Road Funding and Prevailing Wage Lead Off Top Small Business Issues
Michigan’s leading advocate for small business announced
its top priorities for the coming legislative session. The National Federation
of Independent Business (NFIB) “Main Street Agenda for 2015” emphasizes
building on the substantial improvements to Michigan’s business climate from previous
sessions while addressing remaining challenges for small business.
While giving Governor Snyder and lawmakers high marks for turning
Michigan around from the “lost decade” of the previous Granholm administration,
the organization noted that the recent road funding proposal is not supported
by Michigan’s small business owners.
“We were optimistic as the road funding proposal moved
through the 2014 lame duck session, said Charlie Owens, Michigan State
Director for the NFIB. “When the dust settled, however, the final proposal
departed from the encouraging outline presented originally into a proposal that
reflected political horse-trading more than sound policy.”
NFIB determines policy positions on issues on behalf of its
members by a voting process that allows all members a voice in the process. A
survey on the road funding proposal and the May, 2015 sales tax ballot was sent
out to the members in early 2015 and the results show that 75 percent of NFIB
members responding opposed the road funding proposal.
The NFIB’s other lead priority, repealing Michigan’s
Prevailing Wage Act, is also tied to the road funding issue as it appears that
the Governor made a commitment to veto any such repeal as a way to secure needed
votes during bargaining on the road proposal.
“Repealing Michigan’s wasteful prevailing wage act is an
important step in assuring fair and open competition on publicly funded
construction projects,” said Owens. “The law results in overcharging taxpayers
on publicly funded construction projects by requiring that union scale wages be
paid regardless of whether a contractor has non-union employees.” Owens said
that the law also discourages small business contractors from bidding on public
“NFIB will be teaming up with the Associated Builders and
Contractors (ABC) and other free market groups to pursue the repeal of
prevailing wage in Michigan in 2015 despite the setbacks from the road
proposal,” said Owens.
NFIB’s top priorities
for 2015 are:
Fight for Small
Business in the Road Funding Debate
NFIB’s official position of opposition to the road funding
plan passed in late 2014 was decided by NFIB’s small business members when it
was put in front of them for a vote in early 2015. NFIB determines policy
positions on issues on behalf of its members by a voting process that allows
all members a voice in the process. NFIB will be opposing the road funding plan
and the May state-wide ballot proposal to raise the sales tax.
Prevailing Wage Law
Repealing Michigan’s Prevailing Wage Act is the next step in
assuring fair and open competition on publicly funded construction projects.
The state’s current prevailing wage law acts as a “super minimum wage” that
sets wages much higher than local construction wages determined by fair
competition in the free market. In 2015, NFIB will be supporting
legislation that will eliminate the prevailing wage requirement on public
construction projects financed with state taxpayer dollars.
Stop Local Government
Wage and Benefit Regulation
Small business cannot afford local micromanagement of
employer benefit policies. County and municipal governments have threatened to
layer on duplicative requirements and regulations on small business at the
behest of local activist groups or advocates who are unsuccessful in
accomplishing these policies at the federal and state level. NFIB will be
seeking legislation, such as last session’s House Bill 5977, that would
prevent these anti-business efforts from gaining ground in cities and
communities around the state.
on Cutting Unnecessary Regulations
Much progress has been made in improving Michigan’s
regulatory policy and recognizing its impact on the overall business climate
for our state. With the support of the Snyder administration and the
legislature efforts have focused on establishing a clear and convincing need
standard and procedure when considering any rule that exceeds Federal
standards. In addition, the practice of commissions and agencies acting outside
of legislative intent has been restricted. However, new threats are always on
the horizon such as recent efforts to require businesses to install software
monitoring systems that report transaction data directly to the Michigan
Department of Treasury. NFIB will pursue additional opportunities to lighten
the regulatory burden on Michigan small business.
Michigan’s Right to Work Law
Landmark legislation making Michigan a Right to Work state
was passed at the end of the 2012 session; however the fight for worker freedom
has just begun. Already the Civil Service Commission is claiming that state
employees are not covered by the law and many labor unions renegotiated
contracts as far out as possible before the law’s effective date. These
actions, and others, mean that NFIB, the NFIB Small Business Legal Foundation
and labor freedom advocates will be working to ensure that Michigan’s Right to
Work law is implemented as intended.
Attempts to Change the New Corporate Income Tax
Dumping the dreaded Michigan Business Tax (MBT) and
replacing it with a new small business friendly Corporate Income Tax is a major
victory for small business, but special interests are already looking for ways
to “tweak” the tax and expand the base or raise the rate. Some have even
suggested that small business isn’t paying its “fair share” because many do not
pay the Corporate Income Tax – ignoring the fact that they pay their business
tax through the personal income tax. They want to return to the MBT double taxation
of small business profits. NFIB will be on guard against efforts like these.
Private Property Rights are the bedrock of our free
enterprise system and they are always under attack from overzealous government
agencies and local government. Recently, local governments have attempted to
retroactively asses property owners for past fees and taxes uncollected because
of their own incompetence. NFIB will continue to work to end the abuse of
private property rights and fight against regulations that diminish the use and
value of private property.
Prevent Erosion of
Liability Reforms in Michigan
Over the years, one of the few bright spots in Michigan’s
business climate has been our legal system. Small business is especially
vulnerable to frivolous and groundless litigation and vigilance is necessary if
we are to keep this advantage from being eroded by trial attorneys and activist
No Services Tax to
Michigan has finally brought spending under control and balanced the budget without gimmicks, however, the tax and spend crowd is always floating a tax on services as a way to raise more revenue so it can resume spending. Recently, the Superintendent of the State Board of Education made public comments that the sales tax should be expanded to services as a way to increase funding for education. A services tax was also put on the table in the lame duck session of 2014 as a way to fund roads. In addition to these efforts, the Michigan Department of Treasury seems to always be on a “fishing expedition” for more revenue by reclassifying items that were previously considered services as products so they can now be subject to the sales and use tax. A recent example of this activity is Treasury’s reclassification of previously exempted services involving remotely accessed software to that of a product and requiring sales and use tax to be paid. Many small businesses that use these services (such as payroll and tax processing) are now required to pay sales and use tax on the service fees.
NFIB defeated attempts to expand the sales tax to services in 2010, 2011 and during the lame duck session in 2014. We will be working again in 2015 to keep this bad idea off the table and to seek legislation to reel in Treasury’s efforts to expand the sales tax to services by reclassification of one service at a time.