Sikkema Needed To Resolve SBT Deficit

November 12, 2006
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The good news is that more than 50 percent of eligible Michigan voters cast a ballot last Tuesday, setting historic record turnout. That voters nationwide want to see the two majority parties collaborate has been thoroughly discussed the past several days, but it has emphasis in Michigan, where the House, in 2007, will be controlled by Democrats and the Senate by Republicans.

Last August, when Republicans ruled Michigan, the state’s Single Business Tax was repealed. Bi-partisan work should begin immediately in the “lame duck” session to replace the SBT, especially while the Senate is guided by the experience of State Senate Majority Leader Ken Sikkema, who has been “term limited” out of his state job.

Sikkema was among the lawmakers offering Gov. Jennifer Granholm tax relief for small businesses in the early part of this year to spur development, plans at which the governor balked given state budget cuts.

Sikkema was absolutely correct in asserting that economic recovery is job No.1 and balancing the state budget is second, and in suggesting the state’s “rainy day fund” could be used to accomplish the latter.

State Rep. Jerry Kooiman offered further options for state budget cuts in his “outcomes-based budgeting,” a plan finding favor among state legislatures nationwide. It also was a practical point made by gubernatorial candidate Dick DeVos.

The Grand Rapids Area Chamber of Commerce and several other business organizations in Michigan have given ample time to study and recommendations for legislators to consider. The recommendations of the Grand Rapids Chamber, the Michigan Chamber and the Michigan Manufacturers Association are relatively similar and set out recommendations that provide a foundation of work that is unpoliticized.

The urgency also is apparent because the national agenda to be established by a Democratic-controlled U.S. House and Senate will have direct impact on Michigan businesses. Democrats have indicated they are ready to pass a federal minimum wage increase, new trade “protections,” and price impositions on pharmaceutical companies. 

The SBT unquestionably discouraged business investment and hiring, though two studies this year of jobs creators have indicated that state tax structure is not the compelling recruitment tool: education is.

Still, new taxes can be structured more fairly.

Granholm earlier this year insisted that the entire $2 billion in lost SBT revenue must be replaced. This is likely to be the issue that is given compromise.

Michigan legislators must determine revenue replacement lost by repeal of the SBT. Granholm and members of both parties have real opportunity to work together and set a model of cooperative government to get this state on firm footing in economic recovery.

Campaign rhetoric almost completely focused on Michigan’s economy. The election distractions are over; it’s time to put a plan into action. Now, before the end of the year.

Business owners have constructed business plans for 2007. They deserve to know how the legislature intends to impact the bottom line — sooner rather than later.    

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