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DETROIT BUSINESS MAIN 02-05-07 A 9 CDB 2/2/2007 11:54 AM Page 1 February 5, 2007 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: How to rethink taxes and spending We need fundamental reforms keep calling for large-scale consoli- services than Michigan. Signifi- states tax beer at five times Michi- in how Michigan both spends and dation of business operations. cant sums could be raised by taxing gan’s rate of 2 cents per bottle. Oth- collects our taxes. Such ideas could gain traction if more items while lowering the rate. ers raise significant cash through This isn’t some obscure argu- state aid were tied to proven effi- Business tax: Lower the rate sales taxes on soda pop. It’s hard to ment best left to academics and bu- ciencies. and broaden the base. Fewer than imagine producing businesses leav- reaucrats. It’s at the core of such Critically examine public-sector 500 Michigan businesses pay more ing Michigan because our taxes on living room issues as the rising pay and benefits. Michigan taxpay- than a third of the entire single- unhealthy beverages are too high. costs of college, the dependability business tax. More than 80,000 A paper containing full discus- ers are on the hook for $35 billion in of your local cops and firefighters, businesses pay no SBT. sion of these ideas is online at unfunded public-sector pension and the security of your job. Graduate the income tax. Michi- www.thecenterformichigan.net. What to do? We have a choice. and health care costs. Local govern- gan could raise the state tax rate We welcome questions, debate and We can keep staggering along, Phil Power John Bebow ment costs in Michigan are hun- for those with highest incomes. improvement of these concepts. patching the state budget year af- more than 550 public school dis- dreds of millions of dollars above They, in turn, would likely see lit- It’s our collective future. Let’s face ter year the way we patch pot- tricts, more than 200 charter those in states without binding ar- tle or no actual tax increase be- it through engaged citizenship. holes. Or we can truly transform schools, and 57 intermediate bitration in contract disputes. cause state taxes can be written off Phil Power is chairman, presi- the way our state works. A durable school districts. Despite coopera- Sales tax: Lower the rate and federal returns. Thirty-seven dent and director of The Center for solution requires finding common tive talk, much duplicated bureau- broaden the base. All but 11 states states do this now. Michigan in Ann Arbor. John Be- ground, far away from the normal cracy remains. School leaders impose sales taxes on more types of Consider beverage taxes. Some bow is the executive director. partisan, transactional Lansing politics. Here are eight thorny ideas to jump-start the discussion: Ⅲ Reduce prison spending. The state spends $1.9 billion a year to © 2007 Southwest Airlines Co. Airlines Southwest 2007 warehouse some 125,000 prisoners, parolees and probationers. The state spends another $1.9 billion a year on community colleges and universities educating around 300,000 students. Which is the better investment? Michigan’s incar- ceration rate is 40 percent higher than in neighboring states. Keep better score. Michigan au- tomatically sends billions in sales taxes straight to school districts and local governments. Instead, we need a statewide scorecard to spur local efficiencies in budgets, staffing, pay and benefits. Money should follow concrete results. Erase borders. Michigan has 83 “SOUTHWEST KNOWS TRAVELING FOR counties, more than 1,200 town- WORK SHOULDN’T BE HARD WORK.” ships, nearly 500 cities and villages with fewer than 10,000 residents, PAT COOPER, Corporate Travel Manager & Information Leader LETTERS CONTINUED Hallmark Cards, Inc. ■ From Page 8 Second, I have had the opportu- nity to experience the results of several years of effective state- based strategic investment and economic development in Ohio. Ohio has an elaborate program of economic development that has stimulated big growth in materials and manufacturing processes. There is a tremendous amount of new business activity and support through grants, loans and other incentives driven by required “EVERY DAY we send employees all over the country to conduct business. And we know we collaboration between universi- can count on Southwest Airlines to help get them there affordably and without any hassles. ties and small business. As a result of this business activity, angel investor groups such as “For one thing, Southwest helps our people get where they need to go without always having the Ohio Tech Angels Fund and the to go through the major airports, so getting in and out of the airport is often easier. It’s also Akron ARCHangels have sprung so easy to book on Southwest through SWABIZ, the corporate site that Southwest designed up, stimulated by certain invest- for businesses. SWABIZ is one of the simplest booking tools in the industry and allows us to ment tax incentives to financially support many of these new compa- easily track our travel spending.” nies. There also are a few Michigan angel funds very active in Ohio in- Giving businesspeople like Pat plenty of reasons to say such nice things about us is how vestment. What does this mean we’ve become The Ofﬁcial Airline of Business. when investor groups are choosing to invest outside Michigan? My belief is that Ohio’s economic-development model and its at- tractiveness for investment will drive Ohio far ahead of Michigan in successful business creation and business retention within three years if Michigan continues its current economic-development model. We need to benchmark Ohio and not be embarrassed to copy the model or make it better. John Schirmer Canton Township DBpageAD.qxd 1/31/2007 3:05 PM Page 1 DETROIT BUSINESS MAIN 02-05-07 A 11 CDB 2/2/2007 10:17 AM Page 1 February 5, 2007 CRAIN’S DETROIT BUSINESS Page 11 A CONVERSATION WITH Michigan No. 5 in patents State rankings of patents issued to U.S. residents for the 2006 federal fiscal year, which ended Sept. 30. 1. California . 23,579 2. Texas . 6,345 Robin 3. New York . 6,075 Asher, 4. Massachusetts . .4,089 Clark Hill P.L.C. innovations 5. Michigan . 3,913 Source: U.S. Patent and Trademark Office Robin Asher is a patent attorney with Detroit-based Clark Hill plc. Crain’s reporter Tom Henderson spoke with Asher about new patent process rules expected to be enacted later this year and a much-anticipated U.S. Supreme Court verdict that From growing nerve tissue to sensing could define what makes an idea obvious. Pennsylvania-based Teleflex Inc. alleged that KSR International Co., chemicals, WSU researcher whose U.S. operations are based in Southfield, violated its patents when it started selling pedals to General Greg Auner has made some big breakthroughs. Now the push is on Motors in 2003 (See Page 1 of the July 10 issue of Crain’s). KSR responded that the idea was so obvious it didn’t deserve a patent. A to translate his inventions into products. lower court agreed with KSR, and the appeals court sided with Teleflex. Why does something seemingly as narrowly focused as brake pedals have national ramifications? The Supreme Court rarely takes patent cases. The fact that they did raised a lot of eyebrows. It could change the way we get patents. There are three tests for issuing patents — is it new or novel, is it useful and is it Dollars and nonobvious? The last is the most difficult test. This case is going to redefine the test for obviousness. BY TOM HENDERSON Everyone is sitting on pins and CRAIN’S DETROIT BUSINESS needles. fficials at Wayne State Auner’s research has led to the What’s at stake other than who gets University and collabora- development of neural implants like the royalties on brakes? What other tors in private industry one above. industries could be affected? The drug O hope the time has come sensors industry, perhaps? European courts for Greg Auner to begin turning just denied a patent for AstraZeneca’s his trove of patents — 26 are issued Nexium, the little purple pill, saying it or pending — into a trove of com- WHIZ KID was just the mirror- image molecule in merce. Prilosec, whose patent has expired. Greg Auner (left) got an early How it affects the public and Auner, director of the Smart jump on his career. At age 8 companies outside of auto parts is Sensors and Integrated Microsys- he wired his parent’s how it can change the test for tems program in Wayne State’s basement one night when obviousness. If the Supreme Court college of engineering, has proven they were out, finishing the upholds the appeals court ruling, it adept at generating large research job by the time they got could make it much tougher to grants, too — more than $25 mil- home. “My dad freaked out challenge patents on the basis of lion in the past six years. But a . but to this day, it obviousness and will set a new decade-long trek toward commer- works,” says Auner. precedent. If it overturns the appeals cialization of his team’s research court ruling, it could make it easier to is just now beginning to bear fruit. At 9, he tried to build his challenge on the issue of The school’s technology transfer own laser in the science obviousness. This potentially could office, which funds the legal work club at school.

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