack of credit run the gamut, said Rob Fowler, president and CEO of the Small Business Association of Michigan. No one is safe, and there is no protection from banks that suddenly demand loans be paid back, even if the business has no cash to repay it. "This is an acute problem that's happening at a higher rate than last year," Fowler said. "It's very serious, it's very real."

Read the entire story here.


Union Tax Deal a Slap in the Face to Small Business

The announcement late yesterday that the White House brokered a deal with unions to exempt them from the proposed excise tax on so-called “Cadillac” plans delivered a stinging punch to small business. SBAM’s national affiliate the National Small Business Association (NSBA) has repeatedly called on Congress and the administration to seek alternative methods of paying for the bill as the excise tax will more than likely be passed on to small businesses.
“Contrary to all the pro small-business rhetoric we’ve heard from Congress and the White House, this back-room deal with unions sends a loud-and-clear message to America’s small businesses: we have other priorities,” stated Todd McCracken, president and CEO of NSBA.
As reported, the White House agreed to exempt unions from the excise tax on high-cost health insurance plans until 2018, while small business would be forced to pay it starting in 2013. The deal would raise slightly the threshold for the 40 percent tax to plans that cost more than $8,900 for individuals and $24,000 for families. The agreement also included the exclusion of vision and dental from the overall calculation—a minor concession.
For many months, NSBA has been warning against this tax because it will punish small businesses with plans that cost more simply due to the make-up their workforce. There is no specific prohibition against insurance companies avoiding the tax by charging higher premiums to all small businesses. Small-business owners will have to complete detailed and complex reports on every single company they use for their benefit plans. Finally, this tax is NOT indexed for medical inflation and will begin to ensnare more and more small businesses every year.
From day one, NSBA has been calling for a more reasonable and fair method of paying for this bill by simply limiting the tax exclusion for employer-provided health insurance.
There is little disagreement that small businesses have been hit the hardest when it comes to rising health care costs—back in 1995, 67 percent of small businesses offered health insurance, today that number is down to 38 percent. According to NSBA’s 2009 Year-End Economic Report—to be released Jan. 20—health care costs are becoming a larger barrier to job growth than they were just six months ago.
“Small businesses are barely staying afloat in this terrible economy and few of us can afford quality health insurance,” stated Keith Ashmus, NSBA chair and co-founding partner at Frantz Ward, LLP in Cleveland, Ohio. “Now that this agreement has let expensive union plans off the hook, small businesses are very reasonably apprehensive that we’ll be left paying their share of the bill.”


SBAM Leader Quoted in Detroit News Article "Congress' health reform puts some employers in tight spot"

SBAM board member Jerry Grubb, owner of Wee Discover Child Daycare and Learning Center in Waterford, was quoted in today's Detroit News article titled "Congress' health reform puts some employers in tight spot." Excerpt:

The House and Senate bills would provide sliding-scale tax credits for small businesses to help them pay for health coverage. But the Grubbs wouldn't qualify because the House limits the credits to businesses with fewer than 25 employees, while the Senate restricts the premium subsidies to those with no more than 25 workers. "I can't afford it," said Grubb. "To remain profitable, you have to make up a loss somehow. "You can raise the price of your product or you can cut wages. How does that help my customers or my employees?"

Read more here.


Small Business Sends Congress Health Care Reform Checklist

SBAM’s national affiliate the National Small Business Association (NSBA) sent a detailed letter to Congress urging their consideration of small business as they work toward combining the House-and Senate-passed health care reform bills. Of paramount importance to small business: contain and reduce the cost of health care.


In this tough economy, more and more small-business owners are being forced to make the tough decision between keeping their employees and keeping their health insurance. Congress must do everything in its power to make health insurance affordable NOW to ensure that small businesses can stop layoffs and start hiring.


In conjunction with the detailed letter, NSBA has compiled a comprehensive yet succinct checklist of what small business needs in any final reform package.  This list highlights pieces of both the House and Senate bills that are preferable to small-business owners, and suggests several critical changes. 


  • Oppose any employer mandate as a threat to job growth.
  • Support the House model for a strong individual mandate to ensure there would not be risk selection as healthy individuals opt-out until they need coverage.
  • Oppose Senate language that arbitrarily excludes the construction industry from the overall small-business exemption to the employer mandate.

Insurance Market Reforms

  • Support Senate language on market reforms such as guaranteed issue policies, the elimination of rating based on preexisting conditions and health status, and the 3:1 age rating rule.

Tax benefits for small businesses

  • Support the Senate version of tax credits
  • Include language to end the prohibition on self-employed business owners from fully deducting the cost of their health insurance—something all other business owners and workers are allowed to do.
  • Support the inclusion of Senate language (Section 9022) to establish simple cafeteria plans for small businesses.


  • Support Senate state-based health insurance exchanges in lieu of the House-proposed national exchange.
  • Oppose the Senate’s free choice voucher provision which could negatively impact other employees.

Rein-in the cost of health care

  • Support, expand and expedite Senate provisions on value-based purchasing programs and the Independent Payment Advisory Board to include all providers and facilities, and ensure small business representation on any such advisory board.
  • Support and expedite all Medicare pilot projects in the House and Senate proposals, and include adjustments to the sustainable growth rate formula for physicians and other providers in Medicare Part B within the context of this bill—not as stand-alone legislation.
  • Support as a good first step the Senate’s medical malpractice language that provides modest grants for state demonstration projects, and work toward more broad, long-term malpractice reform.

Coverage and Delivery Systems

  • Support the minimum actuarial value specified in the Senate proposal (60 percent) and ensure small-business representation and consultation on any council to develop and evaluate the required basic health insurance plan.
  • Include in final legislation the ability to use health savings accounts (HSAs) and health reimbursement accounts (HRAs) in combination with high-deductible plans. While neither bill is ideal, the Senate’s language on HSAs is preferable to the House proposal.
  • Support Senate language providing for “young invincible” policies and expand eligibility to certain small businesses.
  • Oppose a

SBAM President on Economic Turnaround Panel Discussion Jan. 27 in Lansing

SBAM President and CEO Rob Fowler will participate in a panel discussion/forum about Michigan’s Economic Turnaround -- Policy Innovation for Michigan’s Entrepreneurs on Jan. 27 in Lansing. The event, sponsored by the Michigan State University Institute for Public Policy and Social Research, will take place from 11:30 a.m. to 1:30 p.m. in the Mackinac Room of the Anderson House Office Building.

This forum will look at the policy needs of small business employers, incentives for pursuing new ideas, and supportive network tools that lend to future economic success.

There is no charge to attend. A light lunch will be provided on a first-come, first-served basis. Register by emailing or by calling 517-355-6672.