SBAM Members and Staff in D.C. Next Week

As Congress and the White House prepare for President Obama’s bipartisan health care reform summit next Thursday, SBAM will be on the ground in Washington meeting with members of the Michigan delegation.

The election of Republican Senator Scott Brown last month left the future of the current health care bills in limbo.  Brown’s election means that the Democrats no longer have the ability to defeat a filibuster.  Likewise, voter disapproval of the plan has led the Obama administration and legislative leaders to reconsider their strategy.

Earlier this month, President Obama announced the formation of a health care reform summit to be held on February 25th.

Michigan Congressman Dave Camp has been named as a participant in the summit.  SBAM staff has scheduled meetings with Rep. Camp’s office and other members of the Michigan Congressional delegation to re-iterate the views of SBAM and Michigan’s small businesses as it relates to health care reform and the escalating costs of providing healthcare.

We’ll keep you posted.

Consideration Being Given to Withhold State Employee Raise

As part of state employee contracts, unionized employees are scheduled to receive a 3 percent raise later this year.  However, there is a provision in law that allows the legislature to reject the pay hike.

The House and Senate have until mid-April to pass by a two-thirds majority in each chamber a resolution which would cancel or lower the scheduled increase.

The move would save about $33.7 million.  The scheduled 3 percent increase for non-union employees was already rescinded as part of the Gov. Granholm’s budget proposal.

The resolution has not yet been introduced.  If the state feels that non-union employees should forgo a scheduled increase, then the same should be true for union employees.

Election 2010: SBAM to Sponsor “Great Debates” Series

SBAM and 18 other groups will be sponsoring a series of debates this election season.  Term limits will leave open seats for the Governor’s office, the Attorney General’s office and the Secretary of State.  Dozens of seats in the legislature are also up for grabs.

The state’s struggling economy and the role that small business will play in Michigan’s recovery are important issues that need to be a part of the electoral discussion this summer and fall.  SBAM believes that is important that the public be aware of the views of the candidates running for office. 

The “Great Debate” series will include three, one-hour gubernatorial debates-- one for each primary and one for the general election.  Also planned are 50 half-hour debates and forums and the legislative level.

The debates will be carried by public television and over the internet.

In other election news, last week we reported that former Treasurer Bob Bowman had filed paperwork to run for governor in the Democratic primary.  It turns out that he filed paperwork because he had begun to spend money as part of his decision making process.  This week, Bowman removed his name from consideration.

(Audio) Small Business Champion Podcast: Gov’s Tax Plan Long on Tax Hikes, Short on Real Reforms

Learn how you can fight the Granholm administration’s proposed sales tax on services. SBAM’s Michael Rogers talks with Vice President Government Relations David Palsrok about the tax hikes and less-than-robust spending cuts in the Governor’s plan.


Click here to listen.


What do you think of the proposed tax hike? Comment below or join the conversation in our Forum.


Governor Releases 2010-2011 Budget

Yesterday Gov. Granholm presented her fiscal year 2010-2011 Budget to a joint session of the House and Senate Appropriations Committees. Her proposal relies on a new sales tax on services, future reductions in the MBT, a large infusion of federal stimulus dollars and some reforms.

The sales tax proposal would lower the current sales tax rate from 6% to 5.5%, but it would expand the tax to include most consumer services. There are exclusions for health care, social assistance, education, new construction, real estate, insurance commissions, and services directly connected to business operations or business-to-business transactions.

The proposal does include business tax relief as well. The MBT surcharge would be phased out over two years beginning in 2011. The MBT’s gross receipts tax rate would be lowered from 0.8 percent to 0.6 percent over two years as well beginning in 2012.

Her plan also includes roughly $556 million in cuts and reforms to state operations, and also relies on approximately $700 million of federal money that has not yet been approved by Congress.

It is extremely disappointing that the administration did not lead more with structural reforms and cuts to meet the $1.7 billion structural gap in the General Fund/General Purpose (GF/GP) budget. Furthermore, the Governor relies on a new services tax while phasing in over time some reductions to the Michigan Business Tax (MBT). This represents a tax hike of over $500 million with a promise that the MBT will be phased out only after the Governor has concluded her service to the state.

We continue to work with our elected officials to pass meaningful reforms to the way government operates before they even consider any tax increases.

SBAM Testifies Before House Committee on Economic Development

This week, SBAM President and CEO Rob Fowler made a presentation before the House New Economy and Quality of Life Committee.

The central topic of the hearing was “Michigan at the Crossroads:  Ideas for Michigan’s Economic Development.”  Chairman Ed Clemente invited SBAM to speak on this important topic.

The SBAM presentation focused on economic gardening.  The concept of economic gardening is centered on an economic development theory that more should be done to provide a friendly business environment and the tools needed to assist businesses to start and grow in Michigan.

Fowler pointed out that currently the state’s economic development tools are primarily geared toward hunting.  Hunting is the idea of offering credits and incentives to attract companies to move here.  To support this argument we presented data from the Edward Lowe Foundation that looks at 15 years of job growth and loss.  The data shows that the vast majority of net job growth from 1993-2007 is a result of existing companies expanding; not new companies that come to Michigan.

SBAM contends that we need a more balanced approach with more of a focus on gardening and less on hunting.  Both should be used a part of Michigan’s economic development approach. 

The presentation also argued that we need to pursue a more horizontal approach rather than a vertical approach to helping businesses succeed.  One area of concern with the current strategy is that it awards businesses in certain types of industries instead of being a broad-based approach that would help all businesses.  The state should not be involved in picking winners and losers.  We should be helping businesses of all types grow and be successful.

We have been discussing the economic gardening approach with the various candidates for state office and will continue to do so throughout the year.

House Republicans Release Jobs Plan

This week, the House Republicans released a report that outlines their recommendations on how to improve Michigan’s economy and help create jobs.  The basic message of the report is that government should get out of the way.

The 33-page "Michigan Jobs Plan" is the work of the House Republican Strategic Task Force on Jobs. The plan culminates more than a year of research and fact-gathering from Michigan's job providers and business groups.

SBAM was one of the business groups that met with the task force to lend our thoughts and ideas to their report.  The report includes many proposals that SBAM has supported in the past and will continue to support in the current legislature. 

The challenge for the House Republicans is for their agenda to be taken up in the Democrat led House.  We will work with lawmakers on both sides of the aisle to make Michigan’s economy more competitive and to assist our small businesses.

To view the report click here

Election 2010

Bernero is in, Ilitch is out, Bowman is in and Ehlers retires.  It was another busy week on the Democrat side of the gubernatorial equation.  Also, long-time west Michigan Congressman Vern Ehlers announced that he will not be seeking re-election.

The question of who will be competing for the Democratic gubernatorial nomination is beginning to sort itself out.

This week, Lansing Mayor Virg Bernero announced that he would be running for governor.  Denise Ilitch, a Detroit area business executive with ties to the Detroit Tigers and Red Wings, has decided not to run, and former State Treasurer Bob Bowman (during the Blanchard administration) has decided he will run.  Bowman is currently an executive with, which handles Major League Baseball’s internet operations.

This leaves House Speaker Andy Dillon and former Genesee County Treasurer Dan Kildee as the potential candidates that still need to make up their mind.  Bernero and Bowman join State Rep. Alma Wheeler Smith as the announced candidates.

In other news, U.S. Congressman Vern Ehlers has announced that he is will not be running for re-election to the 3rd Congressional District in the Grand Rapids area.  The 76 year-old Ehlers will retire after having served 9 terms in office.

Ehlers decision will open up a Republican primary campaign that is likely to attract a great deal of attention.

SBAM in the News Opposing Tax Hikes

SBAM was prominent in the news media today as a leader in opposing Gov. Granholm’s proposed tax hikes:

From the Detroit Free Press: “The sales tax on services is one we can't accept," said Rob Fowler, CEO of the Small Business Association of Michigan. "The state needs new revenues, but the way to get them is a growing economy.”

From The Detroit News: “We think the state has to live within its means," said Rob Fowler, president and CEO of the Small Business Association of Michigan. He noted that many of the association's members -- from landscaping companies to hair salons -- would certainly be affected by the service tax.”

Read more about SBAM’s views on the Governor’s plan by clicking here.

What do you think about the Governor’s proposal? Comment below or engage in the discussion with your fellow small business owners in our Action Forum.