Mich. business climate improving--slowly

By Kathy Barks Hoffman Associated Press LANSING (AP) -- Michigan's business climate is improving but still lags more competitive states, according to a report released Monday by Business Leaders for Michigan during a Lansing conference attended by about 300 business leaders. The state is starting to recover from its decade-long economic slump as its unemployment rate creeps down and per-capita income growth inches up. But it isn't doing a very good job selling its strong points to corporate leaders considering places to locate, according to the report. Those findings were echoed by Ron Starner, general manager of Site Selection magazine and Conway Data Inc. Detroit recently ranked seventh on the top-10 list of metropolitan areas attracting new business projects, ahead of Pittsburgh and Indianapolis, in part because of the resurging auto industry, he told the conference. But too many business executives rank Michigan's business climate as middle-of-the-pack even though it has attracted hundreds of new projects in recent years that have ranked it in the top 10 most successful states. "Michigan has tremendous potential" and can turn that perception around, Starner said. Meijer Inc. President Mark Murray and Amerisure President and CEO Richard Russell said there's no doubt Michigan is making progress, but still has a ways to go. In the report, Michigan received poor scores on corporate tax rates but will see that improve when a 6 percent corporate income tax takes effect in 2012. Businesses also will get a break on unemployment taxes now that the state will offer only 20 weeks of unemployment benefits instead of the traditional 26. Republican Gov. Rick Snyder campaigned on a pledge to cut business taxes and promises the change will create more jobs, although he hasn't said how many. Democrats say the changes are giving businesses huge breaks while school funding is cut and individuals -- particularly seniors and low-income workers -- pick up the tab for the $1.7 billion corporate tax cut. They also say reducing unemployment benefits will hurt workers still having a tough time finding work in a state with a 10.3 percent unemployment rate. "With Michigan's economy leading the nation out of a recession, Governor Snyder and his Republican Legislature threaten to derail it by ramming through the largest redistribution of wealth in our state's history," state Rep. Maureen Stapleton, D-Detroit, said as the tax cut was being passed last month. "While Governor Snyder cannot guarantee a single job will be created by his corporate tax giveaway to lobbyists and lawyers, Michigan retirees will pay the tab." Other critics of the business tax cut have pointed to studies showing that business tax rates aren't a top consideration for companies looking to expand or relocate. They note that business executives also say they want a strong education system and livable cities, two areas threatened by Snyder's budget cuts. "The recent public policy focus has been on how to make Michigan a business-friendly state through cutting business taxes. We also need to look at what it takes to make Michigan a good place for its families to live. We need a balance," Karen Holcomb-Merrill of the Michigan League for Human Services said recently. The business leaders attending Monday's session, however, said the state hasn't gone far enough to make Michigan a business-friendly state. Russell said the state needs to look at reducing or eliminating the personal property tax businesses pay on equipment such as computers and factory machinery, a move that potentially could cost local governments $1 billion a year in revenue. He also said it will take some time to change the perception of Michigan until business leaders can see the lower tax rates, fewer regulatory impediments and more upbeat attitude being pushed by the governor take effect. "What we're going to have to do is sell the future of Michigan," he said. "Young people have to have the belief ... this is a great place to stay." Published: Wed, Jun 22, 2011