Genetski: Three fixes for Michigan's economy

So the Michigan economy is broken. Robert Genetski was preaching to the choir: The hundreds of Michigan business executives in the audience this morning already know that. But what to do about it? That's where Genetski, a classical economist and member of conservative think-tank Heartland Institute in Chicago, followed up with some specific recommendations that he hopes the policy conference acts on. The problem, he said in a nutshell, "is Michigan," which has "very poor governance" that leads to "poor policies" and "poor decisions," like the Michigan Business Tax. Some states with "good governance": Determine what functions are properly a role of government. Make a tentative budget for each function. Compare that tentative budget to an independent assessment of the state's revenues, which then requires "tough choices" if the government really is going to live within its budget. "Corporate Welfare" is not a legitimate role of government, said Genetski. Incentives to lure a particular type of industry to Michigan -- such as renewable energy -- are done at the expense of other industries already existing in Michigan, and at the expense of the Michigan taxpayer. And he said that "three, maybe four or five years down the road," renewable energy "may be passe" due to technological changes. Genetski's three major policy changes for Michigan are: Don't punish business for doing business in Michigan. Eliminate entirely the Michigan Business Tax, which he called "the third highest business tax in the country for certain types of businesses." For some businesses, only New York and California would tax them higher. Perform government functions in Michigan at least as efficiently as other states. He gave an example: The State of Illinois sold the Chicago tollway. Another example: Michigan spends significantly more on education than other states. Private schools operate much more efficiently than public schools in Illinois, he noted. Promote a free market for workers so wages reflect worker productivity. "Our labor market is inflexible. It doesn't respond to market pressures," Genetski said. He suggested the power of unions may have played a role in weakening the Michigan economy, and he called for a Right-to-Work law in Michigan. But it won't be easy: there will be a lot of opposition with 22 percent of the Michigan workforce unionized, and "huge war chests" held by the unions. "I believe we have to take this issue straight on," he said, referring to the fixes required for the Michigan economy. "We need to start now by getting the word out to all people of Michigan about how the Michigan economy got this way and what it will take to fix it." Pete Daly, reporter