Where’s the urgency to replace the SBT?

Where’s the urgency, or batter yet, where is the Michigan Legislature?

As you know, Last Wednesday the House and Senate voted to blow a $2 billon hole in the state budget with the repel of the Single Business Tax two years ahead of schedule. It did so without a replacement. Just hours after it was approved we saw the consequences of that rash action when Standard & Poor's announced it was giving Michigan a negative outlook on its credit rating, making any business take pause before locating here because of the uncertainty of how the tax structure will be rewritten thereby deterring any business investment and relocation to Michigan.

But Chris Ward’s response was House Bill 6272 he introduced on June 27 that would replace the SBT. The act would be called the “The business activities licensing fee act,” but we know very little about it beyond that.

The bill was introduced the last week of sessions before the summer break, and it was referred to the Tax Policy Committee. There has been no report of the economic effects or the pros and cons by the nonpartisan House Fiscal Agency or the Legislative Services Bureau (LSB). These are composed of full-time employees who work all year, five day a week. Where’s the urgency to find a replacement for the lost revenue?

During the summer, the Legislature only meets once a week on Wednesdays, as compared to three days a week during the rest of the year. Although they are on the schedule as session days, they are usually canceled, and they have only met a couple of times since June; like when it put the cart before the horse and repelled the SBT last week.

When regular sessions resume on Sept. 5, there are only nine scheduled session days left before the election, and only 16 session days left before a new Legislature is seated. Do you really think something as complex as replacing the SBT will be accomplished in that timeframe. This is typical of the legislature and its leadership passing the problems on to someone else to solve while taking the credit for cutting taxes.

The bill has been sent to the tax policy committee, and a look at their agenda shows they have 198 bills to consider. If you go by their track record of dealing with bills, it will take them more than four years to get to this bill if no other bills are referred to them in the next four years.

The complex SBT was enacted in 1976 under a Republican governor, and it replaced seven separate business taxes, including the corporate income tax. During the 30 years the SBT has been in existence, Republican governors have been in charge 18 of those years, yet not one chose to eliminate it. Only the current governor got the ball rolling, but she had a realistic timetable and wanted a replacement first. That’s only commons sense.

One thing we can be assured of is that Ward will use his introduction of HB 6272 as the answer to the SBT on the campaign trail when there is little chance it will be passed, we don’t know how much money it will raise, we don’t know what businesses it will hurt and which ones will be held harmless and if fact we know very little about it.

Where’s the urgency?