By Staff
'customizable' by town
By JOHN EBY / Dowagiac Daily News
Tax base primarily comes from the business sector which provides a community with jobs.
If those enterprises flourish, Calli Berg said, "They can hire more people and invest more, which means more taxes, which means a wealthier community. They can hire a higher caliber of person, which means your educational system is going to be better because you need to have those people with those skills to get those jobs – which means wages will be better" to stay competitive.
"People who work there are going to be able to buy a nicer home," Berg said. "The ripple effect is really important and it all hinges on the business community. That's my personal definition of economic development. Anyone you talk to, it could be very different. That's the beauty of economic development. It's customizable by the community in which you live," which makes "priorities different from place to place. When I go to conferences where there are economic developers from other states, their focus is often sometimes very different from Michigan's."
Michigan tries to "nurture, identify, grow and assist companies involved in high-tech, life science, bio-science – something that's going to change the gears of our economy and have a bigger impact on other companies and create that ripple effect" that will help diversify Michigan away from dependence on the auto industry.
"If you live in a community that has a high-tech base," she said, "people want to live there. They want to put their homes there and put their kids through school there. They have great public services. They have great public safety. They have money to spend on improving their roads, beautification and community development," she said.
Berg, who lives in Coloma, covers Cass, Berrien and Van Buren counties for the Michigan Economic Development Corp. (MEDC), which she joined in June.
Previously, since 1999, she worked in economic development for the Coloma and Watervliet area and for Berrien County.
For the five years before that Berg was a technical trainer for companies and universities. She spent the five years before that as a technical writer for LECO and Zenith Data Systems, among others.
"I've kind of segued myself into the public sector," where she works with Rotarian Sandra Gower, Dowagiac economic development director.
The MEDC "strongly believes its best leverages what's available at the local level by working with its local economic development partners and with its county economic development partners," Berg told Dowagiac Rotary Club's noon luncheon meeting Thursday at Elks Lodge 889.
Her chief responsibility is to "go out and visit with the business community" for which the MEDC advocates.
"To find out what their challenges are, what the business environment looks like to them, what the trends are in their industry, what's happening with their workforce and training, what's happening with wages and salaries and what we could possibly do to step in and either increase impact by working with our legislators to create new laws that will be more compatible with needs in the business community.
"Or, perhaps we need to work with the educational system to try to figure out where the gaps are for either the K-12 system or the university system. Or, perhaps it's a matter of the roads not being of such a caliber that businesses are able to bring their trucks in and out," Berg said.
"Our role (she has 21 counterparts) is to be the collectors of information for the companies. Conversely, on the back end, we are also communicating with the various state departments," including the Department of Environmental Quality (DEQ) and the Department of Transportation (MDOT).
A creation of former governor John Engler, the MEDC is by design a private corporation as well as a government body with a director the governor appoints and a line item in the state budget to insulate it somewhat from politics, she told Sonja Smith.
"It's worked that way to some degree," Gower interjected, "but over time, as new programs have been created, they depend on the Legislature's purse strings. You can't help politics getting involved when it's tax dollars involved."
Particularly now, the MEDC has become a political football in the skirmish between Gov. Jennifer Granholm's re-election bid against Dick DeVos.
"One side doesn't want (the MEDC) to do well because if they do their job and the economy moves forward, then the other side won't win. They're insulated a lot, but not entirely," Gower said.
Berg said one program MEDC uses is the 21st Century Jobs Fund, created with tobacco settlement funds sought by more than 500 companies and universities. Grants and loans were bestowed on 51 companies dedicated to high-tech processes or research and development so that they have seed money.
A DEQ program utilizes retired engineers to visit facilities for analysis of things like utility usage and scrap rate and make recommendations to help manufacturers trim costs.
"MEDC likes to be involved," Berg said, "because if we can promote a program that saves money, they've got more money to invest in the workforce. If they do need to make an investment, but don't have the cash flow to handle it, contrary to popular belief, there is no free money, but there is a whole slew of opportunities for low-interest loans, long-term loans and partnering local dollars for federal or state dollars. The banking community is often more willing to work with a business if it has some partners onboard. We try to educate our business community to what opportunities are out there to grow. Federal money that flows to the State of Michigan is called Community Development Block Grants (CDBG). This is where a business is going to be hiring people, but it doesn't have a big enough water pipe, for example. I met with a company last week that said every time it flushed its system, the neighbors couldn't flush their toilets. If a company's going to create jobs, we need to be able to offer a grant that allows them to upgrade their infrastructure – roads, water, sewer, for public use, but it depends on jobs creation by a private company. Our business community not only helps us to have wealthier, more active and healthier communities, it also helps us improve our public infrastructure based on their jobs creation. Economic development is critical for communities to have for the type of business climate that brings more business into the community."
Richard Judd of Judd Lumber Co. asked Berg that in light of Michigan having a more than $60 billion agriculture industry and ranking fifth in forest products production, what is the state doing?
"One program created back in like 1999 was tax-free Renaissance Zones," she responded. "It was designed to try to allow communities to identify geographical pockets of poverty, obsolescence – places where they wanted business to be that wasn't there."
Berg said Renaissance Zones proved so successful that the Legislature recently approved 10 more highly competitive zones specific to particular industries, including agriculture and forestry products.
"When I started at the end of June, I was told point blank, we don't give these out to companies because they're nice. We give them out to companies because they have to show that if they don't get them, they can't create jobs," Berg said. "Bigger projects are going to have a better success rate. A forestry products zone could go to pencil makers, cardboard manufacturers, paper plants – anything, if you have some connection to trees that you can prove."
Retired superintendent Larry Crandall posed two questions: first, Berg's insights into how eliminating Single Business Tax (SBT) revenue might be replaced in the state budget and how does Michigan work with venture capitalists to encourage entrepreneurs?
"I have no clue about your first question, but I could make so much money if I could figure it out," Berg smiled. "There's a lot of thought going on behind closed doors on how that's going to be replaced. Plans being batted around are not going to be tweaked and finalized" for public consumption until the outlook of the Nov. 7 general election is known.
Michigan Venture Fund recently hired — Suisse to administer the state's venture capital fund as well as a program administrator.