Small Business Supports Repeal of PA 312

SBAM supports total repeal of Public Act 312, the law that requires binding arbitration to resolve disputes between public safety unions and local municipalities.

“PA 312 raises the price of government by mandating unaffordable labor costs for police and fire,” says SBAM’s President and CEO Rob Fowler. “High labor costs mean municipalities can find it more difficult to provide an entrepreneurial environment that’s friendly to small business formation and growth.”

Fowler says that while SBAM understands the interest of some groups in seeking reforms of PA 312, the organization believes total repeal is a better option.


Michigan Clean Diesel Recovery and Reinvestment Project RFP

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H1N1 May Lead to Back Door Approach to Mandatory Paid Sick Leave

Bills were introduced earlier in the year that would mandate that businesses provide seven days of paid sick leave for their employees.  To date those bills have not been given serious consideration, as Congress has dealt with more pressing issues.  However, the outbreak of the H1N1 flu has provided proponents of mandatory paid sick leave an opportunity to pursue the legislation in a different manner.

Proposals in both the House and Senate are surfacing that would require employers to provide paid sick leave to employees that contract the H1N1 flu.

The House bill would provide up to 5 days of leave and would only apply if the employer told them to stay away from work.  The Senate bill would provide up to seven days and the need for sick leave would be at the employee’s discretion.  Both bills would exempt businesses with under 15 employees.

SBAM and our national affiliate the National Small Business Association oppose any efforts to require businesses to provide paid sick leave.  We will keep you posted on the progress of these bills.

Gubernatorial Candidate Announces $6.5 Billion in Tax Increases

State Representative Alma Wheeler Smith (D-Salem Twp.) has announced a proposal that would increase tax revenues by $6.5 billion.  Smith, who has announced as a candidate for the Democratic nomination for governor, hopes to have the plan adopted by the end of January.

The proposed increases would come from three sources.  $3 billion would come from the elimination of various tax expenditures.  These are generally tax credits that benefit certain types or categories of businesses (including small business credits).  The plan does not specify which of these would be eliminated. 

Another $2 billion would come from changing the state’s income tax from a flat rate to a graduated income tax.  A graduated income tax would have escalating rates for higher levels of income.  The current income tax rate is 4.35%.  Under Smith’s proposal, the rates would change as follows:

·    A 4% rate for those making less that $45,000.
·    A 7% rate for those making between $45,000 and $60,000.
·    And a 9.75% rate for those making more than $60,000.
·    These income levels reflect single taxpayers so they would double for joint filers.

It should be noted that a graduated income tax would change the State Constitution and therefore require a ballot proposal.

$1.5 billion would come from expanding the sales tax to include services.  What services would be included or not included was not specified. The proposal would expand the tax to services, but would lower the current 6% rate to 5.5%.

Much of the increased revenue would go toward funding education programs, and $500 million would be used to eliminate the MBT surcharge.  While eliminating the surcharge is a top priority for SBAM, this price is too steep.

Alma Wheeler Smith is in her last term in the State House.  She also served in the Senate.

House Could Vote on Estate Tax This Week

Urge Congress to Support Permanent Estate Tax Relief

Please take a few moments to contact your lawmaker in the U.S. House of Representatives and ask for his or her support for finding a permanent solution for the estate tax.

Estate tax laws are under review in Congress ahead of the scheduled expiration of current estate tax provisions in 2010. One such piece of legislation is H.R. 4154, the Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009, sponsored by Representative Earl Pomeroy (D-N.D.). This bill could be considered on the House floor as early as Dec. 3. In essence the measure is a permanent extension of 2009 law. H.R. 4154 would make permanent a 45 percent rate on inherited wealth, providing individuals with a $3.5 million exemption and couples with a $7 million exemption. Unfortunately, the Pomeroy bill does not index the exemption level to inflation.

The estate tax quagmire stems from the Economic Growth and Tax Relief Reconciliation Act of 2001. The Act established a gradual decrease in the overall highest estate tax rate from 55 to 45 percent between 2001 and 2009, while raising the exemption amount from $675,000 to $3.5 million during the same period. Under the 2001 tax cuts, if Congress does nothing by the end of this year, the estate tax will disappear Jan. 1 and then return in 2011, with a $1 million exemption and a 55 percent top rate.

This temporary measure was enacted on the assumption that Congress would revisit the issue before 2009 in order to set rates at appropriate levels. But the absence of congressional action has left many small businesses and family farms in a state of uncertainty.

SBAM and our national affiliate the National Small Business Association have urged Congress to enact legislation this year that provides permanent estate tax relief for family businesses and farms. The uncertain nature of the estate tax regime over the next two years is a cause for major concern for family businesses, many of which are struggling to guarantee that their business survives into the next generation.

Your representatives in Washington need to hear from you on this important issue. Ask your Members of Congress to help small and medium-sized businesses by supporting legislation that would provide permanent reform of the estate tax.

Please click here to remind your elected officials that estate tax reform is a top small-business priority!