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Mon March 28, 2011
Why Business Leaders Support the Budget
The changes Governor Rick Snyder wants to make with his proposed budget are hugely controversial. But everyone agrees on this: They are designed to bring new business to Michigan.
The governor believes there is no other way to revitalize our state’s economy. But what does business really think of the governor’s budget? People in business aren’t monolithic. General Motors doesn’t have a lot in common with the mom-and-pop restaurant in my neighborhood with five employees.
So last week, I talked to two business leaders who each represent a broad cross-section of somewhat dissimilar interests. Doug Rothwell is president and CEO of Business Leaders for Michigan, a group of seventy-six of the state’s largest employers. Rob Fowler has the same title with the Small Business Association of Michigan, sometimes known as SBAM.
SBAM has more than ten thousand members, many of whom have fewer than a hundred employees. Fowler and Rothwell don’t always see eye to eye -- but they do on the governor’s budget.
They support it, right down the line. “I think the governor’s tax plan is the right thing to do, even though some of our members are going to pay more,” said Rothwell, who ran Detroit Renaissance before it evolved into Business Leaders two years ago.
Rob Fowler, who has also had small business leadership positions in Indiana and Ohio, put it this way: “You have to understand the moment in time we are in.”
“Sure, there are things in the governor’s plan I am sure, standing by themselves, our members would not support.”
But both men said it was vitally important to pass the plan as a whole, that if lawmakers started picking off pieces, it would fall apart.
I talked to each man separately, and discovered that what both liked most about the plan was that it offers a coherent, comprehensive strategy for Michigan’s long-term economic recovery. Rothwell noted that this was not a budget of quick fixes and one-time solutions, but one with vision.
Critics have said that the governor is just betting an hunch, gambling that slashing taxes will bring new business into the state.
But both business leaders say there’s some hard data indicating that Snyder may be right. Fowler said a survey of his small business members found seventy-two percent said they expect they’d add workers with the governor’s plan and sixty-three percent said they’d expect to pay their current workers more.
Two thirds of the small businessmen said they would be likely to invest in new equipment. Both Fowler and Rothwell oppose the Republican legislators’ proposal to set the corporate income tax higher and exempt those currently getting pensions from tax.
Rothwell said that change would take Michigan from the fifteenth most business-friendly state to the thirtieth. “They are trying to snatch defeat from the jaws of victory.” Fowler added.
That doesn’t mean both men love the entire plan. Fowler’s defense of eliminating the Earned Income Tax Credit for the poor was unconvincing. Rothwell doesn’t like seeing cuts to education.
But they are both standing behind the plan, in part, perhaps, for one other reason. Despite all the critics, nobody’s proposed a comprehensive alternative. Michigan’s economy is seriously sick. And as of now, the Snyder plan is the only doctor in the house.