MACKINAC ISLAND - The Detroit Regional Chamber and Ford Motor Co. chairman Bill Ford sent a clear message to Lansing lawmakers Thursday: Approve a new business tax plan - and pronto.
The call to pass a plan already approved by House Democrats but stalled in the Republican state Senate sprouted from the three-day island conference where replacement of the Single Business Tax is a major theme.
Blue and white stickers proclaiming "Pass the MBT" began appearing on lapels Thursday afternoon, about the same time that Senate Majority Leader Mike Bishop, R-Rochester, told reporters that the House's Michigan Business Tax plan needed work.
Democrats like the House plan because it's a better deal for manufacturers, especially carmakers. Republicans prefer a plan that offers more incentive for small businesses.
Ford said the Democratic plan would create a more competitive tax structure for Michigan manufacturers, shift more of the tax burden to out-of-state companies that do business in Michigan and encourage research and development in the state.
"A good first step would be to pass the Michigan Business Tax plan now," said Ford to a standing-room-only crowd in the Theater at the Grand Hotel.
The Detroit Regional Chamber, which helped write the House plan, weighed in to support it. "We really feel the House approach is better," said Sarah Hubbard, spokeswoman for the chamber.
Democrats said Senate Republicans didn't want to give Gov. Jennifer Granholm a victory during the annual business conference. Bishop said it was Democrats who walked away from talks.
"They wanted to resolve this in time to come up to the island," Bishop said. "But it's not worth cobbling together a plan that doesn't work."
A bipartisan group of lawmakers has met seven times in private to reach a compromise on a new business tax.
Both sides have agreed that any new tax plan will fully replace the $1.9 billion in revenue that was generated by the SBT.
Sen. Nancy Cassis, R-Novi, chair of the Senate Finance Committee, was irked last week when state treasurer Robert Kleine said Detroit-based automakers would pay virtually no state business taxes under the House plan.
They still would pay sales and local property taxes, Kleine said.
Cassis, whose committee oversees tax issues, said that with Ford shutting down plants in Michigan and Ohio, GM building a new crossover vehicle in Tennessee and Chrysler being bought by private equity investors, "How much tax relief do you need? That isn't going to help Michigan re-employ people."
The main stumbling block is this: Democrats, including Granholm, want a tax on business profits and net worth. Senate Republicans want a tax on profits and gross receipts with exemptions for inventory and machinery.
House Speaker Andy Dillon, D-Redford Township, said four of five businesses would get a tax cut under the Democrats' plan.
"To say I'm shifting it onto small business, I don't buy it," he said.
Cassis said a tax on gross receipts would be more stable.
But the Senate gross receipts tax would be too complicated and unlike business taxes in other states, said Chuck Hadden, spokesman for the Michigan Manufacturers Association.
Gail Torreano, president of AT&T of Michigan, said her company is investing $620 million in new technology in the state in the next three years and would like to see a tax break for that.
"We operate in 22 states and we can put jobs anywhere," she said.
During a freewheeling Thursday evening forum featuring Bishop and Dillon, one business leader ripped state leaders for taking so long to complete a replacement for the Single Business Tax.
Mark Petroff, president and CEO of Bloomfield Hills-based Marketing Associates LLC, told the two men that DaimlerChrysler and Cerberus negotiated the sale of Chrysler to Cerberus in 30 days.
"You guys should be able to resolve this quicker than that," he said.
Copyright © 2007 Detroit Free Press Inc.
By Katleen Gray, Zachary Gorchow & Chris Christoff, Detroit Free Press Staff WritersIn your voice
