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State chamber president: Lansing budget woes will impact business

November 12, 2009
By Dionna Harris Escanaba Daily Press

ESCANABA - Concern about the current state budget affairs and the implications for businesses in Michigan was only one of the topics discussed Wednesday during a visit by Richard Studley.

Studley, president and chief executive officer of the Michigan Chamber of Commerce, was in Escanaba to meet with local business owners, along with officials and members of the Downtown Development Authority and Delta Commerce Center.

Studley arrived in the Upper Peninsula Sunday, and met earlier in the week with management officials from the Kennecott Mine and visited local Chambers of Commerce.

"We are a member-driven, policy focused organization, and I want to understand more about the concerns of employers and employees in the area," said Studley in his opening comments.

He said legislators have gone from chasing smokestacks (attracting new or supporting existing businesses) to tilting at windmills, by offering exorbitant tax credits to filmmakers, which may paint a distorted image of the state.

One of the major issues facing businesses in Michigan today is the Michigan Business Tax, which is more complicated for business owners to comprehend then the Single Business Tax it replaced.

"Lansing managed to repeal the single business tax and replace it with one which is more complicated. The concept of the tax was to make it (MBT) more favorable to manufacturing," said Studley.

Under the MBT, most businesses in Michigan were in favor of paying a 10 to 15 percent in tax liability to help support manufacturing operations such as automobile manufacturers.

However, under the MBT being set into motion, businesses are looking at paying upward of 75 to 100 percent in tax liability, which is going too far, said Studley.

He added the Michigan Chamber of Commerce had reviewed the MBT legislation and found over 300 errors or omissions, which means the new tax legislation is "a mess."

Studley said currently there is talk of tax reform in Lansing. He urged caution, likening the discussion of tax relief as rearranging the deck chairs on the Titanic.

"While Lansing is discussing tax relief, it could lead to an increase in taxes through the shifting of neutral taxes," said Studley.

He said the Michigan Chamber of Commerce had spend over $2 million getting the message to Lansing that reform is needed to get the state back on its fiscal feet.



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