Michigan Manufacturers Association About MMA The Michigan Manufacturers Association (MMA) is the state’s leading advocate exclusively devoted to promoting and maintaining a business climate favorable to industry. MMA’s goal is to make it possible for Michigan manufacturers to successfully compete in the national, and international, marketplace. Through effective representation of its membership before the legislative, executive and judicial branches of government on issues of importance to the manufacturing community, MMA works to foster a strong and expanding manufacturing base in Michigan. An elected Board of Directors oversees MMA’s business Established in 1902 as a voluntary membership association affairs (see complete board listing below). James M. Nicholson, and incorporated in 1923, MMA represents the interests and of PVS Chemicals, Inc., currently serves as chairman of the Board. needs of nearly 3,000 members, ranging from small manufacturing The Association and its for-profit subsidiary, the MMA companies to some of the world’s largest corporations. In fact, Service Corporation (MMASC), collectively employ 25 manufacturers who are members of MMA employ more full-time staff members. Charles E. “Chuck” Hadden serves than 90 percent of Michigan’s industrial workforce. as president and CEO of the MMA. MMA Board of Directors Officers Directors Chairman Cynthia A. Alt Timothy Knowlton Bryan R. Roosa James M. Nicholson Agapé Plastics, Inc Kellogg Company General Motors Public PVS Chemicals, Inc. Policy Center Thomas F. Catania Harry A. Lomason, II Vice-Chairman Whirlpool Corporation Lomason Investments Sharon J. Rothwell John G. Smith Masco Corporation ROSS Controls, Inc. Richard F. Dauch Richard A. Lund Acument Global Jedco, Inc. Richard F. Russell President and CEO Technologies, Inc. Amerisure Companies Chuck Hadden Ziad Ojakli Michigan Manufacturers Association David J. Dupre Ford Motor Company David H. Walborn The Dow Chemical Resource Recovery Executive Vice President and COO Company Peter J. Pestillo Corporation of West John J. Trobec Visteon Corporation Michigan (Ret.) Michigan Manufacturers Association David W. Joos (Ret.) CMS Energy and Peter S. Walters Treasurer Consumers Energy Guardian Industries Daniel R. Lockman Corp. Deloitte & Touche LLP Secretary and General Counsel MMA has represented the needs and interests of Duane L. Tarnacki Clark Hill PLC Michigan manufacturers for more than 100 years. We Can Build a Better Michigan Michigan’s economic policy has failed to attract and retain enough investment to bolster the state’s economy or support the current cost of state government. The challenges we face cannot be addressed with incremental steps. Michigan needs both dramatic structural spending and economic policy reform to create jobs and grow the Michigan economy. The fact that Michigan leads the nation in unemployment, and has for most of the last decade, demonstrates the state’s dire economic situation. According to the Bureau of Labor Statistics, Michigan has lost a total of 849,646 jobs since September of 2000. As the economy fails to attract investment, state revenues have plummeted, dropping by more than $2.8 billion, or 12.4 percent, between 2008 and 2009. The challenges presented by these staggering losses are daunting. Soon after the Legislature enacted a cut-based budget which reduced state spending by 10 percent for 2010 Michigan also needs dramatic economic policy reform to in November of 2009, Governor Granholm called on state end the cycle of disinvestment. We are putting forth this agencies to plan for 20 percent cuts in 2011. At about the agenda for Michigan to accomplish both goals and put same time, State Budget Director Emerson projected a $1.4 Michigan on the right track to job growth and prosperity. It billion dollar hole in the 2011 budget. will take courage and fortitude, but we are calling on Budget cuts, while necessary, are not fundamental reform. policymakers to join us in facing these challenges head on. To address the catastrophic decline in revenue, state government Together, we can build a better Michigan. must make dramatic fundamental structural spending reforms. Michigan needs to consolidate schools, consolidate local units of government, come in line with national averages for state employee wages and benefits and eliminate programs it Chuck Hadden can no longer afford to operate — especially those that MMA President and CEO exceed federal requirements and decrease the state’s ability to attract jobs and investment compared to other states. MMA Advocacy Team Chuck Hadden Mike Johnston Randy Gross Jennifer Spike President & CEO Vice President, Director, Environmental Director, Human 517-487-8550 Government Affairs & Regulatory Policy Resource Policy email@example.com 517-487-8554 517-487-8543 517-487-8530 firstname.lastname@example.org email@example.com firstname.lastname@example.org The MMA government affairs staff protects the needs and interests of industry by advocating pro-manufacturing policies with legislative and government officials. They represent the collective voice of the MMA membership in the fight against unnecessary and burdensome legislation and regulations to improve the business climate for manufacturers in Michigan. 2010 Structural and Economic Reform Agenda for Michigan 3 Structural Spending Reform Over the past few years, economic experts have advised policymakers about the ominous challenges facing the state and provided a variety of potential solutions. To date, the state’s staggering budget challenges have been met almost exclusively by budget cuts. MMA believes that it is now time to implement fundamental reforms to address the chronic structural deficit, improve competitiveness and streamline government. Specific Policy Reform Goals: There are no single silver bullets, because there are multiple • Pool all health care plans for public employees. barriers to cost reductions built into the structure of government. • Reform Public Act 312 to change arbitration standards for The continually increasing cost of government is embedded police and fire. in policies and structures that are no longer sustainable. We must fundamentally change the cost structures of local units of • Reform Urban Cooperation to eliminate the requirement that government and schools to consolidate service delivery when a service merger occurs, the higher wage and benefits systems and reduce costs. For example, school administrative must be paid, blocking savings in consolidation of local units. services should be done more by the Intermediate School • Require all new teachers hired by a date certain in the Districts rather than duplicated by schools. The Urban future to have defined contribution, rather than defined Cooperation Act shouldn’t create barriers to savings through benefit, retirement plans. consolidation. Local units shouldn’t be hindered from • Require school employees to pay 25 percent of their controlling costs in contract discussions for police and fire health insurance costs. services, and pooling public health care plans should be explored for cost savings. We must change policies that create • Move all administrative functions of local schools to the barriers to better control public employee compensation and Intermediate School District, reducing administrative benefits to available public revenues. We should not be duplication in the school service delivery system. spending more on the corrections system than we are spending • Incentivize the consolidation of school districts through on the higher education system. There are multitudes of the School Aid Fund. similar examples of structural barriers to cost savings in state • Privatize food service, mental health services and government. MMA is partnering with the business community transportation in prisons. and other interested organizations in providing not only options for reform to policymakers, but also our support in • Increase minimum retirement/years of service for all making the tough political decisions necessary to achieve cost public employees to be eligible for retirement benefits. reductions and structural spending reform. • Increase state employee and retiree health care premium co-pays. Thematically, throughout the 2010 MMA Legislative Agenda, we propose changes in policy that improve competitiveness • Eliminate duplication of the road patrol function of and streamline government. However, the following is a list of Michigan State Police and county sheriffs. possible structural cost reforms that MMA, along with a broad • Require that school districts competitively bid all non-core coalition from the business community, is calling on the functions, including transportation, food service and Legislature to pursue as a starting point for change: custodial work. • Require benchmarking analysis in all regulatory programs to • Reduce mandatory minimum sentences and increase compare performance to other states (as proposed in SB 439). parole rates for all crimes. • Require program efficiency studies in all government • Benchmark state employee compensation, setting a goal programs to eliminate waste. below the national average. • Establish an Office of Medicaid Inspector General to • Eliminate undocumented and potentially fraudulent child specifically investigate Medicaid fraud. care payments. 4 2010 Structural and Economic Reform Agenda for Michigan Economic Policy that Encourages Manufacturing Investment and Job Growth Our current state tax policy is completely backwards, taxing manufacturers disproportionately more than the consumer side of the economy — unlike most other states. To be competitive, Michigan’s tax policy must be reformed to reduce the effective tax rates on manufacturers to encourage industrial capital investment and the high job multiplier effects inherent in the manufacturing sector. Specific Policy Reform Goals: Eliminate All Personal Property Taxes surcharge itself, the Legislature also reduced the MBT We recognize that local units of government and schools credits that were designed to reduce the disproportionate depend upon revenue from property taxes. But we also burden the tax structure places on manufacturers and others know that Michigan’s personal property tax stands out as a making investments in Michigan. These credit reductions unique barrier to Michigan’s ability to attract and retain increased taxes on manufacturers by approximately $100 manufacturing investment and jobs as most states have million per year. In addition, the surcharge is applied long since eliminated this tax. As we work to rid Michigan without the benefit of credits to offset the cost of the of this outdated and uncompetitive tax, we are committed surcharge. Manufacturers who make significant investments to working with local governments and other stakeholders in Michigan were forced to not only pay the full surcharge, to find comprehensive solutions that define and address the they were also saddled with significant tax increases as a need for revenues to support essential local services. result of the credit reductions and limitations. Michigan’s personal property tax is a significant barrier to The MBT surcharge is a job killer. It must be eliminated, and credit attracting manufacturing investment in Michigan and should reductions restored, to lessen the tax burden on manufacturers. be eliminated. Reduce or Eliminate the Gross Receipts Tax Portion of MBT Support Economic Development Programs The gross receipts tax disproportionately taxes manufacturers Other states and countries are working aggressively to and should be changed or eliminated to allow Michigan to lure away Michigan’s substantial industrial assets. They attract manufacturing investment and jobs. Manufacturing, offer lucrative incentive packages that include upfront cash, by its nature, tends to require large capital investment, but land, facilities and job training. While some narrowly view yields relatively low margins. In addition, the gross receipts economic development efforts in terms of “tax expenditures,” tax tends to tax manufacturing activities relatively more than the revenue cost of not battling for jobs in this state is far greater other business sectors because there is no deduction for than the cost of essential incentives. Every manufacturing expenses such as labor, borrowing costs or expenses for the job lost to another state or nation takes its substantial use of intellectual property — all of which are significant for economic multiplier effect with it. Michigan cannot manufacturers. Placing relatively higher taxes on manufac- unilaterally disarm in the battle for industrial investment. turing makes it more expensive to produce products here on Michigan must maintain an aggressive and inherently accountable a comparative basis and, therefore, difficult to attract and economic development program with incentives that are at least retain future investment. equal to, if not better than, those of other states and other countries. The gross receipts tax must be changed or eliminated to make Michigan manufacturing costs competitive with other states Eliminate the MBT Surcharge and nations. To manufacturers in Michigan, the Michigan Business Tax (MBT) surcharge imposes more than just an additional 22 percent tax burden. Manufacturers were particularly hard-hit by enactment of the surcharge since, along with the 2010 Structural and Economic Reform Agenda for Michigan 5 Government Reform Becoming more economically competitive with other states and nations requires first measuring the factors that either drive or hinder economic growth. MMA believes the state should be run more like a business and that means working from performance-based data to set goals and measure progress toward those goals. State government must also institutionalize a system of benchmarking by putting it in statute. Specific Policy Reform Goals: Broad measures of output, like the unemployment rate, • Performance of state government indicate clearly that Michigan is not competing effectively ˏ Amount of regulation — including regulations that compared to competitor states and nations. But the state exceed federal standards must identify and track the underlying factors that drive investment and job creation in order to be successful in ˏ Permit issuance time for regulatory permits improving our competitiveness. ˏ Predictability of permit issuance ˏ License processing times While many organizations and economists publish benchmarking reports, Michigan must institutionalize a system of benchmarks • Several other factors also define that will direct administrative focus on the measures for the business climate, including: competitive success and on Michigan’s business climate for ˏ Transportation infrastructure manufacturers. The factors that should be considered include, ˏ Energy costs at a minimum: ˏ Real estate costs • The effective tax rate for manufacturers compared to other ˏ Support for R&D and talent attraction states, including both personal and real property taxes. ˏ Access to capital • Total business tax burdens on manufacturers, including: ˏ Availability of capital ˏ Personal property tax MMA calls on the Legislature to establish a system of measures ˏ Real property tax and benchmarks in statute that requires the state to compare its ˏ Business income tax performance to competitor states and nations. If we cannot measure our performance, we cannot identify ways to improve ˏ Gross receipts our performance. Establishing a statutory requirement for ˏ Corporate license taxes benchmarking performance will force a business style approach to making state government become economically competitive. ˏ Regulatory fees ˏ Other state and local taxes • The cost structure of government ˏ Average salaries and benefits of state employees ˏ Average salaries and benefits of teachers ˏ Percentage of prison inmates 120 percent beyond minimum sentence 6 2010 Structural and Economic Reform Agenda for Michigan Employment and Workforce Policy Labor costs, as well as an educated and highly skilled workforce, are important factors for succeeding in today’s global economy. Proposals to increase employment costs and statutory wage obligations jeopardize manufacturers’ ability to compete and discourage new investment in Michigan. Specific Policy Reform Goals: Block Cost Increases in Employer Financed Expand Choice in Education Unemployment Insurance Charter schools provide options to those trapped by local Michigan’s Unemployment Insurance (UI) System is 100 failing schools and creates new opportunities for technical percent employer-financed through payroll taxes, warranting training needed in modern manufacturing. Positive steps careful stewardship of its administration. Unemployment benefits were taken to turn around failing schools through recent are intended to be a temporary safety net for employees who education reform measures aimed at competing for federal find themselves without a job through no fault of their own. Race to the Top dollars. Included in these reforms was an MMA supports cost saving reforms that enhance the integrity of the increase in the number of high quality charter schools. UI system, such as prevention and identification of overpayments However, this expansion is limited to low performing districts. made due to fraud or mistake. MMA opposes expansion of MMA will work to ensure that choice is an option for all eligibility requirements, raising benefit levels and extending the children in Michigan through expansion of high quality period of eligibility, especially during tough economic times charter public schools statewide, rather than limiting choice when insolvency of our state Unemployment Trust Fund is an to under-performing school districts. increasingly serious problem. Reform Teacher Tenure Hold Workers’ Compensation Costs Down While gains were achieved in evaluating teacher performance While workers’ compensation provides important protection in the Race to the Top Legislation at the end of 2009, more for workers who are injured on the job, the program also needs to be done to ensure the most effective teachers are teaching represents a significant cost for Michigan employers and, our future manufacturing talent. therefore, must be managed both efficiently and effectively. MMA will push for improvements in the tenure law to Given the current economic climate, increasing workers’ ensure effective evaluation mechanisms and other tools are compensation costs would put manufacturers at a competitive in place, and used, to remove consistently poor performing disadvantage. and ineffective teachers. MMA adamantly opposes any effort to fund administration of the workers’ compensation program through new fees on employers. Oppose Federal Card Check Legislation The misnamed “Employee Free Choice Act” (EFCA) Promote Quality and Efficiency threatens our economic competitiveness by eliminating the Throughout the Educational System secret ballot for union representation. The legislation proposes Consolidation of school districts, privatization of non- to replace the time-honored secret ballot with a “card check” educational services, bulk purchasing cooperatives and better system. It would also allow a federal arbitrator to dictate the use of educational facilities as the center of community terms of labor contracts. activities are cost-saving measures that Michigan should MMA will continue its efforts to defeat the anti-competitive, consider implementing as part of the overall structural reform job-killing Employee Free Choice Act at the federal level, and effort. Returning Intermediate School Districts to their will urge the Michigan Legislature to continue to express its originally intended role of centralized administration would disapproval of the Act. save significant dollars by consolidating functions, without abandoning school mascots or hindering educational quality. MMA will advocate for educational reform efforts that promote efficient and effective use of tax dollars. 2010 Structural and Economic Reform Agenda for Michigan 7 Competitive Regulatory Reform Efficiency in the regulatory process is an essential component in attracting capital investment. If the process is not predictably expedient, then Michigan will be removed from the list of potential locations for investment. When regulations in Michigan exceed federal standards, the cost of operating in Michigan exceeds that of our competitors. We must endeavor to improve the efficiency of regulatory processes, increase certainty in the timing of the permit process and remove regulatory barriers to Michigan’s ability to compete on the basis of cost in the global economy. Specific Policy Reform Goals: Ensure New Regulations Do Not Exceed Federal Require All New Regulations to Meet Standards Without Specific Legislative Approval a Rigorous Cost–benefit Analysis Each time Michigan imposes regulatory standards in Administrative rules can impose billions of dollars in excess of federal standards, a new economic barrier to our costs on Michigan citizens and job providers, negatively competitiveness with other states is created. With the state’s affecting our state’s competitiveness in the global economy. economic vitality at stake, the Legislature must take an active MMA will fight for the requirement of a more detailed and role in thwarting such regulatory decisions for Michigan. dynamic calculation of economic cost implications for citizens Legislative authority delegated to agencies should be limited and job providers and an equally detailed and dynamic analysis to standards that do not create competitive disadvantages for of the economic and/or other benefits in the required Regulatory Michigan. Several states provide similar restrictions. Impact Statement for all new regulations. MMA advocates statutory changes that limit administrative Advocate for Benchmarking of State rule authority for regulatory agencies. Regulatory Program Performance Advocate for Efficiency Improvement In order to ensure that Michigan is competitive with Mechanisms in Regulatory Programs other states and the global economy, the state must be held In 2005, MMA participated in a detailed evaluation of the accountable for the performance of its regulatory programs. New Source Review program for the Air Quality Division of Manufacturers need certainty and predictability in the the Michigan Department of Environmental Quality (DEQ). permit process time frames to make rational investment With the cooperation of both the agency and industry partners, decisions in Michigan. and by using an efficiency review mechanism called Value MMA will continue to advocate that the state’s environmental Stream Mapping, the agency reduced permit review time programs should be reviewed and benchmarked against those frames by 66 percent. of other states, including permit issuance times, fees, cost of staff and the amount of regulation in Michigan. MMA will advocate for requiring every regulatory program, whether funded by the General Fund or fees, to implement an efficiency program to eliminate wasted effort and, ultimately, reduce the cost of operating and compliance with regulatory programs. 8 2010 Structural and Economic Reform Agenda for Michigan Require Environmental, Health and Safety mandatory standard is more effective than a voluntary one Standards to be Based on Sound Science such as exists at the federal level. In addition, MIOSHA Manufacturers deserve clarity in regulatory requirements, has failed to establish a “clear and convincing need” to go especially for rules dictating environmental, health and beyond current federal regulation. Adoption of the proposed safety standards. standard will position Michigan as only the second state to MMA will oppose all proposed regulations that are not do so, but with the dubious distinction of having the most objective, clear, measurable and based on sound science. burdensome regulation on the books. MMA will continue to oppose the ill-advised ergonomic standard Oppose the Use of Operational that will make Michigan less competitive in attracting job- Memoranda as Regulatory Tools creating investment. Operational memoranda or agency guidance documents are too often used as ad hoc rulemaking in regulatory Repeal the Annual Wastewater Report programs. While some guidance from regulatory agencies is This report symbolizes the excessive bureaucracy in helpful, when these tools impose regulatory requirements, Michigan’s regulatory climate compared to other states and the dictate regulatory standards or are used in enforcement need for the state to streamline its regulations. Duplicative actions, agencies exceed their statutory authority. reporting obligations do nothing to protect the environment. MMA will continue to object to the unconstrained use of MMA will continue to advocate for the repeal of the Annual operational memoranda by regulatory agencies, which can Wastewater Report because it fails to serve any substantive purpose. create regulatory uncertainty among entrepreneurial investors, and adversely impact Michigan’s business climate. Oppose Mandatory Ergonomic Standards Michigan-specific mandatory ergonomic rules are unnecessary and place an anti-competitive burden on Michigan job providers. There is no clear evidence that a 2010 Structural and Economic Reform Agenda for Michigan 9 Environmental and Energy Policy Reform Environmental requirements cost millions of dollars for job providers to implement. Michigan’s environmental and energy policies should be based upon sound science and reasoning. They need to be implemented objectively and designed to make Michigan more competitive with surrounding states and in the global economy. Our energy policies must ensure reliable power at economically competitive rates. The cost of electricity is a primary driver of cost competitiveness for manufacturers. Specific Policy Reform Goals: Protect Energy Plan Implementation Continue to Advocate for Revisions in the Part 201 Energy reliability and energy costs remain an integral Environmental Remediation Programs to Eliminate part of Michigan’s competitiveness. The Energy Package of Bureaucratic Barriers 2008 achieved fundamental improvements: security, cost of MMA has been actively advocating solutions to the service rates and retention of choice options for manufacturers. challenges faced by the DEQ in approving more closures As the complex statute is implemented, MMA will work to of contaminated sites. The current process is a clear barrier ensure the statutory policies of Michigan’s Energy Package are to economic and environmental progress for Michigan. maintained through the administrative implementation process. MMA stands ready and willing to continue to propose solutions to the Part 201 program that break down barriers and enable Support the Development of Base-load Power Generation public-private agreements that will attract new investment that A fundamental part of the Energy Act passed in 2008 will clean up contaminated property and increase the number was to promote the building of new coal plants to provide of approved closures in Michigan. base-load generation that increases the long term supply of reliable energy for Michigan. MMA will continue to push Support the Beneficial Reuse of Industrial By-products the Governor and the state to live up to the commitments The most effective environmental programs reduce waste made with passage of the Energy Act. by recycling products for beneficial use. Current law prohibits MMA will advocate for issuance of the required permits and the reuse of many materials as it defines by-products as waste, fight bureaucracy that stands in the way of development of prohibiting their reuse. reliable energy for Michigan’s manufacturing community. MMA will continue to seek statutory changes and revisions to administrative rules and agency policies that currently block Oppose Any Efforts to Exceed Federal the sensible reuse of industrial by-products. Climate Change Requirements Climate change is a global issue that must be addressed Advocate Returning More General Fund nationally, and in conjunction with the rest of the world. Support to Regulatory Programs Imposing significant regulatory costs on Michigan job In the last decade, General Fund support for DEQ programs providers through a statewide or regional approach creates a has dropped by $70.6 million. During that same period, competitive disadvantage for Michigan, while contributing regulatory fees have increased by $57.5 million, effectively shifting very little to the global solution. the program costs of the DEQ to the business community. MMA will oppose any state and/or regional regulations MMA will continue efforts to encourage more General Fund addressing climate change that exceed federal climate support for regulatory programs to eliminate the cost shifts to change requirements. manufacturers that negatively impact the cost of producing products in Michigan and decrease our ability to compete globally on the basis of cost. 10 2010 Structural and Economic Reform Agenda for Michigan Fight to Repeal DEQ’s Administrative Oppose Environmental Justice rule on Mercury Reductions Efforts that Affect Permitting The U.S. Environmental Protection Agency (EPA) Uncertainty in permitting creates an additional barrier continues to develop a more restrictive alternative to its to job creating investment in Michigan when compared to previously proposed Clean Air Mercury Rule in compliance other states. Environmental permitting programs should be with U.S. Court of Appeals actions, a case brought, in part, predictable, based on sound science and applied consistently by the State of Michigan. MMA testified extensively in throughout the state. Any process that relies on subjective opposition during the promulgation process. The DEQ decision making is bad for Michigan’s business climate. did not adequately identify the anticipated incremental MMA will fight any efforts put forth that impact environmental environmental benefits to be gained over the impending permitting under the guise of environmental justice. federal rule. The additional costs paid through electric bills not paid by other states make Michigan less competitive. MMA will seek repeal of the state-based mercury rule which represents a clear competitive disadvantage for Michigan by imposing regulations years before the EPA is expected to impose regulations on other states and in excess of what other states will likely be required to spend. Oppose Tax Increases on Manufacturers for Waste Disposal Waste is an item of commerce and represents both economic activity and much-needed state revenue. Manufacturers already recycle at a very high rate. This is why MMA believes they should not have to pay new waste disposal fees, on top of the disproportionate tax burdens that are already placed on manufacturers in Michigan, to fund residential recycling programs or to fund revenue shortfalls for local units of government. MMA will continue to oppose all efforts to impose waste disposal fees or to raise existing fees on Michigan companies to discourage importing out-of-state waste. 2010 Structural and Economic Reform Agenda for Michigan 11 Transportation and Infrastructure Reform The efficient transportation of goods is an essential component for a competitive economy. Allowing our transportation system to decline in quality, or not keep pace with the speed and logistics of the increasing pace of the global economy, will keep Michigan out of the game of global commerce. We must support our infrastructure and continue to seek out opportunities to be competitive globally. Specific Policy Reform Goals: Support Development of the Detroit Support Infrastructure Funding River International Crossing Adequate road and bridge infrastructure funding must The Detroit and Windsor connection is the busiest trade remain a priority for Michigan’s long-term economic success. corridor between the United States and Canada. The limited This infrastructure is necessary for the shipment of raw capacity of this single crossing currently hinders the speed of materials, parts and goods within the state and for routing delivery of both finished goods and part supplies for Michigan our exports. Without adequate matching funds, the MDOT manufacturers. The Michigan Department of Transportation will lose almost $600 million in federal aid beginning in (MDOT) and the Canadian government have agreed upon 2011, and $1.9 billion between 2011 and 2013. plans for the expansion of the Detroit River International MMA supports a comprehensive solution for longer term funding Crossing, known as DRIC. that includes fuel taxes, and a longer vision anticipating the MMA supports the efforts of the MDOT to pursue options for an electrification of automobiles, to secure adequate infrastructure additional bridge connection to Canada over the Detroit River. funding for the Michigan economy. Support Detroit Region Aerotropolis Michigan needs to build its transportation infrastructure to attract job creating investment. Increasing the speed of supplier parts or finished goods makes Michigan products more competitive in the global economy. The proposed Aerotropolis project would do both for the Detroit area and is projected to attract 64,000 jobs to the region. MMA supports the Detroit Regional Aerotropolis goal of making the Wayne Washtenaw corridor a strong economic engine for the region by developing an international hub for the transport of goods. 12 2010 Structural and Economic Reform Agenda for Michigan Health Care Cost Reform The soaring cost of providing health care presents an ominous challenge for manufacturers today. Cost containment strategies that reduce the existing burden, as well as control costs in the future, are a must in order for Michigan manufacturers to hire or retain workers and continue to provide health care benefits for them. Reigning in health care costs is instrumental to competing globally. Specific Policy Reform Goals: Oppose Mandated Employer-Funded Insurance Policies Oppose Specific Health Care Benefit Mandates The voluntary nature, flexibility and innovation of the MMA consistently voices strong opposition to specific current employer-based system should be preserved and health care coverage mandates not only because of the strengthened. Adding additional costs on employers to increased cost that every mandate imposes, but also our provide (or not to provide) insurance increases costs for strong belief that decisions regarding health insurance businesses and reduces Michigan manufacturers’ ability to coverage should be free of government interference and left compete on the basis of cost in the global economy. The goal between employers and employees as to what coverage is must be to reduce the cost of health care on job providers. needed and what they can best afford. MMA is opposed to an employer “pay or play” mandate which MMA will continue to oppose new mandated specific health would increase the cost of doing business in Michigan. care benefits which ultimately drive up the cost of employer sponsored health care. Protect Certificate of Need Process Overutilization is a significant cost driver in health care, Promote Wellness Incentives which has been shown in comparisons with other states Wellness programs promote and reward employees taking without Certificate of Need (CON) programs. personal responsibility for their own health and can save both MMA will continue to support a strong CON process to preserve lives and money. the savings it contributes to Michigan’s health care delivery system. MMA continues to support prevention and wellness programs for both public and private health plans. Combat Cost Shifting of the Uninsured Tax or fee increases on employers, directly or indirectly, are not viable remedies to cover the cost of the uninsured. MMA will continue the search for a solution to the constant problem of cost-shifting, from the uninsured to private sector policies, through promotion of meaningful and effective cost containment strategies. 2010 Structural and Economic Reform Agenda for Michigan 13 Protect Business Climate from Rising Litigation Costs The litigation climate is a critical component in defining the overall business climate. The National Association of Manufacturers reports that the American legal system costs the nation’s economy $865 billion annually. This is equivalent to a 5 percent “tort tax” on wages, or 2.2 percent of the Gross Domestic Product (GDP), and it is significantly higher than the costs of our largest trading partners and competitors. Michigan’s litigation climate remains a bright spot in our business climate, providing a competitive advantage for Michigan companies. Specific Policy Reform Goals: Protect Property Rights Maintain an Effective Amicus Curiae Program Property owners deserve to own property under the terms The MMA Lawyers committee has been a powerful voice and conditions in which they purchased the property. The in the court system, speaking for and protecting the rights of common law principals of public trust lay the foundation for manufacturers. protection of a property owner’s rights to access groundwater MMA will remain vigilant in its ongoing efforts to file amicus on their property. briefs in appellate court actions that would threaten Michigan’s MMA will oppose any legislative effort to amend the common business climate. law principals governing property rights. Protect Tort Reform Michigan’s legal protections for drugs produced in compliance with the rigorous approval process of the U.S. Food and Drug Administration must remain in place. Litigation costs drive up health care costs, and hinder the ability of Michigan’s manufacturers to compete on the basis of cost. MMA opposes efforts to erode Michigan’s current tort protections. 14 2010 Structural and Economic Reform Agenda for Michigan Importance of Manufacturing in Michigan Manufacturing is the backbone of the Michigan economy. We have a proud history of being a global manufacturing leader. And while changes in the global marketplace hit the manufacturing sector hard in the last decade, manufacturing remains a vital — and vitally important — industry. Why? Because when manufacturing thrives, so does the state of Michigan. Here are just a few reasons why manufacturing is so critical to our state: #1 1,694 153,700 Manufacturing is, by far, the largest Michigan has over 1,694 Tool and Michigan produced an average of sector of Michigan’s economy, Die shops — more than anywhere over 150 thousand vehicles per month contributing 21% of the state’s else in the world — employing 33,893 in 2008. Source: Michigan Economic Update, Gross State Product (GSP) — more skilled workers. Source: U.S. Bureau of Michigan Department of Treasury, 9/2009 than any other sector. (See chart below.) Labor Statistics, 2008 Source: U.S. Bureau of Labor Statistics, 2008 $61.8 billion 492,200 23.7% Michigan’s manufacturing output While Michigan manufacturing has was $61.8 billion in 2008. Source: Manufacturing provided almost U.S. Bureau of Economic Analysis, 2008 become increasingly more diversified, 500,000 direct jobs in 2009 and, auto production is still the largest of with the highest economic multiplier all manufacturing sectors at 23.7%. of any other industry, supports an estimated 3.7 million other jobs in Source: NAM Facts About Michigan 89% Manufacturing, 2008. the state. Source: Michigan Department Manufacturing’s share of total state of Labor and Economic Growth, Labor exports is 89%. Source: NAM Facts Market Information 11/2009 About Michigan Manufacturing, 2008. Michigan GSP by Sector Manufacturing is the largest Government, 10% sector of Michigan’s economy. Other services, except government, 2% Manufacturing, 21% Accommoda on and food services, 2% Arts, entertainment, and recrea on, 1% Health care and social assistance, 8% Agriculture, forestry, ﬁshing and hun ng, 3% Educa onal services, 1% Mining, 0% Administra ve and waste U li es, 2% services, 3% Construc on, 2% Management of companies and enterprises, 2% Wholesale trade, 6% Professional and technical services, 9% Retail trade, 8% Real estate and rental and Transporta on and leasing, 11% warehousing, 3% Finance and insurance, 6% Informa on, 4% MMA Policy Committees Representatives of MMA-member companies sit on the MMA Policy Committees. The committees meet regularly or as needed to review issues and developments in industry and to help develop public policy positions. Government Affairs Advisory Committee Energy Policy Committee Technology Policy Committee Staff Contact: Mike Johnston Staff Contact: Mike Johnston Staff Contact: Randy Gross Provides opportunities for input into policy Serves as a forum for exchanging information Explores opportunities for companies to direction for MMA on every major issue on energy utilization and potential industry effect policies that encourage investment in impacting manufacturers. Helps develop MMA’s strategies to ensure an adequate supply of new and advanced technologies in Michigan. Legislative Agenda. Also provides opportunities reliable power at economically competitive Issues addressed by this committee include to interact with state government officials. rates. Plays a vital role in developing MMA’s pharmaceutical, chemical, defense, automotive, Legislative Agenda as it relates to energy policy. telecommunication, power generation and many Tax Policy Committee Forms ad hoc sub-groups as needed to address other sectors. Staff Contact: Mike Johnston specific issues as they arise. Helps determine tax policy priorities for the Tool & Die Advisory Committee MMA Legislative Agenda and provides Human Resource Policy Committee Staff Contact: Mike Johnston opportunities for input into tax policy Staff Contact: Jennifer Spike Provides guidance and educational experiences development for the Legislature and the Serves as a forum to discuss and provide for members of the tool, die and mold-making Executive Branch. direction on a full array of legislative and community. Supports the collaboratives regulatory policy areas, including health created through the Tool and Die Recovery Air Policy Committee care, employment and labor issues, employee Zone Act. Staff Contact: Randy Gross safety and health related to MIOSHA and Actively monitors and participates in the workers’ compensation, as well as education Lawyers Committee development of legislative and regulatory air and workforce training issues. Subcommittees Staff Contact: Mike Johnston quality policy. Plays a vital role in developing focus on specific issues to ensure thorough Drives MMA’s amicus curiae program, MMA’s Legislative Agenda as it relates to air review by members with specific and taking an active role in major court cases policy and serves as a forum for members to specialized expertise. that may impact manufacturers. Ensures share ideas and thoughts on air related issues. that the manufacturing community’s Forms ad hoc sub-groups as needed to address Subcommittees: influential voice is heard in the judiciary specific issue as they arise. • Healthcare Subcommittee – Monitors branch. issues that impact employers’ health Environmental Policy Committee Staff Contact: Randy Gross care costs. Addresses all non-air related environmental • Employment and Labor Subcommittee – issues of concern to manufacturers. Members Addresses unemployment compensation, actively monitor water, solid waste, remediation wages and benefits. and other environmental regulations and participate in the development of legislative • Employee Safety & Health Subcom- and regulatory policy. Plays a vital role in mittee – Focuses on matters related to developing MMA’s Legislative Agenda as it MIOSHA standards and regulations as relates to environmental policy and serves as well as workers’ compensation. a forum for members to share ideas and • Education & Workforce Training thoughts on environmental issues. Forms Subcommittee – Addresses education ad hoc sub-groups as needed to address specific reform initiatives, workforce development, issues as they arise. job training and retraining.