Business Leaders for Michigan’s quarterly survey of 70 of Michigan’s most prominent executives indicates that Michigan will continue to lag the nation’s economic performance over the next eighteen months, but modest hiring in Michigan should begin to pick up in the next six months. The executives represent a cross-section of industries across Michigan and are in a unique position to assess the direction of the economy. 
Highlights of the survey include:

• Most Michigan companies expect to perform better than their sector competitors.
• Approximately 42% forecast increased hiring in Michigan in the next 6 months.  Eighty percent forecast flat or lower capital investment in Michigan during the same period.  Both are improvements from the last quarter.
• 89% believe Michigan’s economy will be the same or deteriorate over the next 6 months, about the same results as the 3rd quarter survey.  100% think the US economy will be the same or get better. 
• 64% think Michigan’s economy will be the same or continue to get worse 18 months from now, while 100% think the US economy will be the same or better.  The Michigan outlook is the same as the 3rd quarter survey.

For more about the survey, click here. 

Later this month, Business Leaders will release its 2010 Benchmarking Report.

One of the most talked about items on our 2010 Legislative Agenda is our tax reform proposal which would expand the sales tax to services (exempting business to business transactions as well as health care, education and housing), lower the overall sales tax rate from 6% to 5.5%, eliminate the MBT surcharge, and reduce the gross receipts rate from 0.8% to 0.45%.  The proposal would also exclude real estate commissions and other services that are already taxed to avoid double taxation. It’s important to note too that our tax reform proposal would be revenue neutral in FY 2010 and would provide a more stable and predictable tax structure for our state.

This proposal would move Michigan toward our goal of becoming more competitive and would send a strong message to the business community and investors that Michigan is serious about creating jobs.

The Grand Rapids Press endorsed our tax proposal. Click the hyperlink for their viewpoint.

Two weeks ago, we announced our 2010 Legislative Agenda, which reflects the first phase of legislation necessary to implement the Michigan Turnaround Plan. These policy items begin to implement the first three steps of the Michigan Turnaround Plan – seen as the building blocks for the investment and economic development strategies that follow. 

Some of these goals may take longer to achieve, but Business Leaders for Michigan is committed to getting the legislative and policymaking dialogue process underway now. 

With Michigan’s 2011 deficit at almost $2 billion and growing through 2014, we believe structural budget reforms, like some of the items in our Legislative Agenda as well as others, must be passed and implemented as soon as possible.  We recognize that some of the needed legislation will draw robust debate, but we must find solutions to these difficult issues if we want to see our state turnaround.  This agenda is a framework. We will support these and other proposed solutions that support the Michigan Turnaround Plan.

Michigan's jobless rate fell in November to 14.7 percent from its 15.1 percent level in October.  Total employment increased by 16,000 - the second consecutive month where total employment increased - while unemployment fell by 20,000, and the state's labor force dropped by 4,000 from October.  The decline was more pronounced in the Detroit area where the jobless rate fell by .9 percentage point to 16.4 percent.  The hardest-hit sectors for the month were transportation and utilities with 7,000 jobs lost, manufacturing (5,000), government (4,000), leisure and hospitality services (2,000) and construction (2,000).  Professional and business services saw jobs grow by 8,000.

We received another $200k appropriation from the federal government to launch the Detroit Creative Corridor Center this year. The Center will serve as the champion of the Road to Renaissance Creative Economy Initiative and will serve as a “hub” for the creative community by connecting creative businesses with business programs and services from around the region. This grant would not have been possible without the efforts of Congressman John Conyers, Congresswoman Carolyn Cheeks Kilpatrick, and Senators Debbie Stabenow and Carl Levin who all sponsored the bill. The funds will be used to help hire a director and fund the program for two to three years.

Unrestricted assets from the Lower Woodward Housing Fund, a fund established by Detroit Renaissance with support from the DEGC and several foundations 10 years ago has awarded the Downtown Detroit Partnership (DDP) and Detroit Economic Growth Corporation (DEGC) each with $1 million in funding over 3 years. The Lower Woodward Housing Fund was originally established to increase real estate development in the lower Woodward corridor. However, as the housing market has softened, it makes sense to re-deploy these funds in a way that is consistent with creating development downtown.  DDP will use the grant to fund their downtown marketing program. DECG will use it to fund continuation of the business attraction program started three years ago. Their grant will also be matched with funds from the DEGC, and the Hudson-Webber, and Kresge Foundations.

The Renaissance Venture Capital Fund is a Michigan-based fund of funds that supports the growth of venture capital in Michigan while serving as a bridge between Michigan’s emerging innovation company community and its strong industrial and commercial base. Through its investment in top tier venture firms that are active in Michigan, as well as its own co-investments in emerging Michigan companies, the Renaissance Venture Capital Fund is helping to drive forward both innovation and growth of emerging companies in the state. The fund had its first “hit” as one of the venture capital funds it invested in then invested in a company that got sold to Becton Dickinson. The payout will go to investors in the fund showing that you can actually make money investing in economic development.

Last week, Detroiters spoke loud and clear that they want change. All but four of the new city council members are newly elected. A new charter commission was elected and important proposals were passed which will have an impact on schools and allow council elections by districts. Mayor Bing will now have four years to see through some of the actions he began during the last 6 months to get the city back on track. Now that we are past these critical elections, we believe initial focus should be on ensuring sound fiscal management of the city, providing reliable City services , improving the perception and reality of public safety and maintaining a robust redevelopment strategy.

For better or worse, we now have a state budget in place for the 2010 fiscal year and we need to move forward.  As expected, projections are already coming in that the 2010 state budget will be anywhere from $700 million to $1.4 billion short.  And, the fiscal year 2011 budget process is already beginning and huge deficits are expected there as well. 

We have the same message for Lansing that we’ve had for the past several years:  “We must implement major structural budget reforms so we can get our financial house in order.  We must right size spending to match actual revenues.”  Businesses and nonprofits across the state have been making the tough decisions in order to ensure they can survive and ultimately grow again.  Our elected leaders need to do the same thing.

We see a future for our state that puts Michigan in the Top Ten for job growth again.  But before we can get there, we need to enact budget reforms; we need to overhaul our tax system; we need to prioritize how we spend state dollars and focus on things that will fuel our future economy like higher education, transportation infrastructure and supporting innovation and entrepreneurism. 

We stand ready to help and will defend elected leaders who make the tough calls.   These decisions are not easy and will surely take on invested interests.  Many people will feel the pain. But, if our state is to survive, we can no longer stall.  These decisions must be made now. 

Edward Deeb – Michigan Business & Professional Association/Michigan Food & Beverage Association President & CEO:

On behalf of our 3,400 members of the Michigan Food and Beverage Association, and the 21,000 members of the Michigan Business and Professional Association, mostly small and medium-sized businesses, we congratulate you on the formation of the Business leaders for Michigan organization. The Michigan Turnaround Plan is an outstanding blueprint, which not only unites business organizations statewide, but also will assure that the business community is represented in Lansing and Washington.

Since our basic objectives have been so similar to yours we at this time would like to endorse the program goals and action steps to help revitalize the State of Michigan. We, too, would like to see Michigan become a “top ten state” once again. This will help attract the kind of talent that we need to successfully assure the new growth and development of our communities. As the largest business association in Michigan we would like very much to become a player in your plans. We have been fighting for the rights and opportunities of small businesses for more than 47 years. Count on us.

Ron Weiser – Michigan Republic Party Chairman:

The Michigan Republic Party congratulates members of the new Business Leaders for Michigan who are taking bold steps to help Michigan…They have proposed innovative ideas that will put Michigan residents back to work. Many of these ideas have been Republican proposals in years past.

Like all things, this agenda needs careful review, but on the surface, it looks to address the structural change needed in our state while protecting hard-working families from an additional tax burden. I hope Lansing won’t be quick to judge this plan but will take time to carefully consider the various ideas, keeping their focus on what is in the best interest of the people of this state and not political gain.

Robert Ficano – Wayne County Executive:

Executive Ficano congratulates Detroit Renaissance on new name, new plan:  Detroit Renaissance has done a tremendous job representing the vision of the region’s top executive leaders. It takes visionaries and true leaders to make tough decisions and needed changes that reflect current situations and garner success in the future. I am sure there will not be 100% agreement on all proposals, but it is vital we work together to bring a better business climate to Michigan.

ASK YOUR LEGISLATORS TO ENDORSE THE PLAN