Monday, January 28, 2008

Municipal insult to state injury

A Detroit News editorial today reported that, ".. in the minds of 605 of the country's chief executives... Michigan was rated the third worst state to do business in."
"Overall, the message CEOs are sending is that over-taxed and over-regulated states are not conducive to the health of their businesses," said Ed Kopko, chief executive and publisher of the Chief Executive Group. Some leaders argue taxes and regulations don't matter much, but the executives who create jobs and locate factories disagree.
So if the state is viewed as over-taxing and over-regulating, how many more taxes and regulations should municipalities add? To be fair, they may need some new taxes to support essential government services for relocating businesses, like police, fire, and infrastructure improvements. But discretionary services with weak value propositions (like the DDA's desire for alley improvements, more flowers, more banners, and listing businesses in a directory) should be eliminated. And that includes taxes and regulations that already exist but if eliminated, might make Ferndale more attractive to business.

Honestly, I don't know how much time Ferndale leaders spend trying to attract out-of-state businesses to Ferndale. It is more likely Ferndale competes with other Michigan cities for businesses that have already come to reluctant terms with state and local governments' business-as-usual.

Quicken Loans' move from Livonia to Detroit was good for Detroit but not for Livonia. Compuware's move was another example of stealing from Peter to pay Paul, or stealing from Farmington Hills to pay Detroit. Like deck chairs on the Titanic, Quicken and Compuware were just moving around Michigan, but Pfizer and Volkswagon chose lifeboats outside the state--which is the ultimate measure of CEOs' estimation of Michigan's seaworthiness.

Lately, many people may have less respect for CEOs (Enron, Tyco, etc.) than they did 15 years ago, but ultimately CEOs, small business owners, and entrepreneurs are the ones that create jobs--not government. Perhaps if government focused more on getting out of businesses' way by repealing taxes and laws that are both burdensome and nuisances we might discover that less government begets more jobs.

Even without more jobs, less government may be its own reward.

1 comment:

  1. Form follows function... always has, always will.