Tuesday, June 7, 2011

Former Saginawian gives his view on Gov. Snyder's moves to court business

by Janet I. Martineau
Newly serving Gov. Rick Snyder has been taking a lot of heat lately for his new moves to cut taxes for businesses operating in the state....at the expense of pensions for retirees and support for school students.
Michael A. Finney
Maybe he and his administrators just need to do more efficient explaining of the method behind their madness.
Michael A. Finney, the president and CEO of Snyder’s Michigan Economic Development Corporation, did just that recently when he stopped by in Saginaw to talk to members of the Rotary Club of Saginaw.
Finney is no stranger in these parts. From age 17, he spent 18 years in Saginaw -- as a student at SVSU, as a senior vice president and general manager at Thomson Saginaw, and as an assistant city manager.

"What Gov. Rick Snyder is trying to do is reinvent the state of Michigan,"  Finney told Rotary members  -- noting we were at No. 49 of the 50 states when it came to unemployment and joblessness.

"We lost 800,000 jobs in the last decade, and the governor is trying to create a fair and efficient environment in the state. We have one chance to get it right, and yes there is a shared sacrifice in this when it comes taxing the pensions of seniors and decreasing subsidies for schools."

The legislature has passed the most balanced budget in the last decade or more, he said, and an improved bond rating is likely to follow. That translates to more affordable bonds when entities like schools seek them to build new facilities, he said.

The reduced business tax which passed the legislature and Snyder signed  will result in 95,000 of the 141,000 businesses in the state no longer paying a business tax, Finney said -- helping make us the second most competitive state in the Great Lakes rather than the last. Indiana is No. 1. More business operating in the state results in more jobs and more taxes collected from workers, which benefits state operations.

Regarding incentives, Finney said companies think in shorter cycles of 1-4 years and Michigan was giving tax incentives of 5-10 years, resulting in $8 billion in tax credits. "We will now do things in 1-4 years and no longer be giving away tens of millions of dollars. And if a business is not creating the jobs, then they should not get a tax credit."

Finney also said that in interviews with companies, the lure of incentives comes AFTER they address the issues of being able to find the talent they need, the tax burden and the quality of living.

He called the new plans underway "economic gardening" and says his team is building a tool kit to help it grow.

-- The state surveyed businesses on what they need, rather than the state assuming what they need.  They said money is No. 1 but banks have tightened up. So the state created an $80 million pool for collateral support which will in turn leverage private support.

-- The state will offer export assistance. Very few U.S. companies export, less than 5 percent. "We have a staff of export experts to assist. That and the state government and all of us have to buy more from Michigan."

-- The state will help businesses find the talent they want.

We need to, he says, get back to the days of entrepreneurs like H.H. Dow, Henry Ford, W.K. Kellogg, C.S. Mott "who made Michigan and the U.S. the economic engine it is."

The founders of Google, Barracuda Networks, Groupon were Michigan-linked men who found start-up support elsewhere when Michigan did not foster or incubate it. "We need to develop others like them and are putting $25 million a year into this."

Also underway is a proactive Mich Again campaign which brings 250 college kids to  Michigan city for a day visit, showing the good, the ugly, the job opportunities. Detroit was first. Midland is next. 

Mich Again also is working through alumni networks to bring Michiganders back. In the next 12 months visits are planned to cities all over the United States.

-- The state is forming an emphasis on urban cores -- Detroit, Benton Harbor, Battle Creek, Grand Rapids, Saginaw, Flint -- and staff to advise this urban initiative.

-- Pure Michigan "is the best brand going so we will continue to focus on that. It really plays well and people get emotional about those ads. We want to expand it from tourism to include business as well."

To people worried about the rise of China, "It is a fact the world is getting very small. They are investing in us and we want to encourage that."

The Michigan Council for the Arts and Cultural Affairs also is under Finney's leadership "and while it will never be as high as it once was, last year its budget was $1.2 million and next year it is $2.5 million." 

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