Business Leaders for Michigan backs earned income tax credit, reformed term limits
Business Leaders for Michigan is voicing support for reformed term limits and increasing the earned income tax credit in its new strategy seeking to position Michigan as a top 10 state.
The "Compete to Win" plan identifies a number of priorities the state's business roundtable has identified as areas of improvement to help Michigan grow its economy and become a place where more people want to do business. It's ranked at No. 29, according to the group's benchmarking study released earlier this year. The recommendations include efforts around education to removing barriers to enter the workforce to improving infrastructure. The report seeks to influence campaign-trail discussions.
The organization's board also has voted to support a ballot initiative Michigan voters will consider on Nov. 8 that would amend the state’s constitution by reforming term limits for lawmakers and increasing financial disclosure requirements in Lansing.
Legislators currently can serve three two-year terms in the state House and two four-year terms in the Senate, a cap imposed to limit the influence of lobbyists and special interests. The new proposal would limit the time of service to 12 years between the two chambers, but allow that time to be spent in a single chamber if desired. So a lawmaker could serve up to six terms in the House or three terms in the Senate or a mixture of terms between the two chambers adding up to 12 years.
"What we've seen is that the most restrictive term limits that we have in Michigan, the most restrictive in the country, has led to a breakdown in civility, relationships, the ability to think strategically over the long term," said Jeff Donofrio, CEO of Bisiness Leaders for Michigan. "If you have a new speaker of the house every two years or a new chair of the education committee every two years, and they maybe have had two to four years experience at best.
"It's challenging to both have that depth of knowledge around these issues and the institutional memory about why things happened or didn't. And so, it hasn't led to consistent policy or consistent approach to solving big problems."
That showed in Michigan's unpreparedness, Donofrio said, for projects like Ford Motor Co.'s $11.4 billion investment for electric vehicle and battery production in Tennessee and Kentucky, which will create 11,000 jobs.
"We weren't prepared on having competitive incentives," he said. "We weren't prepared on site development. We weren't prepared in meeting the talent solutions across the state."
Michigan has one of the lowest labor force participation rates in the country and one of the lowest growth rates in participation, according to the roundtable's benchmark study. The strategy suggests looking at ways the state can help to address child care needs, access licensing and return ex-offenders to the workplace. The group's recent survey of Michigan CEOs showed 87% believe they will have challenges with hiring in the next six to 12 months.
"They believe that because of two things," Donofrio said. "One is a skill gap, but also an availability of talent. They're just not getting enough applicants."
A suggestion to help incentivize workforce participation is increasing the earned income tax credit. Business Leaders for Michigan is supporting a boost, though it didn't provide a specific amount.
Both Gov. Gretchen Whitmer and Republican state lawmakers are proposing increases to the tax credit as a part of dueling plans on how to handle an expected revenue surplus of $6 billion.
Whitmer proposes an increase to the earned income tax credit for mostly lower-income workers as a part of her proposal to send $500 rebates to residents. Meanwhile, the wide-ranging $2.6 billion tax cut proposal passed on Thursday by the House and Senate would hike the earned income tax credit to 20% from 6%.
"It's a tax credit that is given to working parents and working families that are engaged in the economy," Donofrio said. "It's something that that helps families close that bridge the gap in terms of having a family-sustaining wages, but also helping encourage work."
Business Leaders for Michigan also supports efforts to attract teachers, including a fellowship program included in a proposed budget, and using federal and state surplus dollars to invest in classrooms and address performance gaps that have been exacerbated by the COVID-19 pandemic.
"This is really a moment in time," Donofrio said, "where we have to look at what is going to make Michigan competitive, what is going to help individuals and families prosper over the next 10 or 20 years in ways that we haven't been able to achieve."