“Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.” - Pericles
Whether you follow everything that happens at the Capitol or not, as a manufacturer you are uniquely impacted by the regulations and laws passed, or blocked, in Lansing.
Time is a finite resource and most every manufacturer can tell you there aren’t enough hours in the day to accomplish everything. While your company’s day-to-day growth should always be the top priority, your competitiveness can improve by having greater awareness of the changes occurring in state laws and regulations.
“Manufacturers are the primary taxpayers in most communities across Michigan and every law or regulation has the potential to either drive up costs or create new job opportunities,” says Mike Johnston, vice president of government affairs for the Michigan Manufacturers Association. “MMA advocates for manufacturers every day at the Capitol and raises member awareness of issues, risks and opportunities.”
The higher your costs, the more likely your business will be forced to make difficult choices regarding employee retention, health insurance coverage, new investments and brand expansion. Luckily, the MMA is here to do the heavy lifting. MMA is your voice at the Capitol and our accomplished team of lobbying professionals works each day to help manage your costs and make sure state government is responsive to your business needs — including the need to compete effectively in the global marketplace.
It is critical that you know what is happening, why it could affect your bottom line and how you can take appropriate action with reliable information.
The Clear-Cut, Manufacturing-Driven Victory
“MMA is proud to take the leading role on issues where manufacturing’s competitiveness is the top priority,” says Johnston. “The elimination of the state’s Personal Property Tax is a prime example.”
For decades, manufacturers faced an unfair double tax on personal property. A Michigan manufacturer would pay taxes annually on equipment purchased five, ten or even fifty years earlier. This annual tax, unique to Michigan compared to most other states, reduced competitiveness and placed an unnecessary burden on businesses. Having heard from members over many years, MMA led the multi-year effort to eliminate this competitive disadvantage. Beginning with a legislative effort in 2011 and culminating with a successful 2014 statewide ballot campaign which resulted in 69% support from voters, MMA delivered on its promise — eliminating the tax and saving Michigan manufacturers $576 million annually.
“MMA continues to advocate for manufacturers, working in 2016 to push back statutory filing deadlines so that as many companies as possible could take advantage of the huge tax cut,” says Johnston. “Thanks to those efforts, another 600 parcels became exempt and 11,122 total parcels qualified for exemption in the tax cut’s first year.”
Manufacturers aren’t just taxpayers in communities, they also have a political footprint. Employing anywhere from dozens to thousands of people, every manufacturing employee can influence family members, friends and neighbors to vote to elect pro-manufacturing candidates who can promote the realities of manufacturing careers once they take office. By working together and speaking with one voice, manufacturers can have a significant impact on state policy.
Staying Vocal, Working Together
In 2011, as part of his first months in office, Governor Snyder created the Michigan Office of Regulatory Reinvention (ORR). Bringing MMA together with other groups, the ORR set about eliminating the unnecessary rules and regulations that clogged up Michigan’s regulatory process.
“So far, the state has eliminated 2,127 rules and implemented over 150 recommendations from various specific review committees,” says Such. “Bringing interested parties together to solve a common issue, Michigan’s economy is better situated to compete with other states and with countries around the world.”
MMA also works closely with state agencies on an issue-by-issue basis to reduce the costs facing manufacturers and keep employers aware of issues that could challenge their ability to create jobs. The Department of Environmental Quality (DEQ) and the Unemployment Insurance Agency (UIA) are two such state agencies.
MMA led a two-year effort with DEQ stakeholder workgroups to pass legislation eliminating the Liquid Industrial Waste (LIW) manifest requirement. This legacy activity added no environmental benefit and served only as unnecessary administrative red-tape for Michigan companies.
“Senate Bills 400-402 eliminated the LIW manifest because it duplicated the information already contained in the bill of lading prepared by the companies and the transporters shipping this material,” says Such. “The elimination of these manifests was part of our effort with the ORR to eliminate unnecessary and burdensome regulations.”
MMA also worked with the UIA and its parent department, the Talent Investment Agency, to improve the flawed and time-consuming process that many manufacturers had to endure this year to respond to “20(a) Determinations” — a new process putting many members at risk of substantial penalties resulting from an undefined and chaotic administrative process. While working to improve the process, MMA aided several individual members who were unfairly penalized, saving them money and keeping them competitive.
Big Victories Made Up of Many Small Steps
“Advocacy rarely follows a straight path — the road often looks more like a roller coaster, with ups and downs and unexpected challenges,” says Delaney McKinley, MMA director of human resource policy and membership development. “A winning lobbying effort usually is made up of a number of smaller victories leading to the larger achievement of our members’ ultimate goal.”
One such effort that continues to have its share of ups and downs is MMA’s effort to eliminate the annual $330 million Health Insurance Claims Assessment (HICA) tax imposed on Michigan employers — falling hardest on industries like manufacturing that employ large numbers of people.
The process began in January 2011 with the federal government informing Michigan that the Medicaid MCO Use Tax model would be disallowed, necessitating the creation of HICA in September 2011 to continue funding the state’s Medicaid program. In its history, HICA routinely fell short of revenue expectations, resulting in numerous attempts to increase the tax rate.
“MMA successfully reduced the tax rate in 2014 by 25 percent and accelerated the elimination of the HICA tax,” says McKinley. “In 2016, we turned our sights to fully eliminating the HICA tax by 2017. We gained substantial support, passing a legislative package in both the House and Senate with wide margins and bi-partisan support.
Unfortunately, Governor Snyder vetoed the bills citing concerns about whether the federal government would approve of our plan.”
Too often, only the final result gains headlines, when it is the long journey that most impacts manufacturers’ daily business decisions.
“The fight to eliminate the HICA tax is not over,” says McKinley. “The strong support we’ve had among legislators for a HICA repeal gives us hope for a full repeal in the near future.”
By being engaged with MMA, and participating in the processes, your business can be more competitive and better prepared for the unexpected, while staying informed of the many steps which lead to legislative victories for manufacturing.
Blocked Legislation— The Wins You Don’t Hear About
“In lobbying, the best offense is often a great defense,” says McKinley. “There are 2,976 registered lobbyists in Michigan and most of them work in conflict with the interests of manufacturers. This means that MMA’s ability to block legislation or lessen the impact of a regulation is critical for our members.”
In recent years, MMA has battled legislation that would drive up costs and burden manufacturers’ ability to do business. Whether it is a proposed mandate on certain delivery mechanisms for chemotherapy treatments, or limiting the ability to appeal your property taxes, or consistent efforts to eliminate economic growth incentives, MMA is often working behind the scenes to remove provisions that could negatively impact the manufacturing industry or ensure the most damaging of legislation never receives a vote in the first place.
“Sometimes when it looks like nothing is happening, a lot is actually occurring beneath the surface,” says Johnston.
Choose Your Level of Participation
Participation is essential to any lobbying effort. MMA’s Government Affairs team is most effective when it receives information from manufacturing’s front lines — you, the MMA member. Your input and feedback helps make sure we’re working on the issues most important to your bottom line.
Your level of involvement may be based on the unique needs of your business. Committee members can connect with fellow members to share insight on issues they face, assist in drafting language for future legislation, reaching out to local elected officials, and more.
The best way to get involved is to get on the mailing list for any one or all of the nine MMA Policy Committees and then determine your level of involvement.
The current committees available to members are:
- Air Policy
- Employment & Workforce Policy
- Energy Policy
- Environmental Policy
- Government Affairs
- Health Care Policy
- Lawyers Committee (fees may apply)
- Mining & Natural Resource Industry Policy
- Tax Policy
There is no limit on the number of committees you may join, so make sure your appropriate staff representative is at the table working with MMA on behalf of your business. The more you get involved, the greater influence you can have and the more successful your business can be.
Reach out to MMA’s Government Affairs team for more information and to join the Committee(s) that match your company’s priorities.