LANSING – While many business, labor and manufacturing leaders were critical of Gov. Jennifer Granholm’s take on the state of Michigan’s economic climate in Wednesday’s State of the State address, others were encouraged by bipartisan tax cuts already in play and the recognition by the governor that the state’s manufacturing economy is due for change.
Reactions to Granholm’s speech ranged from applauding the leader for her efforts to keep and attract jobs in the state, to accusations that the governor is “removed from reality” and has intentionally relied on bad information.
While initial reaction was mixed, one commonality existed among leaders in that most seemed to be scratching their heads after the address, wondering how the governor would carry out her plans to reshape the economy.
Charlie Owen, president of the National Federation of Independent Businesses, wondered whether Granholm, as she said in her speech, would really “go anywhere and do anything for business.”
He said two bills awaiting her signature would help small businesses by cutting taxes in half for about 30,000 companies and preventing more regulations from burdening businesses that are already overloaded by red tape.
“(If she’ll do anything) then she should go right over to her office and sign those bills sitting on her desk right now,” Owen said.
The first piece of legislation, HB 5447, would ban the promulgation of ergonomics standards.
“Additional penalties, red tape and regulations (are) particularly harmful to small businesses and manufacturers,” he said, adding that California is the only other state that has a law regulating ergonomics standards.
SB 957 would provide tax cuts of about $30 million to small businesses, a meager figure compared to the total tax burden, Owens said, but one that would have a major positive impact on small businesses.
Owen said Granholm’s mention of Michigan as a small business-friendly state by the Small Business Survival Committee based out of Washington, D.C., was misleading.
“I’m disappointed that she drudged up the discredited and skewed study that says we are one of the friendliest states for small businesses,” Owens said, pointing out that the governor has chosen to ignore his organization’s attempts at informing her that the study is inaccurate because it falsely interprets Michigan’s small business tax.
Rob Fowler, president of the Small Business Association, echoed that sentiment, questioning the priorities of the administration and where small businesses fit into the governor’s plans.
“You can’t talk about raising the minimum wage and growing business in the same breath. Any businesses owner will tell you that a raise in the minimum wage means they would go out of business; do the same work, with fewer employees or raise prices,” Fowler said.
While he’s somewhat cynical about how many of the leader’s plans will be possible, he commended the governor for her zeal, saying “you can’t not be impressed by her passion.”
He complimented Granholm on her investment in medical technology as a way to reduce the cost of healthcare, but, Fowler said, the governor’s plan could go further by addressing issues of liability, while offering incentives to employers to make wellness and prevention part of their company environment.
Tricia Kinley, director of tax policy and economic development for the Michigan Chamber of Commerce, said that Ms. Granholm outlined an ambitious, if not broad, healthcare plan but she wondered: When do Michigan residents take responsibility for their own economic futures?
“The governor articulates her vision well, unfortunately her administration’s vision is one that permeates more and more of everyday life and business operations,” said Kinley, adding that Granholm failed to mention anything about personal responsibility in her address.
“Her administration’s vision is to make Michigan become more of a welfare state. Really the solution to having more people have adequate health care is for them to have a job,” she said.
Instead of admitting responsibility for allowing thousands of jobs to go to other states and out of the country, the governor passed blame to the federal government, said Kinley, adding that the leader seemed to be in denial about the staggering numbers of job losses.
Mark Gaffney, president of the AFL-CIO, refuted that, saying Granholm has always fought and continues to fight to keep people in Michigan working.
“(She) recognized that Michigan’s working families are still hurting, but she offered hope for the future with (a) bold agenda that is already showing success at creating new jobs. No one in Michigan has worked harder than Governor Granholm to bring new jobs to our state,” he said.
He added that he’s excited at the governor’s plan to diversify the economy through initiatives such as building alternative fuel plants.
“This is the exciting thing: Michigan State University has the technology and experts to lead the world in biotechnology, meaning we are really well placed to get jobs and keep them here,” Gaffney said.
He hypothesized that people who build new plants or work to produce alternative fuels would be paid just as highly as those in auto manufacturing, although he conceded that it would take a lot of ethanol plants to replace employment for the thousands of autoworkers who will lose their jobs.
That’s the consensus of Michigan Manufacturers Association members, said Mike Johnston, the group’s director of regulatory affairs.
“If we really think things like solar and wind will be the saviors of Michigan’s economy, we’re a long way from that,” he said, adding that he thinks coal is still the most efficient and cheapest way to generate power.
But Johnston said there are plenty of other manufacturing jobs in the state that will continue to make Michigan a leader in the industry.
“Michigan still makes over 30 percent of automobiles in the country, and we are still the 13th largest manufacturing state in the country. No one I know sees a future without manufacturing,” he said.
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