Friday, September 28, 2007

Partisanship hurts Michigan economy -- both sides in tax debate agree

(cross-posted at Michigan Messenger)

Activists and experts with differing views on taxes agree on one thing: Lansing partisanship hurts Michigan's economic prospects.

Rose Bogaert, chair of the Wayne County Taxpayers Association, has been fighting tax increases in Michigan for 30 years and believes strongly in her cause. "We are way behind other states in terms of economic development partially because we're unable to change things in Lansing. I don't care -- Democrat or Republican -- we need to do something to bring about change in this state," she said.

Some experts believe that bipartisan tax policy -- even if it involves a tax increase -- attracts business because it has more staying power."If you have decisions made on a bipartisan basis, chances are they will be more durable over time and you'll know what the ground rules are for investing in the state over the long term," said Paul Hillegonds, who served as president of non-profit Detroit Renaissance from 1997-2005.

"To the extent that policy is partisan and swings back and forth as the partisan winds change, economic development becomes less predictable. That makes a state very unattractive," said Hillegonds. "In the end, economic development is not a partisan issue."

A number of regional economic development organizations pursue their work without involving state government. "These are bipartisan efforts that include business trying to come to grips with this transformational economy," said David Hollister, executive director of Prima Civitas, a non-profit economic development organization. "They are trying to find ways to wrestle with it outside of the political process."

Prima Civitas works to build collaboration among disparate community groups. Hollister said, "The whole idea is stewardship -- putting the interest of the community first and building collaborations."

"There are so many pieces and it's all based on enhancing the general good and doing it without the legislature. We try to keep them informed, but as far as our strategy it's just not even in the equation," Hollister said.

To be sure, the two sides still differ over taxes. Tax foes argue that higher taxes drive away new business; economic development experts contend that increasing taxes will attract new business investment.

Bogaert and other anti-tax activists believe new taxes enable government waste and that the burden on taxpayers is high enough. They are frustrated and concerned that economically stressed people may face a higher tax burden.

Economic development experts say investment in public infrastructure and talent requires new revenues. "No one is going to invest in a state that does not invest in itself-no one. It's impossible to invest in talent with a cuts-only approach to finances," said Bill Rustem, president and CEO of Public Sector Consultants.

Still, the two sides do agree that the continued political bickering hurts the economy.