After being a national laughing stock eight years ago, Michigan is back on track and is now a great state to bring a business, grow a business, or start a business. While 2017 continued this progress with the passage of government pension reforms and restrictions on local efforts to tax soft drinks, there are still items on the checklist for the remainder of this session that must be addressed if we are to continue the path to prosperity and opportunity for small business and our citizens.
Federal Tax Relief Must be Carried Through in State Taxes
The recent passage of the federal Tax Cuts and Jobs Act will require that changes be made to our tax code to avoid state tax increases on Michigan taxpayers. While early indications from the administration and legislative leaders are that state taxpayers should be held harmless from any increase due to these federal changes, there are others that believe any extra revenue should be spent elsewhere instead of being returned to taxpayers. It is imperative that tax relief intended for taxpayers in the federal reforms flow through to Michigan taxpayers.
Repeal Michigan’s Prevailing Wage Law
As soon as February of this year, the Legislature will likely be presented with a citizen-initiated law (via a ballot initiative) to repeal Michigan’s wasteful and outdated Prevailing Wage law. This law drives up construction costs for taxpayers and discourages small business from bidding on government construction projects. It is nothing more than protectionist regulation for and by construction labor unions. If the Legislature does not act on the proposal within 40 days, then it goes on the November 2018 statewide ballot for a vote of the people. However, NFIB has made it clear that this is an issue that should be acted on immediately by the Legislature and not punted to a statewide vote.
Action Needed to Halt Mandated Paid Leave and Minimum Wage Hike
Union-backed groups are on track to put both a mandated paid leave law and another minimum wage hike before state voters in November 2018. If lawmakers allow these proposals to go to the ballot, and they are passed by the voters, a three-fourths super-majority of the Legislature would be required to change the law. Michigan will then be stuck with the most stringent paid sick leave and minimum wage employer mandates in the country. Lawmakers must act to keep these proposals off the ballot prevent Michigan from moving backward.
Reform Michigan’s Costly No-Fault Auto Insurance System
In 2017, a fair and reasonable proposal to reform Michigan’s Costly No-Fault Auto insurance system failed to muster enough votes in the Legislature to become law. NFIB will continue to support efforts to address the high auto insurance rates paid by citizens and small business by capping unlimited coverages and supporting improvements that lower cost.
Close the Skills Gap
With the state and national economy finally firing on all cylinders a serious shortage of qualified workers has emerged that has the potential to cut short future economic expansion. While Michigan has tried to address this situation, more needs to be done in the coming years to be sure that a trained workforce is ready to fill growing job opportunities.
“Michigan is back on track, but there are still items on the checklist for the remainder of this session that must be addressed if we are to continue the path to prosperity and opportunity for small business and our citizens.”
Continue Progress on Cutting Unnecessary Regulations
Progress has been made in improving our regulatory policy and making state agencies more accountable to the Legislature and citizens, but there is always more work to be done. A case in point is the little known Public Service Commission rule that would have required many small businesses to replace their phone systems by the end of 2016. It took legislative intervention to get the deadline extended to 2019 —but the rule still needs to be changed or rescinded entirely. In addition, state agencies should have to pay the court costs of a prevailing party when that state agency loses a lawsuit involving a regulatory or permit issue.
Keeping the State’s Fiscal House in Order
For years NFIB has led the fight to demand spending reforms and head off attempts to balance the budget on the backs of Michigan small business by raising taxes. During Gov. Rick Snyder’s tenure, Michigan has enjoyed fiscally balanced budgets on time and without gimmicks. But vigilance is needed to be certain that runaway spending and the urge to finance it with new taxes do not make a comeback.
Enough Local Government Over-Reach
Like the game of “Whack-A-Mole,” every time the state passes restrictions on local efforts to raise taxes or duplicate already existing federal and state laws – local governments hatch a new scheme to grow their bureaucracy with burdensome regulations or new taxes and fees. Small business cannot afford to keep up with overlapping local ordinances and rules and NFIB will continue to seek state prohibitions against local governments that use the “local control” mantra as an excuse to micromanage small business.
No More Corporate Welfare via Targeted Tax Incentives
Policymakers are once again falling prey to the siren song of “economic development incentives” via targeted tax handouts to select industries and individual companies. After the miserable failures of these policies in the past, one would think they would know better. The consistent improvement of the overall state tax and business climate is the proven approach for raising the fortunes of all citizens and job providers. Lawmakers must stay this course and avoid the temptation of quick fix targeted tax cut proposals.
Stop Taxing Health Insurance Claims
While attempts to push a $1.98 billion health insurance tax hike on citizens and small business were thwarted in 2015, legislation that would have eliminated the Health Insurance Claims Assessment (HICA) tax altogether was vetoed by the governor in 2016. The issue remains unresolved and, with the change in administration at the federal level, new opportunities exist to eliminate the HICA tax and find a more equitable alternative to meet the state’s federal Medicaid match requirements.
Small Business Supports Further Civil Forfeiture Reforms
“Civil asset forfeiture laws” allow the government to seize private property from a citizen or small-business owner without ever charging them with a crime. Legislation has already been passed that establishes reporting provisions, raises the standard of proof for seizing assets, and eliminates a requirement for a cash bond before a person could contest the seizure of their property. However, small-business owners in Michigan want to see further reform of the state’s civil forfeiture laws by moving to criminal forfeiture and eliminating civil asset forfeiture entirely.
Protect Private Property Rights
Private Property Rights are the bedrock of our free enterprise system and they are always under attack from overzealous government agencies and local government. Vigilance is necessary to head off laws, rules, and actions by government that erode this basic right.
Prevent Erosion of Liability Reform in Michigan
Reforms to tort law enacted in the early nineties, as well as a conservative state Supreme Court, have given our state a fair and predictable legal system. However, we must continue to guard against legislation that would erode this business climate advantage.