LANSING, MI – “Headwinds” and “tailwinds.”
That’s how Mike Johnston of the Michigan Manufacturing Association (MMA) sums up life for businesses after a year under liberal trifecta control.
Republicans are generally considered more friendly to businesses, but 2023 – the first year in the past four decades with Democrats leading the legislature – saw some successes along with the drawbacks. 2024 is shaping up to be a similar mix.
“The majority of the calls I get are ‘I’m still concerned,’” Johnston, MMA’s executive vice president of government affairs, told reporters Wednesday in a roundtable with organization leadership.
Manufacturing is Michigan’s heartbeat industry, accounting for more than 600,000 jobs, 15% of the workforce and 20% of gross domestic product.
“It is essential to the wealth of our state,” said MMA president and CEO John Walsh, and other states and nations want to “ween away” these jobs.
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That’s why business policy is a recurring topic in Lansing. After 2023 focused much on civil rights, economic development will be a focus of 2024, legislative leaders have said. Manufacturers want to stay competitive with other states, capitalize on emerging sectors – like electric vehicles – and attract and retain investments and jobs.
The MMA was pleased to see $55 million in this year’s state budget for the Going PRO Talent Fund, which helps employers train, upskill and retain employees. There is also more money for Michigan Reconnect, which pays tuition for people pursuing an associate degree or skills certificate at their local community college.
Broadly, the MMA is aligned with Democrats on prioritizing job retention and investment, especially via the SOAR fund, which doles out hundreds of millions to attract new business and thus increase population.
“People follow jobs,” Johnston said.
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But the MMA was disheartened by other major policies. Democrats repealed Michigan’s right-to-work law – which allowed workers to choose not to join their workplace’s union – and they passed a 100% clean energy target by 2040 that businesses worry will hike their utility bills.
One MMA member, Johnston said, is considering moving to Mississippi, which told that company it can save $600,000 in energy costs by moving south.
Manufacturers are also concerned about how quickly Democrats moved on priorities, Walsh said. MMA members, which tend to be smaller businesses, are still committed to their communities but don’t like the “rapidity” of change from Lansing.
“Business loves stability, and they’re a little shellshocked,” Walsh said.
In next year’s state budget, which is completed in June, manufacturers are hoping for more Going PRO money and are looking forward to lawmakers advancing a research and development tax credit, something Michigan is one of 14 states without.
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Legislation passed the House that applies this tax credit to big and small companies and to existing and new investment. Advocates see it as a gamechanger in attracting out-of-state investment.
“Innovation is the engine of economic growth,” Johnston said.
He added that streamlining the tax code and permitting process are other things the MMA is hoping for, along with reducing companies’ tax and regulatory burdens overall.
Among the MMA’s biggest concerns for 2024 are Gov. Gretchen Whitmer’s promise of paid family and medical leave, plus legislation to require companies that own polluted land to pay for cleanup.
One upcoming wrinkle is that the House – normally a two-seat Democratic majority – will be tied at 54 seats apiece until at least April, when special elections are held in two liberal-leaning districts to replace a couple Democrats who resigned to become mayors.
Related: Whitmer sets special election dates to resolve tie in Michigan House
Despite the gridlock, MMA leadership said, manufacturing is an ideal sector for bipartisanship, and advocates can work with any legislators in any political climate who want to support these jobs.
“We’re not partisan, we’re not throwing bombs at either party,” Walsh said. “We’re looking for solutions that are good for the economy and make us competitive.”
