Stephen Henderson: CEOs like climate change in Snyder tax plan — the business climate, that is

“…all four of the CEOs supported a second crossing for the Detroit River into Canada. Krueger, in fact, called in a “no-brainer.”

BY STEPHEN HENDERSON
DETROIT FREE PRESS EDITORIAL PAGE EDITOR

Making Michigan more competitive in the national and global races for economic expansion projects was very much on the minds of four CEOs on a panel I moderated during Monday’s Business Leaders for Michigan summit in Lansing.

I got some pretty eye-opening answers to questions about Gov. Rick Snyder’s tax plan and about what makes other states and countries more attractive than Michigan for investment dollars.

Of the four CEOs, only one, Cynthia Pasky of Strategic Staffing Solutions in Detroit, said the governor’s tax reforms would result in a direct financial benefit for her company.
Domino’s Pizza CEO J. Patrick Doyle said state taxes actually could go up for his Ann Arbor-based company. Blake Krueger, CEO of Wolverine World Wide (Rockford-based maker of a diverse line of casual and work-related footwear) said his company’s taxes would certainly go up.

Charles (Chip) McClure of Troy-based Meritor (an axle company that supplies truck, bus and defense equipment manufacturers) said his company’s state taxes would be at best a wash but might go up.

Yet all four leaders also said they supported the Snyder tax changes.

Why?

Pasky said that beyond the potential bottom-line benefit to her business, the new scheme is the first to treat her the same as other companies. Her business was never going to be the “it” thing for which a governor might design incentives or tax credits, she said. And it isn’t big enough to attract singular attention from Lansing.

So doing away with most credits and incentives and instituting Snyder’s flat tax on profits actually puts Pasky’s business on a level playing field for the first time.

The other CEOs, though, said they supported the tax plan because it would help bring stability to the state, and predictability in business tax liabilities. And they all believed the break for smaller businesses would help make the overall business climate better, which in turn would help their businesses.

The CEOs’ reaction tracks with Snyder’s own description of his tax plan: that it was targeted toward small and mid-sized businesses, the companies that he sees as having the greatest potential to revitalize the state’s economy.

But it was fascinating to hear three CEOs of very big corporations say they supported the plan, even though it wouldn’t help their bottom lines.

I also asked the business leaders if there was one thing they were seeing in other states or countries that they wished we had here in Michigan.

Interestingly, not one of them said a word about lower taxes.

Doyle, of Domino’s, talked about the growth his company is experiencing in India. It’s being fueled, he said, by the rate and volume at which the country is producing college graduates with the right skill sets to help manage and grow the business.

He said Domino’s can just plug them right in, with no additional training.

Wolverine’s Krueger echoed that view and said there is a race for talent in every market, and that businesses will go where they can find it.

Both Krueger and Doyle said education was an obvious key to boosting that talent pool in Michigan.

McClure, of Meritor, told a story about a community in North Carolina, where his company was able to work with several municipalities in two different counties to consolidate its facilities; the result was less of a footprint but has resulted in more jobs for the entire region. It took a lot of cooperation to get everyone to see the advantages, he said.

Pasky, of Strategic Staffing Solutions, talked about the infrastructure advantage Michigan has with Detroit Metro Airport, but said that needs to be expanded to include better transit infrastructure in other areas.

Along those lines, all four of the CEOs supported a second crossing for the Detroit River into Canada. Krueger, in fact, called in a “no-brainer.”