Granholm inherited big mess in Lansing

Published 6:25 am Monday, April 17, 2006

By Staff
Gov. Jennifer Granholm visited Niles and Dowagiac on Saturday as she looks ahead at trying to convince voters to reward her with a second four-year term this fall against Grand Rapids Republican Dick DeVos.
The former attorney general inherited a budget deficit approaching $4 billion from John Engler's administration.
If you are regularly exposed to Republican rhetoric about Michigan leading the country with its 6.6-percent jobless rate, it might have been a shocking statistic when the governor reported that 99,000 more people have jobs than when she took office.
To pick just one for-instance, it was interesting to follow last week the twists and turns the debate over Michigan's controversial Single Business Tax (SBT) is taking. DeVos was joined in Coloma by Oakland County Executive L. Brooks Patterson, House Speaker Craig DeRoche, Sen. Ron Jelinek, R-Three Oaks, and Reps. John Proos, R-St. Joseph, and Neal Nitz, R-Baroda, to emphasize that repealing the “job-killing” SBT is the only way for Michigan to climb out of its “single-state recession.”
Adopted in 1975 to replace seven previous taxes, the SBT “is a tax on payroll, not on profits,” Patterson said, calling the SBT “one of the primary reasons Michigan ranks 50th in economic momentum and first nationally in unemployment … There is a crisis … We must act now” because Michigan lost 29,000 jobs in January and 12,800 more in February.
Granholm agreed and challenged GOP leaders to repeal the SBT by the end of 2006, so long as it doesn't shift the $2 billion revenue loss to citizens in the form of hiking the 6-percent sales tax or deep cuts in health care, education or police and fire services. Republicans seemed to backpedal. House Majority Leader Ken Sikkema said it would be a bad idea to attempt such a restructuring during an election year.
The Council on State Taxation, which conducts a survey of all of the states and their business taxes to determine how expensive it is to do business in various states, reported Michigan falls 10 percent below the national average. “It's not that we take in too much,” she said, “it's just the way it's structured is odd and it should be fixed. But it's not the rate. Business taxes aren't too high, they're structured poorly. It was put in place in 1975 and written with the auto industry in mind. The way it's written now” resulted from three decades of creating loopholes.
The governor remains optimistic about overhauling the SBT by the end of 2006.