The Michigan Daily - michigandaily.com

Monday, October 12, 2009 - 9A

Lawmakers balance business tax with public needs

From Page 1A
that involve increasing taxes and
repealing tax credits in order to fill
the holes left in the pending budget
for the 2010 fiscal year.
In general, the Republican-con-
trolled Senate has favored cutting
state programs as a solution, while
the Democrat-controlled House is
looking for ways to increase rev-
enues, like raising certain taxes.
Last week, the House passed three
revenue-raising bills with provisions
to increase taxes on physicians by 3
percent, freeze the personal income
tax exemption and eliminate credits
that allow companies to avoid the
Michigan Business Tax.
Rep. George Cushingberry Jr.
(D-Detroit), chair of the House
Appropriations Committee, intro-
duced one of these bills, House Bill
5384. Cushingberry said that by
making the Michigan Business Tax
applicable to more companies, the
bill would raise funds for programs
like the Michigan Promise Scholar-
ship, which would be cut under the
current proposed budget.
Inaninterview,Cushingberrysaid
that in this situation, he disagrees
with acommonnotioninpoliticsand
economics that by increasing taxes
on businesses, lawmakers hurt the
state's appeal to companies. Cush-
ingberry said that cutting Michigan
Business Tax credits wouldn't be a
hindrance to business in the state,
as lessthan 10 percentofa business's
decision to open its doors is based on
tax credits.
"That is one of the minimal fac-
tors," he said. "It's a spurious argu-
ment."
LizBoyd, press secretaryforGov.
Jennifer Granholm, said Granholm
supports the bill, which would
generate more than $116 million in
revenue for important state-funded
programs.
"Gov. Granholm believes that
Michigan's future demands a bud-
get that helps us diversify our
economy, attract new investments
and creates new jobs," Boyd said.
EISENSTEIN
From Page 1A
all year. It was a "blackout" night
game broadcast on national TV in
a stadium with about a foot and a
half Between the bench a'nd the
first row of fans. And there was a
very small Michigan fancontin.-
g en Lre, espeelelr < ed
to when the Wolverines played in
East Lansing.
So there must have been some-
thing there - even though Rodri-
guez kept returning to the same
point: "Don't start off trying to
create something that's not there."
There's no one that wants to win
more than the head coach, and that
was clear when Rodriguez reluc-
tantly and at first hastily answered
questions about the quarterback
decision. For the first time this
season, neither quarterback was
allowed to speak to the media.
But I don't know what that
"something" was.
Maybe something happened in
practice or a film session during the
week. Maybe Forcier's head just
grew too big, too quickly. Or maybe
Forcier talked back to. Rodriguez
on the sideline when his coach
was screaming at him (or coach-
ing him, depending on who you

ask) on national television.
But why would Rodriguez, who
wants to win more than anyone
else, teach his comeback quar-
terback a lesson with 90 seconds
remaining in a game against the
No.12 team in the country?
Perhaps Rodriguez was in a bad
mood and let it cloud his decision
making - he was visibly angry at
multiple players on the sideline,
including redshirt freshmen J.T.
Floyd and Roy Roundtree. But you
don't notch 112 career wins as a
head coach if you let anger get in
the way.
One explanation is that Forci-
er was just playing poorly and
Rodriguez felt more confident
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"Michigan's future demands a bud-
get that keeps police officers and
firefighters on the job and on our
streets, and that helps our children
afford a college education and pro-
tects people at risk during these
tough economic times."
But many GOP lawmakers, like
Rep. Dave Agema (R-Grandville)
disagree.
Agema said the Michigan Busi-
ness Tax is both a deterrent for
businesses looking to open shop in
the state and a strain on existing
businesses. Taxing during a reces-
sion only exacerbates poor econom-
ic conditions, he added.
"The Michigan Business Tax is
one of the most onerous taxes in
any state," Agema said. "Businesses
need to come here and hire people.
That's how we're going to get our
way out of this recession. And that's
going to have to be a profitable
place for businesses to come, both
in regulation and in taxes. Right
now we're not that state."
The bill was passed in the form
of a shell bill, according to Rep. Bill
Rogers (R-Brighton). This prac-
tice allows lawmakers to get a bill
passed while postponing the cre-
ation of specific details, Rogers
said.
"(The) shell bill is a lot of posi-
tioning by both parties to get ulti-
mate goals, which in many cases,
we as legislators, aren't privy to,"
Rogers said.
Rod Byrne, former chair of the
Ann Arbor Area Chamber of Com-
merce, said C-corporations who file
underthe fiscalyear,whichincludes
many manufacturers, would be
most affected by a decrease in tax
credits under the Michigan Busi-
ness Tax.
Though the clear top priority of
state legislators is to create a bal-
anced budget, they also need to
think about the state's long-term
economic goals, Byrne said.
"Right now the goal seems to be
very focused on balancing the bud-
get but if you see economic growth
as a means of long-term balancing
in Robinson leading the offense.
Forcier was having his worst sta-
tistical game of the season, going
8-for-19 with an interception and
a fumble. But he wasn't exactly
making a case for the Heisman
Trophy before he led game-tying
drive against Michigan State.
The most plausible explanation
might be what happened on Forci-
Uer's last orrives
After Michigan's flimsy defense
came up with its biggest stop of the
game - a fourth-down goal-line
stand on the one-yard line - with
nearly 13 minutes remaining, there
was a huge momentum shift.
Forcier took over, standing in
his own end zone. First and second
down went for zero yards. Then, on
third down, with one tick left on
the play clock, the offense was bla-
tantly out of whack. Center David
Moosman snapped the ball through
the back of the end zone as running
back Brandon Minor called Michi-
gan's second timeout so the unit
could collect itself. No one seemed
to know what was going on.
The decision to use a timeout
then was critical. The clock wasn't
moving, and the Wolverines would
have been penalized half the dis-

budgets, you need to find ways to
get businesses to come to the state
of Michigan," Byrne said. "Having
a high or difficult-to-manage or
difficult-to-plan-for business tax is
not a way to do that."
Businesses, initially discour-
aged by the proposal to eliminate
the Michigan Business Tax credit,
were greeted with more optimistic
news for business taxes late Thurs-
day night in the legislature's other
chamber. The state Senate passed a
bill close to midnight that created a
plan to generate funds for the K-12
budget, while also getting rid of the
Michigan Business Tax surcharge.
This proposed repeal of the
22-percent surcharge will greatly
help struggling businesses in the
state, according to Jim Holcomb,
vice president of Business Advo-
cacy and associate general counsel
for the Michigan Chamber of Com-
merce.
"(It) will have a great impact on
economic growth in the state of
Michigan," Holcomb said. "(It will)
help provide jobs, help reduce (the)
unemployment rate ... (It) really
took a positive step for Michigan."
The package of bills passed in
the Senate will modify some of
the credits under the Michigan
Business Tax, which will create
additional revenue to allow for the
phase-out of the surcharge over
three years, Holcomb said.
The phasing out of the Michi-
gan Business Tax surcharge
would cost the state about $159
million, according to Rep. Joan
Bauer (D-Lansing).
Mike Johnston, vice presi-
dent for Government Affairs for
the Michigan Manufacturers
Association, said the various tax
increases in the bill would offset
the decrease in revenue from the
repeal of the surcharge.
But Johnston said Michigan
businesses, especially manufac-
turers - which make up the larg-
est sector of the state's economy
- "truly appreciate" the proposed
removal of the surcharge.
tance to the goal line - just a half of
a yard --ifthey were called for delay
of game. On the replay of the down,
Forcier heaved a bomb into double
coverage that fell incomplete.
There was clearly some miscom-
munication or misunderstanding
going on with Forcier on the field.
On his next drive, Michigan was
called for a delay of game on first
down and the Wolverines were
forced to punt three plays later.
Robinson came in on the next
possession, and then Rodriguez
pulled Forcier off the field for the
final drive - potentially the game-
winning one.
"As the head coach, I can do
that," Rodriguez said snarkily. "We
can decide what we want to do."
But this isn't West Virginia,
where the Mountaineers are only
relevant when they win. At Michi-
gan, winning, and especially los-
ing, is always a big deal.
We all know Robinson's "spark"
was not the only reason Forcier
didn't take the field on Michigan's
final drive.
So what was it, Rich Rod?
- Eisenstein can be reached
at mseisen@umich.edu.

Boyd said Granholm's proposed
budget includes the removal of the
surcharge.
"The Governor has proposed a
balanced budget that funds our pri-
orities and she has also proposed a
solution for phasing out the MBT
surcharge, which is a priority for
the business community," Boyd
said.
Michigan was ranked No. 49 on
Forbes' 2009 list of "The Best States
for Business" and holds the No. 50
spot for both the economic climate
and growth prospects ranks.
Holcomb said the Michigan Busi-
ness Tax could use clarification on
a number of technical points that
will affect business owners.
"If we get this active, it will
repeal the surcharge but there still
are other issues with many busi-
nesses across the state," Holcomb
said. "It's certainly far from a per-
fect tax."
The Senate bill now moves to the
House for deliberation.
According to Bauer, the House
has "a number of concerns" with
the proposal, including the suspen-
sion of the earned income tax cred-
it, which helps the working poor.
"There has to be more study
of this so we think that this way
to raise revenue makes sense for AL GOLDIs/AP
Michigan," Bauer said. The moon rises over the dome of the state Capitol building on Sept. 30.

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