Published in Economic Development

2018 policy outlook: Tapping into Michigan’s talent and controlling unfunded liabilities

BY Sunday, December 24, 2017 03:18pm

Business and local government advocates aren’t always aligned on policy issues, but both groups say 2018 will require concerted efforts to attract and retain talent in Michigan.

“Talent is a top issue for the business community,” said Andy Johnston, vice president of government and corporate affairs for the Grand Rapids Area Chamber of Commerce.

The same goes for the Michigan Municipal League, which advocates on behalf of local governments across the state.

“The League is really invested in building places that will drive economic development and attract talent,” said Chris Hackbarth, director of state and federal affairs at the MML.

For MML, Hackbarth said this means focusing on the “concepts of placemaking and housing talent — building areas where businesses want to move into and where college graduates and young talent want to move to.”

Hackbarth said fixing the way local governments are funded in Michigan is at the heart of the issue, particularly because local governments are highly dependent on revenue sharing from the state as well as property taxes, which are limited in how fast they can rise after a recession. 

“If a county lost 50 to 60 percent of its tax base due to recessions, they’ll never get it back, which hinders the ability to invest in core services,” Hackbarth said.

Johnston said one of the key talent initiatives under Gov. Snyder is funding for skilled trades training, which has continued to increase in recent years. In fiscal year 2018, employers in a seven-county region in West Michigan (Allegan, Barry, Ionia, Kent, Montcalm, Muskegon and Ottawa) will receive $8.4 million in training funds, a 56-percent increase over last year, according to West Michigan Works! data. Johnston said this will benefit more than 7,000 workers in West Michigan.

“We had incredible employer feedback about this helping to move the needle in addressing our talent needs,” Johnston said.

Johnston said the GR Chamber was also part of the Good Jobs for Michigan Coalition that worked to “put Michigan in the game when it comes to competition for economic development projects.” The chamber is also hoping to see bills passed in 2018 that expand career tech opportunities and create “better relationships between students, job providers and teachers,” Johnston said.

“We’re in the midst of our 2018 government affairs survey, and talent is coming through again as the No. 1 issue,” Johnston said. “Our businesses need more talent to compete — the stakes are high for Michigan to address this.”

Wendy Block, senior director of health policy, human resources and business advocacy at the Michigan Chamber of Commerce, said providing better opportunities for K-12 students to enter the workforce “can be hard to legislate,” but it could include more curriculum flexibility and exposure to career and technological training.

Block also said reforming the state’s personal property tax system, repealing the Health Insurance Claims Assessment and reforming the rules-making process at the state Department of Environmental Quality are also priorities for 2018.


Both statewide and local business groups, as well as the Michigan Municipal League, said fixing local governments’ unfunded liabilities for retirees will continue to be an issue in 2018. At the outset of 2017, business groups said unfunded liabilities would be a top priority for the year.

On Dec. 12, the Legislature passed bills that give more local control over how municipalities deal with retiree pension and health care costs. Originally, some lawmakers pushed for expanded emergency manager provisions that would give the state more power to step in and resolve shortfalls.

Those interviewed for this story characterized the bills as a good first step that falls short of addressing the issue long term, which will likely continue after Snyder leaves office at the end of 2018. In July, a Snyder-appointed task force found areas of “limited consensus,” but that “doesn’t necessarily reflect the problem,” Hackbarth said. The task force found roughly $18 million in retiree pension and health care costs that are unfunded.

The latest bills are “incomplete,” Hackbarth added. “We need to diversify local revenue streams and give more control over revenue streams.”

Johnston said the GR Chamber “wants to work to identify a path to legislation that will provide solutions to the problem at the local level.”


With elections this year for statewide office, including for governor, observers don’t expect much controversial legislation to be pushed.

Hackbarth hopes the debate tied into attracting e-commerce giant Amazon’s second headquarters will make it into the gubernatorial election.

“That’s exactly what the League is talking about: strong places and strong communities to attract that level of business investment in Michigan,” Hackbarth said.

The MML also is considering opportunities to codify in state law a favorable court ruling involving a case between the city of Escanaba and Menard Inc. In October, the Michigan Supreme Court denied an appeal from Menard that effectively ends the “dark store” property valuation process that threatened to strip municipalities of property tax revenue.

“The court deciding not to take that up was a major victory,” Hackbarth said.

The bigger policy storyline developing for 2018 could be which initiatives qualify to get on the ballot (see sidebar), or which receive attention directly from the Legislature if it decides to act. Those issues include legalizing recreational marijuana, repealing prevailing wage, creating a part-time Legislature and establishing an independent redistricting commission.

The state and regional chambers have already come out in support of the Legislature taking action to repeal the state’s prevailing wage laws on its own. The Michigan Chamber of Commerce is opposed to the language that’s been approved to legalize recreational marijuana, and both the state and regional chambers are opposed to plans increasing the minimum wage, requiring employers to provide paid sick leave to employees and creating a part-time state Legislature.

Amid statewide issues, however, Johnston said the GR Chamber will “enhance” its advocacy on local government issues, such as parking in Grand Rapids and the city of Wyoming’s exploration of an income tax.

“We want to ensure we’re continuing to focus on strong core services of government, and that’s something we’ve been hearing from our members on local-level issues,” Johnston said. “The growth of our community can’t be taken for granted — we can’t become complacent.” 

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