Published in Economic Development
Charles Owens, state director of National Federation of Independent Businesses Charles Owens, state director of National Federation of Independent Businesses Courtesy Photo

Michigan small businesses remain ‘very optimistic,’ NFIB director says

BY Sunday, December 24, 2017 05:37pm

Charles Owens’ nearly 25 years as director of the Michigan office for the National Federation of Independent Businesses has coincided with four governors in Lansing: Jim Blanchard, John Engler, Jennifer Granholm and Rick Snyder. Since Gov. Snyder is term-limited, Michigan voters will elect a new governor in 2018, a year in which the NFIB will get involved to oppose two possible ballot proposals: One to require employers to provide paid sick leave to employees, and the other to raise the state’s minimum wage to $12 an hour by 2022. That’s on top of a minimum wage increase of 35 cents to $9.25 per hour on Jan. 1. The NFIB also plans to back a proposal to repeal Michigan’s prevailing wage law.

What are the big statewide issues for small businesses in 2018?

Right now, one of the biggest challenges that we’re looking at are these ballot proposals dealing with minimum wage and paid leave. The advocates of these proposals, based on the campaign filings, have money and have enough to get paid signatures. Whether they’ll get them in time remains to be seen. We have another ballot proposal that we actually are favoring and that’s to repeal Michigan’s prevailing wage, and that’s going to be one of the first early fights in 2018. 

Why is that issue setting up to be a battle? 

It’s a citizen-initiated law and they’ve already turned in more than the required number of signatures and it’s going through all of the processes with the Board of Canvassers and the Bureau of Elections. Assuming it gets through all that and all of the legal challenges, it will show up in the Senate and the House either at the very end of this year or early next year, and they have 40 days to act on it, either pass it or it fails. Or do nothing … and it goes on the ballot. It’s the same thing with the minimum wage and the paid leave (initiatives).

How do you see the business climate these days for small businesses?

Very optimistic, and I say this for a couple reasons. First of all, Michigan, beginning with Gov. Snyder and the change in legislative power, has made huge changes in our business climate, starting with getting rid of the Michigan Business Tax (and) the change in the personal property taxes. These are great things. What was always holding us back, though, is we don’t operate just within the borders of Michigan, and there was just a lot of negative business climate energy coming out of the White House with our federal government, and for the first time we’re aligned. We’re seeing a lot of things happening at the federal level (in regulatory and tax reform) that frankly are reminiscent of what we did here when Gov. Snyder took office.

How do you think the state’s economy will do in 2018?

I think the state economy is going to do great in 2018 for a couple reasons. These changes (years ago in the state’s tax code) have taken a while to percolate through and translate into jobs and into economic activity. We’re there now. Going forward with the changes at the federal level, we’re going to have a great business climate. I think 2018’s going to be a great year.

What’s your biggest concern?

(I’m concerned) the further you get away from the reason that you made all of these changes. In other words, the way that we were at the end of the prior (governor’s) administration, we led the nation in just about every bad index that we could find. It was in that environment that we made some pretty significant changes to turn that around. As time goes by and with term limits, you have lawmakers (who) don’t remember how bad it was and the reasons why we did what we did, and so we start to get a little bit of drift and ideas that we should know better. We forget and people start to make the same mistakes.

Give me an example of that.

We’re back into this corporate welfare mentality, targeting economic development to specific industries or specific sizes of industries. Basically we’re already starting to mortgage our tax revenue stream going forward. In all fairness, it’s not as bad as the Granholm administration and they never kept track of it, and we’re still paying for that. We have $9 billion of unclaimed MEGA credits that were given away with very little accountability. So you would think we would learn from that.

How do you see that playing out now? 

(We have) the ‘Goods Jobs’ bill and these kinds of things that the Legislature has passed, and I will give them credit that it’s a little easier to keep track of them and most of them have a cap. So they have learned some things, but what they haven’t learned is that they don’t really work on a macro basis. Certainly, it works for that firm that receives a significant credit or a significant tax incentive or whatever it is that they give out. For that specific business, for a specific locality at a specific time, there may be a measurable increase in jobs and economic activity. But on a macro basis, it never really pays off.

What should the state do instead of targeting economic development? 

It’s better to take that kind of money and put it back in the pockets of taxpayers and businesses, or keep it in the revenue stream so that you don’t have uncertainty when you have economic downturns.

What would surprise you in 2018?

If the voters decided to go back to the failed policies of the past by electing folks that have that kind of a mindset so that the control of the Legislature would change or the governor’s office. It would disappoint me. Maybe not surprise, but disappoint me.

What’s one prediction for 2018?

I think you’re going to see prevailing wage repealed. That’s something that folks have been trying to accomplish since it passed (decades ago), at least since the Republicans controlled the Legislature and the Governor’s office. I think it’s going to happen next year.

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