economy

Politics
3:07 pm
Fri January 28, 2011

Governor Snyder's plan to make up the budget shortfall

Governor Snyder makes no bones about wanting to get rid of the Michigan Business Tax. Some details of his plan were revealed today.

But by getting rid of the business tax, the state will be left with $1.5 billion tacked onto its existing projected deficit for the next fiscal year.

Today, the Governor spoke to the Michigan Press Association at the Detroit Marriott. In his speech, he addressed how he plans to make up the shortfall.

From the Associated Press:

Gov. Rick Snyder says he wants to include most tax breaks in the budget rather than burying them in the tax code...Snyder says it's imperative to get rid of the Michigan Business Tax, which he considers "a dumb tax." To make up the revenue lost by having a lower corporate income tax, he wants to look at existing tax breaks and get rid of those that aren't moving the state forward. The governor says tax breaks should be included in the budget so they can be debated and weighed on their merits.

The Detroit Free Press reported on Snyder's speech as well. The Governor said that one of the "biggest tasks as the chief executive of the state is to find the elusive “they” in state government." From the Freep:

Snyder said his first days in office were a revelation. “The IT guys were in hooking up my computer and I had a square screen,” he said, explaining that it didn’t make sense because the larger, landscape computer screens are better and less expensive. “They told me ‘It’s been 10 years and they said that’s what we had to do,’” Snyder said the IT guys told him. “Almost on a daily basis, I hear about ‘they’ and they tend to have a different opinion that I have. I need to find out who they are and where they reside.

Politics
1:57 pm
Fri January 28, 2011

Snyder's business tax plan revealed

Michigan Speaker of the House Jase Bolger (foreground) and Lieutenant Governor Brian Calley during Governor Snyder's State of the State address.
gophouse.com

Governor Snyder has said he wants to do away with the complex, "job-killing" Michigan Business Tax, and replace it with a more simplified flat tax for businesses in the state.

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Politics
12:01 pm
Fri January 28, 2011

Governor Snyder's first big test?

Some republicans in the Michigan legislature are beginning their push for a repeal of the state's Earned Income Tax Credit (EITC).

It's a credit that bell-weather conservatives, like Gerald Ford and Ronald Reagan, have supported on the federal level.

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Investigative
7:30 am
Fri January 28, 2011

Michigan legislature considers tax increase on working poor

The first federal tax credit for the working poor was signed into law by President Gerald Ford in 1975.
Library of Congress

The idea of an Earned Income Tax Credit, giving people who have low-income jobs a bit of a tax break, has been around for a while.  In 1975, a Michigan Republican, Gerald Ford, signed the first federal credit into law while he was president.

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Auto Earnings
7:23 am
Fri January 28, 2011

Ford announces highest profit in more than a decade

Ford announced this morning that it had made its highest profit in more than a decade
Tooshed4 Flickr

Ford Motor Company announced this morning that it had its best annual performance in more than a decade. Ford earned $6.6 billion last year as sales jumped by 20 percent. Revenues rose 3 percent to almost $121 billion.


UPDATED:  11:40 a.m.  Ford CEO Alan Mulally says salaried and hourly workers will share in the good news in the form of profit-sharing checks.  Hourly workers will get average payments of $5,000.



"To be able to share the wonderful work, the wonderful success of this, with everybody's that's worked on quality, on fuel efficiency, on safety -- it's a tremendous day for all of us," says Mulally.


Ford made $7.2 billion dollars in 1999, but it sold nearly twice the number of vehicles to get that result compared to 2010.  Mulally says the company is benefiting from what he calls a "home improvement loan" of $23-billion, taken out in 2006, that financed the company's effort to slash operating costs and improve quality.



"You think about back then (1999) and now, this is a complete transformation of Ford," he says.


Mulally says the biggest challenge this year is not specifically a Ford problem.  He says the U.S. needs to exercise sound fiscal policy so the economy continues to recover.


Ford Motor Company is forecasting higher profits in 2011 than 2010. 


The company's stock dropped Friday morning, however, as investors reacted to Ford's fourth quarter results.  The company's profits were lower than expected because of costs associated with restructuring some debt.


Mulally says the company has made swift progress in paying off that "home improvement loan."  Debt was reduced 43% in 2010.


Arts/Culture
6:28 am
Fri January 28, 2011

The Cost of Creativity - A Radio Documentary

The Cost of Creativity

Part 1

Part 2

Part 3

Thanks to the following Michigan musicians, whose songs are featured in the documentary:

Ben Benjamin, Luke Winslow-King, Midwest Product, and The Red Sea Pedestrians.

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Politics
4:43 pm
Thu January 27, 2011

Proposal calls for revenue sharing based on population

Proposals for different ways the state delivers payments to local governments for services are bubbling up at the state Capitol.

A bill in the state Senate would distribute revenue sharing payments to cities, townships and villages based on population.

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Auto/Economy
4:28 pm
Thu January 27, 2011

Levin calls for more hybrid car tax credits

Congressman Sander Levin
http://www.house.gov/levin/

A Michigan Congressman says U.S. automakers need more help to sell large numbers of electric and hybrid vehicles.

The Obama administration has set a goal of one million plug-in hybrid vehicles on the road by 2015.

There’s already a federal tax credit of $7,500 to help defray the cost of buying a hybrid or electric car.   But there’s a cap on how many of the credits are available to each automaker. 

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Politics
4:04 pm
Thu January 27, 2011

Repeal of item pricing law introduced in the legislature

Legislation to repeal the Michigan law that requires every item on store shelves to carry a price tag has been introduced in the state House.

Governor Rick Snyder called for an end to the 35-year-old item-pricing law last week in his State of the State address.

He says the law is outdated, and repealing it would send a message that Michigan is a business-friendly state.

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Auto/Economy
1:07 pm
Thu January 27, 2011

GM plans to "go green" without government help

GM says it won't apply for low-interest government loans.
user santoshkrishnan wikimedia commons

The new GM has been turning a corner of late. It posted three profitable quarters last year:

  • $865 million in the first quarter
  • $1.6 billion in the second quarter
  • $2.1 billion in the third quarter

(still waiting on fourth quarter numbers)

Now, in another sign of financial health, the auto company says it will no longer seek government loans to help it modernize factories:

From the Associated Press:

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Economy
5:37 pm
Tue January 25, 2011

Could pizza pans help diversify the Michigan economy?

Jet's Pizza owner took it upon himself to find a way to make the pizza pans
Allan Chatto Flickr

Sylvia Rector, a Detroit Free Press Restaurant Critic, has a nice little piece in the Freep about a shortage of pizza pans around the state.

The pizza pan of choice for local restaurants is a blue steel pan that was once made in West Virginia.

The pans were never intended for baking. They were designed to hold small parts in factories.

Overtime the pans "became the pan of choice for nearly every big name in Detroit-style pizza" (Rector describes Detroit -style pizza like this "dough for the thick but airy crust, absurd amounts of cheese and ladles of rich, long-simmered sauce").

But the company moved its operation to Mexico, and they haven't been able to get production up and running.

Pizza makers were distraught. They needed the pans. From the article:

Restaurant supply companies here -- and apparently everywhere else -- have been out of them for many months.

Pizza makers' orders for pans are stacking up by the thousands and causing problems for big chains and small independents alike.

"You wouldn't even believe how many pans we have on back order" -- at least 4,000 small and medium sizes and 700 extra larges -- says Patti Domasicwicz at People's Restaurant Equipment in Detroit. She hasn't received a shipment since April.

One pizza maker couldn't wait. So he took it upon himself to start making the pans in Michigan.

Eugene Jett, co-founder of Jet's Pizza, says he found a manufacturer that would do it:

"They're cutting them as we speak...The first thing is for me to get my pans...It took me a long time to figure out how to get them done...But I decided then, I will build my own pans."

Rector writes that if the manufacturer thinks the pans will be profitable, they might put the pans into full production.

Perhaps another sign that Michigan is diversifying it's economy.

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State Legislature
4:59 pm
Tue January 25, 2011

Lawmakers moving to eliminate tax credit for the poor

Legislators in the Michigan State Capitol want to do away with the Earned Income Tax Credit.
Lester Graham Michigan Radio

Republicans at the state Capitol are working to get rid of a tax credit for working poor people.

But people who support the Earned Income Tax Credit say the money helps poor people keep their jobs.

Without the credit they might have to go back on welfare, an they say that would cost the state more money.

Gilda Jacobs, director of the Michigan League for Human Services, says all lawmakers have constituents who claim the credit:

"We have some districts where 18% to 20% of the people are filers of this, and they’re putting multi-millions of dollars back into small businesses. So we kind of need to ask people to see this up-close and personal and to really be open to understanding what this is all about."

Republican House Speaker Jase Bolger says the state cannot afford the Earned Income Tax Credit right now:

“The Earned Income Tax Credit is very new in Michigan. It didn’t exist a couple of years ago. It was added at a time where I believe we couldn’t afford it. So as we look at how we are going to revamp Michigan and how we are going to move forward, we have to evaluate things that we can maybe no longer afford, however we do have to look at that with a broader tax structure, and we have to understand that the best social program is a good-paying job.”

Bolger says eliminating the Earned Income Tax Credit will be part of a large package of reforms that are expected to be introduced soon in the House.

Supporters of the tax credit say they have a lot of work to do to convince lawmakers that getting rid of it would hurt people in their districts.

Economy
2:44 pm
Tue January 25, 2011

Grand Rapids Mayor responds to Newsweek's "Dying Cities" post

Grand Rapids Mayor George Heartwell was irked by Newsweek's "Dying Cities" designation.
user stevendepolo Flickr

After Newsweek named Grand Rapids as one of its ten "Dying Cities," Mayor George Heartwell sat down to express his feelings about the magazine's designation.

In a letter to Newsweek editor Tina Brown, Heartwell said "the citizens of Grand Rapids were astounded when you declared our city...to be a 'dying city.'"

From the letter:

Dying city? Surely Newsweek must be joking! Would a major medical School (Michigan State University School of Human Medicine) move its campus to a dying city? Would a dying city have seen $1.4 Billion in downtown construction in the past seven years?...Would a dying city have more LEED certified buildings per capita (2009) than any other American city?

The mayor might have been wise to ask whether rapper 50-cent would consider moving to a dying city as well.

He did invite Newsweek's Tina Brown to visit the city saying, "I'm afraid our timing is off to get you to a Kid Rock concert...that happens tonight. But if you want to see Lady GaGa at our Van Andel Arena there's still time; she's comes this spring."

Economy
2:04 pm
Tue January 25, 2011

Great recession slows Midwest's "brain drain"

The preferred moving truck for young people.
user dvs Flickr

For much of the last decade, cities across our region have watched their recent college graduates flee to cities like Phoenix.

It what might be good news for our region, new census data show the recession has significantly changed where young people are moving.

People, especially people in their early twenties, go where the jobs are.

That’s why Michigan is so concerned about being the only state in the census to lose population

And cities like Cleveland and Detroit have been fretting about "brain drain" to other areas.

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Culture
11:27 pm
Mon January 24, 2011

Grand Rapids officials discuss pros, cons, of week-long biker event

lehcar1477 Creative Commons

Organizers of the proposed “River City Bike Week” expect the five-day event will attract between 50,000 and 60,000 people. But some worry the group is overestimating the economic benefits and underestimating the noise, traffic and potential crime they say is associated with biker clubs.

Kyle Davis is an avid Harley rider from the Grand Rapids suburb of Wyoming. He’s been missing the annual biker week in Sturgis, MI and would be thrilled to have something like that in Grand Rapids.

“It’s going to be noisy I can tell you that but for the most part, a lot of the Harley community around here gives back to the community a lot. I know my brother has muscular dystrophy and they do a big huge fundraiser every year. So they’re really misunderstood in my point of view.”

If the city allows the event, River City Bike Week organizer Tracy Holt says part of the proceeds would benefit the Grand Rapids Student Advancement Foundation that helps give Grand Rapids students the tools they need to succeed. She says they'll have bike builders, vendors, stunts, races, and concerts by ZZ Top, the Steve Miller Band and the Doobie Brothers.

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Auto/Economy
5:13 pm
Mon January 24, 2011

Retailers have item pricing law in their sights

Steve Carmody

Retailers say they are more hopeful than they’ve been in many years that Michigan is close to repealing the law that requires them to put a price sticker on every item they sell. But unions and Democrats say they will put up a fight to preserve what they say is a significant consumer protection.

James Hallan is the president of the Michigan Retailers Association. He says store-owners were pleased to hear in Governor Rick Snyder’s State of the State address that he is on their side. And Hallan says retailers hope the Legislature’s large Republican majorities will go along with scrapping the 35-year-old law.

“We have a new administration that is progressive. We have a legislative body that is progressive, and technology has come a long ways from where it was in 1976. Cell phones were not around in 1976. You look at all the new technology, and it’s time we embrace this and not walk away from it."

But not everyone is on board. Chris Michalakis is with the United Food and Commercial Workers union. He says the item-pricing law remains popular with the public.

“What we’re hoping is our Republican governor and our Republican majorities in the House and the Senate will listen to consumers and members of their community and when they look to change this law, do it in a way that voters are comfortable with and do it in a way that protects consumers and protects jobs.”

Employee unions say the law remains popular with the public for a reason and, if anything, the item pricing law should be more strongly enforced.

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Politics
4:32 pm
Mon January 24, 2011

Lawmakers seek a 2-year budget cycle for Michigan

The Michigan House of Representatives
Lester Graham Michigan Radio

The state could be headed toward a two-year budget cycle.

Governor Rick Snyder and many lawmakers say they need to start thinking farther into the future when putting together a budget.

However, creating a two-year budget cycle would require an amendment to the Michigan Constitution. The Legislature would have to put it on the ballot for voters to approve.

State Senator John Proos says that could and should happen, but it will take time. He says in the meantime lawmakers can create a two-year projection:

"That’s something that every year instead of scrambling to fix a budget hole and not really telling the whole story about what our budget will look like out into the future, this will give us the time instead to say our revenue picture and expenditure picture is going to look like X. Once we’ve made that determination, then we can say are we actually getting value for the tax dollars that we’re spending."

Proos is expected to introduce a measure that would amend the constitution to create a two-year budget cycle as well as a part-time Legislature.

Proos says for now it’s important to complete work on the budget by Governor Snyder’s May 31st deadline.

Population
3:50 pm
Mon January 24, 2011

"America's Dying Cities" - 3 are in Michigan

The old train station in Detroit has become the city's poster child of decay.
Kate Mereand Flickr

In case you missed it, Newsweek Magazine put out a Top Ten list last Friday. This top ten list was called "American's Dying Cities."

There's nothing like a provocative headline to get people to peek in.

For Michigan, it's the usual suspects: Flint and Detroit.

But many will be surprised that Grand Rapids also made the list.

No doubt about it, there are many urban areas around the country that are in decay. The question is, how do you measure the decay?

The writers at Newsweek said they looked at the latest census numbers (it's difficult to tell who at Newsweek looked at the numbers because there's no byline as far as I can tell):

We used the most recent data from the Census Bureau on every metropolitan area with a population exceeding 100,000 to find the 30 cities that suffered the steepest population decline between 2000 and 2009. Then, in an attempt to look ahead toward the future of these regions, we analyzed demographic changes to find which ones experienced the biggest drop in the number of residents under 18. In this way, we can see which cities may have an even greater population decline ahead due to a shrinking population of young people.

It's also difficult to tell which direction this list goes.

The cities are listed in their scrolling widget in one direction, and in their "view all" list in the opposite direction. So, for what's it's worth, here's the list (from their "view all" view):

  1. Grand Rapids, Michigan
  2. Flint, Michigan
  3. South Bend, Indiana
  4. Detroit, Michigan
  5. Pittsburgh, Pennsylvania
  6. Cleveland, Ohio
  7. Rochester, New York
  8. Hialeah, Florida
  9. Vallejo, California
  10. New Orleans, Louisiana
Auto/Economy
11:30 am
Mon January 24, 2011

Report: GM to add more jobs at Flint Assembly Plant

An announcement at Flint Assembly this morning.
Steve Carmody Michigan Radio

Update 11:30 a.m.:

Steve Carmody called in with this update from the news conference:

GM announced that it will add 750 jobs to its Flint Assembly Plant by adding a third shift. No new hires will be made. The pool of workers will come from two places:

  1. people being reactivated from various layoff pools
  2. workers who would like to return to Flint after they were transferred to another plant

10:21 a.m.:

GM is planning a news conference at 10:30am this morning.

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