A moratorium on MBT whining, please

Business owners need to sit down and shut up.

It's time for some tough love. We're all paying loads more for our salmonella-laced tomatoes, Ritalin and of course, gas. Our income and property taxes have gone up, as have local millages, and we pay scores of back-door taxes like higher tuition and activity fees at public schools.

Times are tough all over. But in the Legislature, you'd think it's only businesses suffering under the strain - and everything must be related to last year's evil tax increases. Evidently, they could never be impacted by the housing crisis, credit crunch or the fact that only eight years ago, gas used to be around $1 a gallon.

Most of us would kill for gas prices to inch up at the rate of our income taxes, by the way.

I would love to sit in session and listen to weeping for the homeless and the jobless by slack-jawed Rep. Jack Hoogendyk, R-Kalamazoo. But they don't have lobbyists, so tough.

Before you start scrawling your hate mail, let me make myself clear. I am not anti-business. I am anti-whining.

I don't believe in business taxes because businesses don't pay taxes; people do. I defer to eminent economists like Charles Ballard on that.

If we really wanted to fix our tax system so it brought in the money it was supposed to and was (gasp) fair, we'd adopt a graduated income tax while increasing exemptions and enact a modest across-the-board services tax.

Instead, we have the Michigan Business Tax and surcharge, on which senators have taken testimony across the state. Surprise! Only the disgruntled showed up as the Republicans expected, so they could issue the report they were ready to write all along: Dump the surcharge! And while we're at it, most of the MBT, because who needs a pesky $2 billion in the budget anyway?

It's time for a trip down memory lane.

Y'all wanted to dump the Single Business Tax, remember? The Legislature did your bidding. So when I hear those who lead the revolt like former Rep. Leon Drolet say the SBT was better and new taxes are just not faaaiiirr, forgive me for not sharing your crocodile tears.

The new MBT is a bit worse than the SBT and the surcharge is a disaster. But if your government has failed you, it's because your high-priced lobbyists have failed you. You could have ended up with slightly higher income taxes instead, but groups like the Michigan Chamber of Commerce screamed until the very end. So you got the reviled service tax, replaced by the nonsensical MBT surcharge.

I find it fascinating that when the service tax was passed, the Detroit Regional Chamber of Commerce quickly shrieked it would cost businesses a whopping $900 million to comply. Conservatives like Sen. Nancy Cassis, R-Novi, were outraged.

When the tax died 19 hours after being on the books, Cassis promptly introduced legislation to pay businesses back for their trouble. Only this time, she and the chamber claimed the $900 million was a wee bit overblown and wouldn't blow a big hole in the budget.

Talk about some fuzzy math. Makes it a lot harder to work up the sympathy for businesses claiming their tax bills have shot up 900 percent, because who really knows for sure.

Now no one wants to go back and take more tax votes to fix this mess. So a few Republicans will dutifully try to hack away at the heinous MBT, knowing that doesn't have a chance in hell of becoming law. Nobody wants to slash billions from the budget; it's just that the GOP tries to score political points off the idea.

"We've gone from tax-and-spend Democrats to tax-cut-and-spend Republicans," grimaces GOP former Senate Majority Leader Ken Sikkema.

Look, 40 percent of businesses didn't even pay the SBT, so naturally they'd lose by shifting to a tax paid by most. And while I don't doubt there are some businesses paying 900 percent more now (although I'm guessing all of my hate mailers will claim to), that's not the norm. Some businesses are doing quite well but are very quiet.

As Gov. Jennifer Granholm puts it: "They keep their head low and do the sign of the cross and say, 'Thank you very much.'''

It's mostly big manufacturers who will probably skedaddle to China in 10 years anyway. And no, that's not fair. But that's what happens when you buckle to interest groups and make tax policy on political grounds, instead of sound economics.

Life isn't fair. I would say it's not fair for people who put 35 years into a company to get axed so shareholders can make a bigger buck overseas, but such is life in the global economy.

Anyway, good luck getting your unemployment benefits extended. As any good conservative legislator will tell you, that would cost the budget too much money.

The ‘09 budget: Let them eat cake

Nobody can feel your pain like Jennifer Granholm and she was in fine form Tuesday night.

After last year’s rancor and recriminations over the budget crisis, the governor reemerged at the State of the State as the great healer, a pro-business prophet looking to lure development and lead us back to the promised land of no new taxes.

“People are angry,” Granholm said at the start of her speech. “…Let’s be honest, that anger is aimed at us.”

Though Michigan continues to careen down the road of recession, Granholm offered up her can-do oratory, promising tax breaks for businesses in fast-growing industries, help for those trapped in foreclosure agony and a slew of new programs.

Using her honeyed tone – part cheerleader, part Mother Earth – to full effect, the governor swayed some of her conservative critics (though not state Rep. Jack Hoogendyk, R-Kalamazoo, who in a flash of class, scrawled snarky blog posts during her speech).

Granholm imbibed the new designer drug of bipartisanship – something just about everyone in Lansing says they’re on, but they don’t get an hour to testify about it on tee-vee. You can’t beat that kind of PR.

But the real stroke of genius was that the governor cannily cut the legs from under the GOP’ election strategy – with a smile.

She beat the anti-tax drum hard – something a beaming Senate Majority Leader Mike Bishop called “borrowing the Republican playbook.”

But that effectively stole the thunder from House Minority Leader Craig DeRoche, who’s vowed to take back the majority by (what else?) hitting the Dems on taxes. He looked particularly sour Tuesday, but denied the guv had outfoxed him.

“It’s not an election line (for us),” the former Speaker sniffed. “It’s what we believe in.”

Granholm’s strategy started with a carefully placed Associated Press interview in December that grabbed headlines across the state.

“The most important thing I learned is I’m not ever going to raise taxes again. It’s too hard. It’s too impossible,” she declared.

She could say that with supreme confidence because budget estimates show Michigan will stay in the black this year (thanks to those evil tax hikes).

So it’s time to roll out the feel-good programs – high schools that work, alternative energy Centers of Excellence and more early childhood education.

You can have your cake and eat it, too. No higher taxes this year, just “creative financing.” (Something Republicans also found irresistible when they ran the show during the last two decades – beats cutting spending).

Granholm plans to scrounge up $550 million by refinancing debt, selling bonds and reinvesting part of the state pension fund.

Her economic stimulus plan – especially creating jobs through much-needed infrastructure projects – shows promise. But don’t expect a big boost to higher ed, the best long-range economic development tool Michigan has in its arsenal.

And there were key pieces missing from the puzzle, ostensibly to come in the far less glamorous budget unveiling next week.

Where are the cuts? Where are the reforms? You don’t need to be a rabid right-winger to know much more needs to be done.

Just take another read of the blue-ribbon, bipartisan Emergency Financial Panel report penned a year ago by 12 leaders with hundreds of years’ combined experience in budgets, business and government.

Or in the case of some esteemed lawmakers, try skimming over the scant 19 pages for the first time.

“I honestly don’t know how many people read it,” a glum former Gov. Jim Blanchard told me last week.

Well, it’s never too late to get religion or give a few of the 12 Apostles a jingle. I have it on good authority they’d love to hear from you.

The fact is, Michigan’s government is still engineered for the 1960s. We have a bloated Corrections budget growing far faster than revenues, as we incarcerate 50,000 people – and counting.

Health care costs for state employees and retirees are spiraling out of control. We have 1,242 townships, 553 school districts and millions of dollars in needlessly duplicated administrative costs.

That’s just a start. With the limited cash Michigan has, we need to spend it wisely.

Now the bad news. Don’t look now, but the Mitten State hasn’t licked its structural budget deficit.

We don’t tax services, the growing sector of our economy, thanks to a bizarre last-minute plan last fall that enraged the hypersensitive business community and poisoned the well. It remains to be seen what effect the Michigan Business Tax surcharge will have on attracting new capital. And our income tax is outmoded – a graduated rate with more exemptions is a better fit.

The good news is, we probably could restructure without hiking taxes and stave off future $2 billion budget shortfalls.

But that would mean bringing up the dreaded t-word again. And with that bodacious bipartisan vibe we’ve got going, who wants to be a major buzzkill?