The Candidates & the Economy

Oct. 19, 2008

There’s a single question that rises above all others in the minds of most Michigan voters this year: “What would you do to improve Michigan’s economy and the job outlook in Northern Michigan?”
We posed that question to 13 candidates seeking the post of State Representative from five districts ranging from Manistee to the Mackinac Straits. Following are some of their responses.


Note: Responses from candidates which did not reach the Express by press time will be included in next week’s issue.

Connie Saltonstall (D), Charlevoix
State Rep candidate -- 105th District

My plan for improving Michigan’s economy and creating more jobs in Northern Michigan is based on reinventing the auto industry and creating new industries to manufacture renewable energy products and technology.
The American auto industry is transitioning to more economical, cleaner, fuel-efficient cars utilizing renewable energy. The new Chevrolet Volt plant in Flint is a great example of this. Many small plants in Northern Michigan supplied auto parts and related products. These plants can be adapted to create products for this new technology.
We must recruit and create companies that manufacture renewable energy systems and products like the Mariah Power Windspires in Manistee. Business, community and state worked together to make this happen.
Ensuring broadband access is vital, enabling people working from virtual offices in Northern Michigan to connect anywhere in the world.
Protecting water, the most important resource on our planet, ensures our future. Michigan is in the center of 20% of the world’s fresh water, making our state a prime location for new business.
Protecting the environment is crucial to protecting tourism, Michigan’s second largest industry. This requires adequate funding for the MDEQ and the DNR. We must maintain recreation facilities, parks, and trails. I support an advertising budget to promote Michigan tourism throughout the country.
Our tax system needs comprehensive overhaul. Proposal A, designed to provide equal funding for education, has been changed over 70 times and now exempts more revenue than it collects. The Michigan Business Tax was rushed and imperfect. We need to develop a tax structure that will make Michigan fair and competitive.
Investing in infrastructure will create jobs and support business, tourism and safety.
We must ensure quality education and affordable college tuition to provide the educated workforce necessary for the new technology job market.
Universal healthcare will help both business and individuals. Why do we as a country believe everyone is entitled to an education, but not healthcare? We must negotiate drug prices. Why should we pay more for prescriptions than Canadians? All of the countries we compete against have national healthcare. Our health insurance system is upside down. The premise of insurance is to spread the risk. Instead, we have created exclusive groups. If you can’t afford insurance, you will pay more than an insured person for the very same service. People who can’t afford health insurance end up getting health care at the most expensive place, the emergency room or the hospital. These costs get passed on to business and people with health insurance.
I believe universal healthcare is best provided at the national level, but if that does not happen, then the state should create a program similar to MiChild. The Dura plant that closed in Mancelona might still be open if healthcare had not been an issue.
In summary, we need to develop new auto and renewable energy jobs, create a fair and competitive tax system, protect our environment and invest in our infrastructure while providing quality educational opportunities and healthcare for everyone.

Roman Grucz (D), Traverse City
State Rep candidate -- 104th District

There is no question that jobs and the economy are the major issues facing Michigan and our nation. The challenge for Michigan is to attract new business and create new jobs without sacrificing our environment, our workers or our unique and special way of life. I believe that we must do three things:
First, we need to work with our current employers to make sure we keep the jobs we have. That means engaging in an ongoing dialogue to determine the needs and problems facing businesses like Tower Automotive, Dura and others who have recently closed their doors in Northern Michigan and are headed elsewhere. Had we been more directly engaged with these companies we may have been able to work with them to keep them here. We must do all we can to keep good jobs and keep our citizens working. Working with current employers also means working with and promoting local tourism and agricultural endeavors.
Second, we need to look to new emerging industries and new opportunities. Energy and transportation are two key areas that offer tremendous growth potential. Green construction and ecologically-friendly building products are others. We must be actively working to attract existing companies, as well as promoting start up companies in these crucial fields. Michigan has an opportunity to transition from being the automotive capital of the world to the clean energy and green living capital. We can take this critical economic problem and turn it into an opportunity to reinvent Michigan
Third, we must provide appropriate incentives for business to locate and stay in Michigan. In the early 1980s, this country invested itself out of a serious recession, in part, through the implementation of a ten percent tax credit for industrial investment. I believe that similar tax incentives would be effective for Michigan. I would require, however, that any company receiving the benefit of such incentives be required to pay a living wage and to keep its facilities in Michigan. Failure to do so would require the recapture of the taxes that were forgiven through the incentive process.
In our efforts to revitalize our state economy and create new jobs, it is critically important that we do so without sacrificing our environment, our workers or our unique quality of life. There are some who see the current economic problems not as issues to be addressed for the benefit of our citizens, but rather as an opportunity to promote their own greedy agenda. They claim that we need to “create a more friendly business climate” in our state. What that means to them is lower environmental standards, less protection for workers who are injured or killed on the job, elimination of worker’s rights, including the right to organize and to challenge greedy or corrupt management, less protection for citizens and consumers, greater tax burdens on individuals and the kind of deregulation that has led to the financial disaster in the deregulated banking industry.
We must never give in to these special interests who offer a short term solution in exchange for the future of our great state.


Wayne Schmidt (R), Traverse City
State Rep candidate -- 104th District

We can revitalize Michigan’s economy by encouraging innovation and removing onerous government-imposed barriers without sacrificing our environment. We can build on our successes and Northern Michigan can be an even brighter spot in our state. Accomplishing this requires change in the way Michigan government operates.
In Northern Michigan, Grand Traverse County is one of just three counties in Michigan that had real economic growth in the last year. We need to continue this trend. We need to develop a mixture of high tech/clean jobs and tourism. The Old Town parking deck is an excellent example of what we need more of in this state because it not only preserves 300 existing jobs, it will result in the addition of hundreds of new, high-paying jobs. I am proud to be a part of the group that moved this project forward.
Tourism is important to Northern Michigan. Yet, in 2005, Michigan ranked 31st among the states for tourism-supporting spending with an annual budget of $7.9 million. Using Detroit Free Press data, if we simply adjusted our 1990 tourism spending for inflation we should be allocating $20 million per year. Every dollar spent promoting tourism returns several fold in terms of real dollars for our economy. With an award-winning advertising campaign “Pure Michigan,” proper funding will result in economic growth for our region.
On energy policy, the recently passed legislation is a step in the right direction. Exciting new technology in biomass and wind electricity generation are well suited to our region. A critical component of wind generation is the mechanical component, and with a strong engineering and tool & die industry we have the opportunity to make Michigan a leader in alternative energy technology. To do so requires a business climate that attracts this growing next-generation industry.
While not an exciting topic, revising the Michigan Business Tax (MBT) is critical. It is not a fair tax. It discourages companies from establishing in or moving to our state. The MBT taxes are based two-thirds on margins, taxed at 0.8% (margins are gross receipts minus the cost of goods and equipment), and one-third on profit, which is taxed at 4.95%. The negative result: a new startup company investing in Michigan and creating jobs, but losing money its first year, could still have a tax obligation. Additionally, the MBT is a massive tax increase—ranging from 200 percent to 1,000 percent—on many Michigan businesses. Further, the state levied a 22 percent surcharge on a firm’s MBT liability to balance the budget. We need to revise the MBT and eliminate the “tax-on-tax” aspect and quickly repeal the existing surcharge. It is clear why Michigan’s unemployment is the highest in our country.
Working together, we can put our state on the right track again. State government can encourage innovation, fairly tax, eliminate wasteful policies, and prioritize job creation. It is going to take a bi-partisan effort to do so, and I respectfully ask for your vote so that I may put my economic leadership experience to work for Northern Michigan.

Dan Scripps (D) Northport
State Rep candidate -- 101st District

As our next State Representative, I will focus on creating jobs and improving Michigan’s economy.
As a first step, I will end tax breaks and state contracts for companies that outsource Michigan jobs, and redirect those tax incentives to companies that invest in Michigan and create jobs right here at home. With the nation’s highest unemployment rate, it makes no sense whatsoever that Michigan taxpayers continue to subsidize companies that outsource Michigan jobs.
In addition to holding on to our existing jobs, I will work to create new jobs in areas that build on Michigan’s strengths. Any strategy to improve Michigan’s economy and spur job creation needs to leverage these competitive advantages to highlight areas where we stand out from the crowd, giving global companies a compelling reason to invest and grow in Michigan.
Importantly, many of these areas of strength - such as renewable energy, agriculture, health and biosciences and advanced manufacturing - are areas where we here in Northwest Michigan have an added advantage. In areas like renewable energy, we’re already seeing results. The recent deal between MasTech in Manistee and wind turbine manufacturer Mariah Power will create over 125 jobs right here in Northwest Michigan over the next couple years. In addition, two separate companies have recently expressed interest in opening solar panel manufacturing plants in this region, representing a total of nearly 2000 new jobs.
We need leadership in Lansing who will work to make these deals happen. As co-chair of the economic development committee for my local chamber of commerce and an advisor to a new community investment fund working to create jobs in our area, I’m already hard at work on these issues. As State Representative, I’ll make sure local efforts like these have an active partner in Lansing.
In addition to building on Michigan’s strengths to diversify our economy and create jobs now, I will also push for long-term investments in education and skills training necessary to develop a globally competitive workforce. From investing in quality early childhood education through an affordable college degree to the skills training our workers need to get back on their feet, I will lead efforts to provide a World Class education to every Michigan citizen.
Finally, we need to fix our broken state government and put an end to the political delays that hurt our economic outlook. As the only candidate running for State Representative in the state who also serves as a Founding Champion of the bi-partisan Michigan Defining Moment campaign, I will lead efforts to make state government more effective, efficient and accountable to Michigan taxpayers. In addition, I will cut legislator pay and end lifetime health benefits for lawmakers. There is no other job where you get lifetime benefits after six short years of work, and at a time when all of us have to tighten our belts, I will work to make sure Lansing leads by example.

Nate Heffron (D), Cadillac
State Rep candidate -- 102nd District

Nate Heffron reiterates the importance of buying products that are made in Michigan. Heffron is doing this by highlighting his “Michigan First” program.
Heffron unveiled his program back in 2004, when he last ran for the state legislature. Heffron’s program would allow any farmer or industry in the state of Michigan, who makes their product in Michigan, to place a “Michigan First” symbol on the front of their product. “By placing this logo on the front, consumers know right away that the product was made in Michigan.”
Heffron’s program also includes funding for TV, radio and print adver-tising. These ads would run state-wide, and would encourage residents to purchase products with the logo. “The first step to economic success is supporting your locally made products first,” Heffron says.
Heffron points out a figure from the Michigan Environmental Council’s website that says: “If we all spent $10 a week on Michigan products, we could put $36 million every week back into the state’s economy.”
Heffron says, “Just think how great that would be if $36 million could be put back into our state’s economy each week! Over one year, that could equal $1.872 billion! This program means jobs and growth for Michigan; this is the cutting edge we need to succeed!”
Heffron admits that this program will benefit companies that primarily make food products, but says that if the people of Michigan support the “Michigan First” program, other industries will soon follow. “I hope that when other companies see the success of this program, they will decide to start making their products here in Michigan.
Heffron also wants to move towards a green economy; this includes wind and solar energy technology, as well as creating the next generation of environmentally-friendly cars and trucks. “Northen Michigan has many ties to the auto industry. If we begin to develop new vehicles that offer more miles per gallon and that are friendly to our environment, then this could be one of many opportunities for Michigan to regain jobs, protect our environment, and lessen our dependency of foreign oil,” Heffron says.

Kevin Elsenheimer (R), Kewadin
State Rep candidate -- 105th District

To improve the economy and number of jobs in Northern Michigan, we must first make Michigan a place where employers want to locate and grow businesses. We can do this by stabilizing Michigan’s taxation system, by making its tax structure more competitive versus our surrounding states, and by improving the regulatory environment in the state.
Consider this: Almost all of the jobs announced by the Governor over the last several years - whether from other countries or other states - resulted from tax incentives (read: reductions) given to the companies to locate in Michigan. Even Google received tax incentives to locate in Ann Arbor. You would think that the fact that one of Google’s founders attended U-M would have been enough. If we need tax incentives to bring companies to Michigan rather than other states, isn’t it also likely that those businesses that are currently here are also in need of tax relief to compete?
Increasing taxes reduces job growth. I recently spoke with a resident of our area whose family owns a company in Livonia. They have been saving and cutting corners for three years to prepare to launch a new product line. They were planning on several hires to launch the product line this year. Their entire savings was wiped out by the increase in their Michigan Business Tax obligation, and they had to reconstruct their product launch from scratch. Instead of hiring new employees, they used their savings to pay the increased business taxes. The resident told me that this 40-year Michigan business wants to grow, and is considering a move to Ohio or Indiana to do so. This is unnacceptable.
By increasing business taxes, rather than finding appropriate cuts and reforms in state government, state government has cost Michigan jobs. Capital for investment is like water, and it tends to follow the path of least resistance. Today, without the governor’s company-by-company intervention, Michigan is on high ground, and investment capital is moving away from us.
Our regulatory environment also harms job creation. We all demand that companies comply with state and federal environmental regulations, but those regulations have to be rational, and permits must be handled in a timely manner. Michigan’s slow permitting process is a hidden tax on our job creators. In a competitive environment, time really is money, and a slow permit process keeps investment out of Michigan.
What will save Michigan, and what keeps us afloat in these tough times, is the quality of our workforce. We must continue to fund education, with an eye toward providing equitable K-12 funding throughout the state, and also continue to fund workforce development through our Michigan Works! branches and our Community Colleges.
If we continue to develop the workforce, and improve Michigan’s tax and regulatory structure, we will be positioned to grow jobs.


Look for more candidate’s
responses in next weeks issue.