Wake up and smell the economic reality
The nightmare is unceasing but Michigan legislators must wake up. The debacle of “loaning” federal money to a failing Big Three industry heaped upon the Wall Street bailout isn’t enough in Michigan where politicians are acting like politicians, poised to push this state over the edge.
The extent of selfishness and greed can be measured one legislator at a time. The lame-brained lame ducks are attempting to provide handouts to what surely seems to be “favored” businesses or industries under the guise of “saving” them. One such piece of … legislation … would grant refundable tax credits against the reviled Michigan Business Tax to one specific business in Michigan. The MBT, son of the SBT, was in fact created in the midnight hours of a lame duck session, and will take years to fully correct. This while legislation already is pending to correct the gross tax receipts issue within the MBT and eliminate the MBT surcharge. Those are bills that provide all Michigan businesses with relief, and in a timeframe that does not further bankrupt the state treasury.
In the same week, Gov. Jennifer Granholm warned that the budget year that began Oct. 1 already needs further trimming — before the end of the year — to avoid a deficit that could amount to $600 million. The governor must corral the escapists who further threaten every business left in Michigan. Senate Majority Leader Mike Bishop has to close the Senate door to House legislation that further bleeds the state.
Granholm in fact had her busiest week in two terms as she met with President-elect Barack Obama regarding the federal bailout of the auto industry before flying to Israel where she thought she might recruit business to the state. Before leaving, however, Granholm suggested she would release $150 million from the state treasury for banks and credit unions to loan. Eighty percent of those funds, she said, would be loaned to businesses squeezed in the credit crunch; the rest would be directed by those institutions to consumers. The governor proposes to take that money from a cash fund used to invest in financial markets.
Grand Rapids Business Journal readers have been filling the comment page with interesting observations and creative ideas the past few weeks. This week the Business Journal reports on the progress of the Michigan Aerospace Manufacturers Association, which is slowly — but surely — transforming former automotive manufacturers with new lines of business.
If the Lansing lame ducks are hurried to act, they should act on legislation that holds long-term benefit for all Michigan businesses. The immediate halt of forcing businesses to collect state taxes and other fees from the MBT is a long-discussed option. There are a myriad of government-induced costs to businesses that, if eliminated, would provide room to grow.
This nightmare will end only if legislators wake up.