It's About The Single Business Tax

June 27, 2005
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Two stories this week specifically underscore the budding development of both the life sciences and technology industries in the metro area. Add to that the considered success of businesses in the Michigan pavilion during the BIO 2005 International Convention last week in Philadelphia, and one is again given pause as Gov. Jennifer Granholm continues to hype a Jobs for Michigan Fund financed by $2 billion in bonds, or even the $1 billion suggested by State Sen. Ken Sikkema, R-Wyoming.

“Budding” industry seems an inappropriate word for the report of Smiths Aerospace’s expansion, especially since Smiths has been a corporate citizen since Lear Siegler was first conceptualized. The company is investing another $2.4 million to expand its operations (and create another 65 jobs). In determining that it would make that expansion here, instead of any of the other states that came calling, Smiths cited the Michigan Economic Development Corp.’s approval of the Single Business Tax credit.

It’s SBT; it’s SBT; it’s SBT that must be targeted for elimination. It’s the SBT that continues to give all businesses in the state of Michigan a unique penalty for keeping the doors open here. It’s an “incentive” individuals of every political stripe have said they are committed to eliminating. (Use of the word “inventive” makes business owners bristle. The tax shouldn’t exist in the first place, and Michigan remains the only state crushing businesses with such a tax). The governor is willing to lower the tax, but then shifts taxes to specific types of businesses.

Gubernatorial candidate Sen. Nancy Cassis, R-Novi, introduced three bills last week targeting the SBT. Those bills would lower the SBT rate and re-start the phase-down initiated by former Gov. John Engler; eliminate the SBT penalty for increased employment and property, changing the formula to 100 percent based on sales; and provide a constitutional amendment to curb state spending. The Senate Finance Committee passed the bills.

The MEDC and Michigan businesses “under the tent” for Philadelphia’s premier international conference were especially pleased with the attention the Michigan group drew from many of the more than 18,000 biotech entrepreneurs, investors, scientists and economic development officials from 60 countries.

InformMD co-founder Ian Fellows is now going to market with the invention he’s hatched in the GrandValleyStateUniversityCook-DeVosCenter for Health Sciences Smart Zone (aka the West Michigan Science and Technology Initiative incubator facility).

The businesses represented in Philadelphia and in the Smart Zones across the state would likely not turn down additional funding for development, but they create the jobs; government does not. Government funding is never a gift.

Lack of such funding has not stymied the continuing growth in life sciences and technology. But the SBT does.    

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