(Video) Small Business Champion: Keep up the budget pressure

SBAM Vice President Communications Michael Rogers talks with SBAM’s Vice President Government Relations Dave Palsrok about recent progress on state budget talks at the State Capitol – and the need for small business owners to keep up the pressure on their state lawmakers.

Last Budget Passes Legislature, Issues Remain

Last Thursday, the Senate and the House passed the last of the budgets for the 2009-10 fiscal year.  They passed the School Aid budget by lowering the cut from 2.9% to 2.3%.

With that action, the House and Senate were able to live up to the agreement that Senate Majority Leader Bishop and House Speaker Dillon agreed to when they came up with a plan to balance the budget based on cuts and not tax increases.

Governor Granholm has signed most of the less contentious budgets with few vetoes.  Unlike regular bills, the governor is allowed to strike parts of appropriations bills, if she does not agree with what has been presented to her. 

The remaining budgets should be presented to the Governor next week.  From the start, Governor Granholm has indicated that she does not support the all cuts approach of the legislative leaders.  She has stated that the cuts are too large and there should be some sort of revenue enhancements to stave off some of the cuts.

The Governor is expected to veto perhaps whole sections of the budgets that remain.  However, it should be noted that she cannot add money into the budgets; she can only remove what is there.

We will keep you posted on developments as they unfold before the next budget deadline of October 31. 

Please see other stories related to the budget.

Senate Plan Would Repeal MBT Surcharge

As part of the deal to pass the school aid budget, the Senate also put together a plan to phase out the surcharge on the Michigan Business Tax (MBT) over three years.  The plan has many parts to it is unclear what will happen in the coming weeks.

Recall that the surcharge imposes an additional 22% on a business’s MBT liability.  Since its inception in the fall of 2007, repealing the surcharge has been one of SBAM’s top priorities to get the economy moving again.

The plan also includes another important SBAM priority by increasing and indexing to inflation the officer compensation threshold to qualify for the alternative profits tax.  The alternative profits tax is a simpler and less expensive tax that many small businesses qualify for.  It is based on a company’s gross receipts, their net profit, and what they pay the key officers of the company.

To pay for these changes, the plan as it passed the Senate would make a number of other changes including:
  • Freezing the earned income tax credit (this is a credit for low income taxpayers) for one year;
  • Reducing the film credit;
  • Reducing the brownfield credit and;
  • Allowing for a tax amnesty period for delinquent taxpayers.
Some of these revenues would also be used to supplement the School Aid budget.

The plan is not supported by Governor Granholm, and it is unclear what the House intends to do.

House Passes Tax Increases

Also last week, the House passed and proposed a number of tax increases that are intended to restore the some of the cuts that are included in the budget bills.  The one that has received the most attention thus far is a tax on physicians.  The tax would charge doctors’ offices and other medical facilities a 3% tax based on their revenues. 

Proponents of the tax which is called the Quality Assurance Assessment Program (QAAP) point out that the tax allows the state to get federal money to supplement those who treat Medicaid patients and for some physician’s will actually amount to a net increase.

However, those doctors who treat little or no Medicaid patients would only pay the tax.

The House passed the physician’s tax and a bill to freeze an increase in the personal income tax exemption that would otherwise take place next year.

Other bills that have been discussed in the House to raise more revenue include reductions in certain Michigan Business Tax Credits (what they would be has not been determined), an increase in taxes on certain tobacco products (not cigarettes), and increasing liquor license fees for bars to stay open later.

The Senate has said that they have little interest in passing these bills.

SBAM remains committed to our position that the budget should be balanced without tax increases, and then the legislature to look at structural reforms that will be needed to balance next year’s budget.

SBAM and Michigan business groups to hold Tues. 11 a.m. press conference at state Capitol

SBAM and other Michigan business groups, encouraged by the state Senate’s proposal to reduce the cut in the K-12 education budget and phase out the job killing Michigan Business Tax surcharge, are gathering at the state Capitol on Tuesday at 11 a.m. to ask the Michigan House to finish the work started in the upper chamber. Their message: with all budgets now passed it is important that our elected leaders focus on meaningful reforms that will facilitate economic growth and lead to a revitalization of Michigan. Both the Governor and House Democrats have said they favor repeal of the MBT surcharge and now the Senate has put forth a balanced plan to accomplish this goal.


SBAM featured on Detroit Public Radio show: “Climate Change – Is Detroit open For Business?”

“Climate Change – Is Detroit open For Business?” is a four-part series on WDET Detroit Public Radio that explores the small business climate in Detroit during the election season. Last week’s installment featured SBAM’s Vice President Communications Michael Rogers and other guests. Click here to listen to the recorded program.


The program was moderated by Bankole Thompson of the Michigan Chronicle. Other guests were Austin Black, the president and a founding member of City Living Detroit, a non-profit that promotes living in the city; Claire Nelson, small business owner and co-founder of Open City, a forum for small business owners in Detroit; and Frank Taylor, the CEO of the Frank Taylor Restaurant Group. His restaurants include Seldom Blues, Detroit’s Breakfast House & Grill and the Detroit Fish Market.


The other three parts of the series will air Wednesdays at noon on WDET-FM 101.9.


SBAM tops 6,400 members in September

The Small Business Association of Michigan’s (SBAM) statewide membership now exceeds 6,400 members, up from slightly more than 5,000 in 2007.
“Our rapid growth shows that small business owners all across Michigan value being a part of America’s best state-based small business organization,” says Barry Robinson, SBAM’s vice president for sales and marketing. “They are joining our cause in record numbers because they believe in the power of numbers and they believe in our mission of championing small business at the state capitol.”
SBAM is the only statewide and state-based association that focuses solely on serving the needs of Michigan’s small business community. It has been successfully serving small businesses in all 83 counties of Michigan since 1969.
Small business owners can join the fight by clicking here.