RICHARD SCHMIDT: What should government’s role be in economic development?

EDITOR’S NOTE: This is the part of a monthly series called “A difference of opinion…” that will pose a question or topic chosen by managing editor Michelle Graves with responses presented by members of the Manistee County Republican and Democratic parties. The author is chosen by the respective party and may change from month to month. Columns will be published on the last week of each month. 

This month’s topic is economic development. Writers were asked to respond to the following: Finding ways to attract more businesses to the City of Manistee and Manistee County as a whole has been a struggle for several years. From the Alliance for Economic Success, to the Manistee Area Chamber of Commerce to the Manistee Downtown Development Authority, many organizations have their hand in economic development. What do you feel is the best way to move the area forward in attracting and retaining new businesses? Should tax benefits continue to be offered to big developers in order to attract them?

By RICHARD SCHMIDT
Guest Columnist

What can we do to attract and retain businesses in Manistee County? For the past eight years Manistee County has spent in excess of over $900,000 for economic development with the hiring of the Alliance for Economic Success (AES) to provide the leadership in economic development.

Did they get their money’s worth? Because there was no accountability in most of those years it is hard to determine, but we will note that the county did terminate their contract with AES in 2018. If you add in what the city and the Downtown Development Authority (DDA) have spent, most likely more than a million dollars has been spent on economic development in our county.

Maybe we should ask first, what should the government’s role be in attracting new businesses to our city and county? I believe that city/county governments need to create an environment that encourages businesses to invest in their communities. They can accomplish this by ensuring that provisions of the zoning codes incentivize economic growth, eliminating burdensome rules and long drawn out review processes for permits. Unnecessary regulations can impede new businesses and cause them to locate in a community that is more business friendly.

Property tax rates and utility rates need to be competitive and comparable to other communities in the area. All businesses need to keep their expenses in check and if utility rates in our city/county are higher than competing communities that could very well be a deciding factor for a business to locate elsewhere. Governments need to be mindful that high property taxes and high utilities rates are burdens on businesses as well as workers, families and an aging population. The city and county need to run their entities both effectively and efficiently.

The city/county should tap into its own personnel who have the knowledge base before hiring another economic development firm. The county has one of the best planners in Michigan. Let’s use our own resources. I believe that we could create our own economic development team that would collect and compile the data needed to attract and retain businesses.

Data needed includes: available housing, cost of housing, number of available workers in county, daycare information and evaluation of educational opportunities for K-12 education, trade schools and colleges. Also what available infrastructures services are available including: water, electric and broadband internet service. The city/county should review zoning for commercial, residential and agricultural use. Other sources of needed information are available from Networks Northwest, USDA – Rural Economic Development, 211, and financial resources from the planning department including Brownfield Development for loans and grants.

According to a 2018 study done by Northwood University for the Michigan Chamber of Commerce, Michigan has a favorable business tax climate and an improving regulatory environment which is also attractive to new and existing businesses. Per the study, “There is no doubt that Michigan is continuing on the comeback path but has not yet arrived.” “It is therefore incumbent on Michigan’s lawmakers to stoke that spirit with a pro-business, tax-friendly environment where free-market instincts can soar high to regain Michigan’s former glory.”

My concern now is that Gov. Gretchen Whitmer is proposing a tax increase of 45 cents on gas and a 40 percent tax increase on small businesses.

Living in a rural area where we are all dependent on our vehicles to get to work, an increase in gas prices is going to adversely affect employees and businesses. It is going to cost businesses more to get their inventory/materials to their plants and it is going to cost their employees more to get to work. A tax increase of 40 percent on small businesses will severely limit prospective entrepreneurs from not only coming to Manistee but from coming to Michigan. So our city and county leaders should encourage our state lawmakers to vote against this increase of our taxes. They need to continue to make Michigan a business friendly environment.

Should tax benefits continue to be offered to big developers in order to attract them?

If the government does everything in their power to make Manistee city and county an environment where businesses have fair and comparable property tax rates, fair or low utilities rates, an educated work force and reasonable housing then there should be no need for tax abatements. The government should not be picking winners and losers. It is not fair to businesses that have been in our community for years and paying taxes to compete against new businesses getting reduced taxes rates.

Manistee is one of the most beautiful counties in Michigan and has many assets that can be marketed to prospective developers and businesses. Who knows that better than those who live here?

Richard Schmidt is the Manistee County Commissioner for District 2. He can be reached at rschmidt51@hotmail.com. Find out more about the Manistee County Republicans by searching “Manistee County Republican Party” on Facebook.

 

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