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October 9, 2006 CRAIN’S DETROIT BUSINESS Page 9 Mail order, Internet tax effort brings in $7M LANSING — A multi- and tax-remittance dates, crease throughout the year, month 2 percent of the uncollected remote but still have “work to do.” state effort to collect more will encourage retailers to by month, in the collections,” Vet- sales taxes estimated for that year. That’s below the top four gover- sales taxes from Internet voluntarily collect taxes tel said. He said that if the pace nors whom Inc. judged “a true and mail-order companies on remote sales. continues, the state in current fis- Granholm in middle of Inc. friend whose policies will benefit has netted Michigan more So far, more than 1,000 cal 2007 could easily double its col- businesses over the short and long than $7 million in the first retailers have registered lections from the $7.14 million it magazine’s ratings term,” but above the eight “two- year. in the multistate system, received in fiscal 2006. star” governors who have had some While that’s well shy of which currently encom- Inc. magazine has rated Gov. “fine achievements … mitigated by Remote-sales tax losses are esti- the $26 million revenue passes 20 states. Jennifer Granholm in the middle mistakes, failures or oversights.” mated at $317 million this year, stream state officials ini- Dale Vettel, director of among the nation’s 26 governors The four top governors were tially hoped the effort the bureau of tax and eco- and $349 million in fiscal 2008. up for re-election, based on how Janet Napolitano, D-Arizona; Kath- CAPITOL BRIEFINGS would produce, they say nomic policy for the Michi- By law, Michigan residents must their policies have encouraged leen Sebelius, D-Kansas; Bill Richard- elements of the voluntary Amy Lane gan Department of Treasury, report and pay the 6 percent tax due business ownership and supported son, D-New Mexico; and Jim Dou- program’s startup took longer said he remains optimistic Michi- on remote purchases. But it’s not a their states’ business community. glas, R-Vermont. than expected and the “stream- gan will eventually capture 10 per- widespread practice. In fiscal 2005, The business magazine, in its At the bottom of Inc.’s list is lined sales tax project,” as its cent or more of the taxes it loses in residents reported about $4.5 mil- Oct. 3 issue, ranks Granholm Mark Sanford, R-S.C. known, is taking hold. mail-order and Internet sales. lion in such taxes on their Michi- among 13 “three-star” governors Amy Lane: (517) 371-5355, alane@ That’s encouraging to Michigan “What I have seen is a steady in- gan income-tax returns — less than who are “creative and diligent” crain.com retailers. For decades, they have been working toward greater tax collection from out-of-state firms. “The most important thing is, it’s a start,” said Tom Scott, vice ONE KENNEDY SQUARE | DETROIT president of public affairs and communications for the Michigan Retailers Association. “Our biggest concern was al- ways the level playing field. If it’s mandatory (sales tax) collection in Our Success in Detroit a store in Michigan, it should also be mandatory collection on the In- ternet or from a catalog.” But under current law, it’s not. is Developing Nicely. Mail-order and Internet retailers must collect and remit sales tax only in states where they have a physical presence. Scott said the tax inequity gives out-of-state firms a 6 percent price advantage over Michigan retailers because they don’t have to collect Michi- gan’s 6 percent sales tax. “That may not be a big deal on a small item, but when you’re talking about computers or furniture, that’s a considerable amount,” he said. The retailers’ ultimate goal is for Congress to approve legislation that would mandate tax collection. The idea behind the streamlined sales tax project is that a simpli- fied, uniform tax-collection system, with electronic registration for retailers, standardized rules

LETTERS CONTINUED ■ From Page 8

a month for me), increase in medical and dental premiums, shorter layovers, no crew meals when we could have a day scheduled for 13 hours and five legs and only 50 It takes leadership, integrity, and vision to create a successful future. minutes between flights. Where in this country does an employer not allow a lunch break At REDICO, we’re proud of the national presence we’ve built or intermediate breaks during the day? Sick pay is at only 75 percent when we pay 100 percent. These upon our long-standing foundation here in Metro Detroit. are only a few work rules that have changed. Sorry to inconve- nience the passenger for wanting fairness instead of slave labor. Oh, I know you say I could quit and get a different job if I am so un- happy, but who in this economy (especially Michigan) would hire a Building the Best in Real Estate® 53-year-old woman? I have worked 17 years for Northwest Airlines, and I have continued to work for the safety and well-being of all our 248 827 1700 passengers, but this is getting down to a safety- and health-related issues for all of us. Deborah Otto Flight attendant Northwest Airlines Inc. Holly DETROIT BUSINESS MAIN 10-09-06 A 10 CDB 10/6/2006 11:54 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS October 9, 2006 Gilbert hopes Fatheads are investment that sticks

BY ANDREW DIETDERICH Other li- “We’re not talking about the National Football League and the said Andy Appleby, chairman and CRAIN’S DETROIT BUSINESS censing deals posters here,” Gilbert NBA. The helmets are available CEO of Rochester-based General are in the works, said. “These things look for NFL and some National Colle- Sports and Entertainment L.L.C. “I’d Dan Gilbert’s latest venture has and Gilbert said he ex- like they’re coming out giate Athletic Association football put my money on Dan for this nothing to do with online mort- pects revenue to be $25 of the wall.” teams. Some NASCAR vehicles are one.” gage lending and just a little to do million between Sept. 1 That was the appeal, available as well, at 3 feet high and Fatheads have been advertised with the Cleveland Cavaliers, the Na- and Aug. 31, 2007, using he said, and why he 7½ feet wide. on the ESPN networks, the NFL Net- tional Basketball Association team the start of the NFL sea- thought it was a good in- Gilbert said Fathead officials work, DirectTV and Dish Network, and he owns. son as a benchmark. vestment when he first are negotiating with Major League the Comedy Central and Spike TV That’s because his newest com- The company did not saw them. Baseball and the National Hockey channels. pany, Livonia-based Fathead L.L.C., want to release rev- Fatheads are life-size League to begin offering players “A lot of the appeal has to do sells life-sized vinyl wall graphics enue to date. vinyl wall graphics of and logos from those leagues, with completing a decorating of Cavs star LeBron James, along The 6-foot-tall vinyl players 6 feet tall and 3 feet along with many others. scheme, like in a basement bar or with more than 150 other profes- Fatheads got wide. There are helmets “I’ve known and admired Dan an area like that,” said Mike Foley, sional sports stars, pro and college investor Dan available that are 4 feet for years, and I know that before DC Sports Twelve Oaks team logos, and NASCAR race cars Gilbert’s tall and 4 feet wide. Play- he invests any money he thorough- manager of at attention. at $99 a pop. ers are available from ly researches his investments,” Mall in Novi. “I think they’ll sell. I’ve seen a couple, and they’re not a bad product.” For now Fathead sticks to sports, Gilbert said, but could move into other areas such as mu- sic, movie stars and even family members. The company is an investment of Camelot Ventures L.L.C., the private investment group led by Gilbert and David Katzman. The Fathead brand launched in September 2005 with NFL players and helmets. NBA players and NASCAR race cars were soon added. A five-person startup originally called Fathead Inc., the company lacked the capital to realize the full potential of the product, Gilbert said. “Because of costs, you can’t just make one or two,” he said. Fathead L.L.C. has no affiliation with the old company, and Eliza- beth Jones, vice president of Quick- en Loans Inc., said that for that reason, the new company did not want to provide any contact information for the founders. Camelot took over all licensing agreements of the previous company, which dissolved in June. Terms were withheld. Since then, the company has hired 25 and plans to double employment by the end of the year. Gilbert didn’t want to say how A LAW FIRM UNLIKE ANY OTHER much the products cost to make. They’re made at various printers, he said. Because the images have to be li- censed, either through the individual player or the league, Gilbert said he doesn’t worry about competition developing a similar product because leagues and players won’t license for a similar or identical use. Fatheads are sold only via the Internet, a similar model to another Camelot Venture investment. Camelot has invested in Pleas- ant Ridge-based ePrize L.L.C., an on- ™ Uncommon Name. Uncommon Approach. Uncommon Value. line promotions company that ex- pects to have revenue this year of At Dykema, we’re different from the rest. We've been doing things $40 million. Camelot also has invested in Lens Express and 1-800 unlike any other law firm for more than a century by helping clients Contacts. achieve strategic business results. Dykema — uncommon value. Camelot owns the Cavaliers, with Dan Gilbert being the majority owner and David Katzman a California | Illinois | Michigan | Washington, D.C. www.dykema.com part-owner and vice chairman of the team. Camelot also operates the Quicken Loans Arena, where the Cavs play. © 2006 Dykema Gossett PLLC Andrew Dietderich: (313) 446- 0315, [email protected] DETROIT BUSINESS MAIN 10-09-06 A 11 CDB 10/6/2006 9:37 AM Page 1

October 9, 2006 CRAIN’S DETROIT BUSINESS Page 11

REPORTER’S NOTEBOOK In Crain’s between now and the election Amy Lane writes ■ What’s next for business taxes after about business issues at the the SBT dies? See next Monday’s Capitol, issue for the answers. telecommunica- tions and ■ Ballot proposal endorsements are utilities. Contact on Page 8; opinion on the guberna- her at alane@ torial race will be published Oct. 23. crain.com. Election guide

Amy Lane Business issues all over ballot There’s much at stake this November for business beyond the governor’s race and ballot proposals. In Washington, a potential loss of Republican U.S. House control could mean new Michigan clout. U.S. Reps. John Dingell, D-Dearborn, and John Conyers Jr., D-Detroit, would become chairs of their respective House Committees on Energy & Commerce and the Judiciary if “the U.S. House changes hands. And that’s likely,” said Sarah Hubbard, vice president of government relations for the Detroit Regional Chamber. In the Republican-controlled Michigan Legislature, power upset is less likely. But a key contest for Democratic gain is the Senate seat being vacated by Shirley Johnson, R- Troy. Former state Rep. John Pappageorge, R-Troy, who ran unsuccessfully for Congress in 1992, 1994 and 1996 against U.S. Rep. Sander Levin, D-Royal Oak, now faces his son, Democrat Andy Levin. Craig Ruff, senior policy fellow at nonpartisan Public Sector Consultants Inc., said he doesn’t think Democrats can win a Senate majority but they could move from holding 16 seats to 19, one seat shy. That would give Democratic Lt. Gov. John Cherry, if re- elected, the deciding vote in hen Michigan voters go to the polls Nov. 7, Ruff Senate splits. they will decide on five ballot issues. But there And if it holds true that “Republicans And some you will: generally follow a business agenda W are five other issues at least as important to more than Democrats,” that could affect business policy, Ruff said. the state — and the state of business. Some have crept But another Lansing official into the campaigns, and all will be issues the next watching the House and Senate outcome said there are many governor and legislators will face. business owners in the Democratic The five issues are listed below and are written about in caucuses as well as Republican caucuses. more detail beginning on Page 12 by John Lindstrom, editor “We’re not in there trying to help of Gongwer News Service, a daily political reporting service. somebody win control as much as we’re hoping to continue to have friends in all four caucuses,” said Jennifer Granholm Dick DeVos Rob Fowler, president and CEO of the Corrections Small Business Association of 1 Tougher laws, more prisoners drive fastest-growing area of the Inside this section Michigan. state budget. The race between Republican Secretary of State Terri Lynn Land The race for governor and Democratic Macomb County Pensions Jennifer Granholm and Dick DeVos sat down with Clerk Carmella Sabaugh is of high 2 State and local governments are growing worried about the Crain’s for interviews on the issues confronting interest to Hubbard, who cited Land’s costs of their retirement and health care systems. Michigan. Summaries of their positions are on advocacy on border-crossing issues Page 17. Excerpts begin on Page 15. and efforts to convince federal officials of the merits of an enhanced driver’s license-passport document Stem-cell research Ballot proposals for identification, rather than a new 3 Does the ban on research involving embryonic stem cells passport requirement. affect the state’s ability to attract biotech R&D? Crain’s asked supporters and opponents of ballot proposals on K-16 funding, eminent-domain and Hubbard is also watching the race affirmative action to argue their positions. Page 20. between U.S. Sen. Debbie Stabenow, Also, how Proposal 2 might affect the city of Detroit’s D-Lansing, and Republican Oakland SBT efforts to help targeted businesses. Page 24. County Sheriff Michael Bouchard. 4 The single-business tax is going away. But the big unknowns Stabenow has “been doing a good are what replaces it, when, and how big it should be. job” in areas important to the Detroit On the Web chamber, such as health care and transportation funding, while Bouchard has a good track record as sheriff and Term limits More election was “very supportive of the business 5 Supporters say lawmaker turnover brings in new ideas; critics ■ Extended transcripts of Crain’s interviews with the say it limits expertise and diversity. community” when he was in the state candidates are available at www.crainsdetroit.com. Senate and House, she said. ■ Reader opinions on who won last week’s debate. DETROIT BUSINESS MAIN 10-09-06 A 12,13 CDB 10/6/2006 9:33 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS October 9, 2006

FOCUS:ELECTION GUIDE 1 Corrections: Large prison population drives costs 2 Public Issues surrounding crime and the 2006-07 fiscal year — is practi- information officer of the correc- total corrections expenses would punishment are as complex as the cally three times the size it was in tions department. be cut by $500 million. pensions: famous Russian novel by that 1990. Actual crime is only partly to But state officials show no inter- name. State officials face an in- Driving those costs is the blame for the increase in prison- est in changing how people are creasingly difficult task to bal- prison population. In 1979, there ers. The state’s policies toward punished. In fact, all indications Lack of ance public safety with the cost of were about 15,000 inmates. At the punishment — requiring prison- are tougher punishment will con- imprisoning felons. end of 2005, there were 49,377 in- ers to serve minimum sentences, tinue. Legislators are already look- No area of the state budget has mates. And most prisoners are tougher attitudes toward parole ing at what changes need to be grown faster than corrections. The not locked up for assaultive and zero tolerance toward parole money for made in light of the crimes of Department of Corrections em- crimes. violations — have much to do ploys 31 percent of 53,200 state In 2004, more than 40 percent of with the prison populations. Patrick Selepak, who killed three workers, according to figures re- inmates were imprisoned for as- The nonpartisan Citizens Re- people after being mistakenly re- future is big leased this spring. In 1980, the de- saultive crimes, 44 percent for search Council said that if Michi- leased after violating parole. What- partment employed 7 percent of nonassaultive crimes and 15.7 gan incarcerated people at the ever those changes are, no matter the state’s then-70,000 employees. percent for drug-related crimes, same rate as the other Great how necessary they may be, they concern And its budget — $1.9 billion for according to Russ Marlan, public- Lakes states, including New York, will bring more cost to the state. Technically, public pensions are on the ballot in one form. The Educational Funding Guarantee, also known as the K-16 proposal, caps how much school districts and universities have to pay for pensions and retiree health care costs and shifts the rest of the cost to the state. Thanks to the struggles of the state’s auto industry, the world knows about the costs of retiree health care and pensions on corporations. Nationwide, state and local governments are growing worried about the costs of their public pensions. It’s a good news-bad news story for Michigan. Beginning in 1997, every new state worker had to join a defined- contribution plan. But the state did not demand the same of the Michigan Public School Employee Re- tirement System. And the state’s largest cities and counties are beginning to struggle with the costs of their retirement and health care systems. A bill is moving through the Legislature to allow local governments to issue bonds to cover those costs. The issue is particularly acute for public school districts. Propos- al A in 1994 changed how teacher and school worker retirements were financed. Before Proposal A, both the state and local districts contributed to retirement costs. Proposal A put the onus on local districts. A report issued recently by the state Senate Fiscal Agency said those costs will equal 12.95 percent of total school financing in the 2006-07 fiscal year, which started Oct. 1. In 1999, it accounted for 9.13 percent of total school financing. Unfunded future expenses are a CONTINENTAL GT. major concern. School retiree health care is paid APPROACH YOUR DESTINATION. on a pay-as-you-go system and now requires a contribution equal to about 6 percent of a worker’s salary. By 2020, said Tom Clay of the Citi- Moments like this are what you’ve strived for. Don’t put it off any longer. zens Research Council, that contribution could equal 20 percent of an employee’s pay. BENTLEY TROY In 2004, the nonprofit, nonparti- B Maplelawn Drive, Troy, MI 1755- 48084 san council issued a report that said For information call 866 830 1122 the total unfunded accrued health www.bentleymotors.com/bentleytroy BENTLEY TROY care liability was more than $15.7 billion for school workers, and their ‘Bentley’ and the ‘B in wings’ device are registered trademarks. © 2006 Bentley Motors, Inc. unfunded pension accrued liability then totaled $6 billion. DETROIT BUSINESS MAIN 10-09-06 A 12,13 CDB 10/6/2006 9:33 AM Page 2

October 9, 2006 CRAIN’S DETROIT BUSINESS Page 13

FOCUS:ELECTION GUIDE 3 Stem cells: Research ban may keep out life-science businesses

Since 1998, Michigan has versity because of Michigan’s ban. to conduct research to save lives. financing is under way in Califor- has no Republican co-sponsors. In banned embryonic stem-cell re- Critics including the Michigan Opinion polls have consistently nia, Connecticut, Ohio, Illinois, the state Senate, however, similar search — a facility doing research Catholic Conference and Right to Life shown the public supporting em- New Jersey, Massachusetts, Texas legislation has been introduced by can be fined as much as $5 million of Michigan say using embryonic bryonic stem-cell research. The na- and Florida. Republican Sens. Bev Hammer- — and some now worry the ban af- stem cells destroys human life and tional Coalition for the Advancement of But the issue remains hot politi- strom of Temperance and Shirley fects Michigan’s ability to attract the state should be unstinting in its Medical Research, a pro-stem cell re- cally. Republican activist Ronna Johnson of Troy. high-tech life-sciences businesses. defense of life. Opponents are also search organization, released a poll Romney defended her former Gov. Jennifer Granholm has Lou Glazer, president of Ann Ar- promoting greater use of alterna- in the spring that showed that 72 brother-in-law, Massachusetts created an online petition, signed bor-based Michigan Future Inc., said tive research by encouraging devel- percent of 1,000 people contacted Gov. Mitt Romney, when leaflets the ban could also affect Michi- opment of cord-blood banks. supported the research. were passed out at the state Repub- so far by 7,288 people, urging the gan’s future status as a state where Supporters say the embryos that Many states with top research lican Convention blasting him on Legislature to enact a stem-cell cutting-edge research is conduct- could be used, left over from in-vit- universities have started financ- his support of some types of stem- bill. ed. The University of Michigan has al- ro fertilization procedures, are de- ing embryonic stem-cell research. cell research. Meisner said there may be a ready lost a top researcher and the stroyed, and question how it is Rep. Andy Meisner, D-Ferndale, a Meisner has legislation to allow move in the future to put the issue company he created to Stanford Uni- more moral to defend embryos than leading legislative advocate, said the research, but the bill, HB 4900, on the ballot.

4 Single- business tax: Replacement tax’s form is uncertainty

Come Jan. 1, 2008, Michigan’s 33- year old single-business tax dies. What will be born in its stead is what has business nervous. Of all issues facing policymak- 0LFKLJDQ·VEXVLQHVVHVDUHFRPLQJWRJHWKHUWRYRWH1RQ3URSRVDO ers in Lansing, a new business tax is both one of the most immediate !DIVERSEWORKFORCEISVITALINTODAYSGLOBALLYCOMPETITIVEECONOMYnITIMPROVES and controversial. The SBT and its companion insurance tax raise be- THEBOTTOMLINE 0ROPOSALWOULDTAKEAWAYTHETOOLS-ICHIGANNEEDSTOENSURE tween $1.8 billion and $2 billion annually. If those numbers sound fa- THATOURSTATESECONOMYMOVESFORWARD 0ROPOSALELIMINATESALLAFFIRMATIVEACTION miliar, remember the Michigan ANDOUTREACHPROGRAMSTHATPROMOTEDIVERSITY Department of Corrections budget to- tals $1.9 billion. Rely on this: Michigan will have a business tax. Ari Adler, press :HFDQ·WJREDFNZDUGQRZ'RQ·WUROOEDFNSURJUHVV9RWH1RRQ3URSRVDO secretary for Senate Majority Leader Ken Sikkema, R-Wyoming, said businesses understand they benefit from state programs and should help pay to maintain them. 2QH8QLWHG0LFKLJDQPHPEHUV What’s at stake is creating a “fair” tax, and whether that tax in- !MERICAN!RAB#HAMBEROF#OMMERCE $ETROIT2ENAISSANCE cludes an overall cut. There are a number of complica- !SIAN0ACIFIC!MERICAN#HAMBEROF#OMMERCE (ISPANIC"USINESS!LLIANCE tions to any solution. First, when does a replacement tax get enact- "OOKER47ASHINGTON"USINESS!SSOCIATION -ICHIGAN(ISPANIC#HAMBEROF#OMMERCE ed? Sikkema, who is term-limited, wants the replacement resolved "USINESS0ROFESSIONAL7OMEN -ICHIGAN .ATIONAL!SSOCIATIONOF7OMEN"USINESS/WNERS yet this year. But he’s also acknowledged there’s only a slight #HALDEAN!MERICAN#HAMBEROF#OMMERCE ANDMORETHANOTHERS chance that will happen. The gubernatorial election $ETROIT2EGIONAL#HAMBER could gum up timing. If Republi- can Dick DeVos defeats Granholm, what’s best for him politically? Some Republicans want to hold off action until 2007 so he can play a role. Other Republicans feel DeVos needs to be shielded from criticism if the replacement tax is a bust, so it should be enacted this year. But it’s the technical issues that will prove most nettlesome. A joint 4OLEARNMOREABOUT0ROPOSALANDHOWYOUCANEDUCATEYOUREMPLOYEES House-Senate committee is sup- posed to recommend a replace- PLEASEVISITZZZRQHXQLWHGPLFKLJDQRUJ ment tax by Dec. 1. The committee has met a few times but no propos- 0AIDFORWITHREGULATEDFUNDSBY/NE5NITED-ICHIGAN 0/ "OX ,ANSING -) al so far has come forward. DETROIT BUSINESS MAIN 10-09-06 A 14 CDB 10/6/2006 10:28 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS October 9, 2006

FOCUS:ELECTION GUIDE 5 Term limits: Turnover, institutional memory become issues Many legislators, lobbyists and sis as objective quantification. women in the Legislature has gone Newell, R-Saranac, as an example Issues often take years to re- observers hate them. Their Since 1992, the 110-member down under term limits. In Janu- of its problems: For six years, solve, and Kelly said that already- strongest defenders think they’re House of Representatives has ary, it is unlikely there will be Newell has been ponderous process is not helped by working exactly as they should. turned over completely twice; the more than 30 women in the House studying and term limits. To review: In Michigan, a per- 38-member Senate has turned over and Senate. In 1999-2000, there working on the For example, replacing the sin- son can be elected to three two- once. One governor, John Engler, were 32 women in the House alone. issue of health- gle-business tax: Fewer than one- year terms in the House of Repre- and one secretary of state, Candice Almost anyone involved in the information third of the 148 members of the sentatives and two four-year terms Miller, have been term-limited out legislative process has the same technology. By Legislature were in office in 1999 in the Senate, a total of 14 years. of office. term-limit complaints: lack of in- January, he is when the first steps to repeal the That is a lifetime limit. A person A study released over the sum- stitutional knowledge, lack of sub- out of office, be- tax took place. If replacing the SBT can be elected governor, attorney mer by the National Conference of ject knowledge and lack of biparti- fore being able bleeds into 2007, at least 21 mem- general or secretary of state for State Legislatures that looked at sanship. to get changes bers of the Legislature will be have two four-year terms. Again, those all term-limit states concluded Kevin Kelly, executive director enacted. Kelly been just elected, never been in- are lifetime limits. term limits have not advanced leg- of the Michigan State Medical So- “Why would volved in any legislative debate on The effects of term limits are as islative diversity. ciety, one of the strongest term- we set up a system of planned obso- the issue and expected to get to much a matter of subjective analy- In Michigan, the number of limits critics, pointed to Rep. Gary lescence?” Kelly asked. speed on the issues of state taxes quickly enough to cast critical votes. Lobbyists and bureaucrats now often become the institutional memory for the Legislature. And the number of lobbyists has been growing under term limits. In 1998, the earliest year the data is available, 2,202 lobbyists and lobbyist agents were registered with the state (lobbyists are the organizations, lobbyist agents the actual individuals). By 2005, that number had grown to 2,573, according to the Department of State. Economist Patrick Anderson, a primary author of term limits, said term limits helps ensure that ideas are refreshed periodically by people who look at issues from the practical perspectives of their lives outside of politics. “Term limits replaces inside- the-government knowledge with outside-the-government knowledge,” he said. And he takes great delight that House Speaker Craig DeRoche, R-Novi, was in business before coming to the Legislature. But DeRoche is also a graduate of the Michigan Political Leader- ship Program at Michigan State University, a group established No pain. Lots of gain. specifically because of term limits. The program helps people interested in political office learn many fine points of governing — points learned in the past through actual experience.

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FOCUS:ELECTION GUIDE

placement this year, how hard and fast will you work in 2007 to Which gubernatorial candidate should get this issue resolved? Don’t government and business need business support? In excerpts from separate significant time to prepare? Granholm: It has to be immediate. The frustrating part is that interviews with Crain’s Detroit Business, Gov. it’s difficult to recruit people here if they don’t know what their tax liability is going to be. That’s why Wall Street put us on a Jennifer Granholm and challenger Dick DeVos negative watch. I wouldn’t have made the move like the Legisla- ture did to eliminate it without a replacement. say how they plan to address the economy, We’ve put a replacement on the table that can be the straw plan from which we work. I think there are certain principles taxes and other key business issues. that everybody agrees to. One is that you’ve got to have a tax that is a pro-growth tax, that is a competitive tax and that is a tax that does not tax job creation and is weighted more toward profit, and that lowers the rate and flattens the base. Published here are excerpts from those I signed into law 60 tax cuts. I just signed into law a $600 million tax cut for manufacturers. There’s another earned-income- interviews. For a more complete transcript, tax credit that’s coming to my desk, which is another $250 million. We have from 1999, which was the year when we were visit www.crainsdetroit.com. selling SBTs at a great clip and our economy was very robust, to today over $1.7 billion less in tax revenue because of tax cuts that have rolled in. Tax cuts alone are not the answer. You have to have a competitive tax climate. That’s why the single-business tax must be re- placed but it’s got to be revenue neutral.

DeVos: The sooner the better. I would rather have a positive outcome than try to drive toward a particular date and time. My goal would be certainly in the first half so that you have a chance to accommodate a transition plan that’s going to give time for organizations to adopt and adjust. Let’s not presuppose that everything has to now change at that date because now the agenda has got to be to move as rapid- ly as we can toward a great solution. We must have a better answer here, and we should not rush through and do haphazard work in finding a good solution.

Gov. Granholm, assuming the Legislature remains Republi- can, how will you get them to pass your plan? Granholm: They need to be aware of what will happen to those who would be impacted by the cut. You can slash further higher education. Do we really want to do that at a time when our goal is to double the number of college graduates? Our tuition rates have gone through the roof as a result of slashing higher education. You can let people out of jail. The prison system takes a very large amount of that general fund budget. That would seri- ously impact our quality of life. Or you can slash more people off of Medicaid: children, people with disabilities or senior citizens. I don’t think the citizens will stand for that. The Upjohn Institute said that Michigan business taxes are 12 First things first percent below the national average. For those who are just locat- ing here, it’s 17 percent below the national average. There are 38 Day one in office, what is your priority to improve Michigan’s states according to the Council on State Taxation, a nonpartisan economy? group that analyzes all the states, who (have higher) business tax- Granholm: We’ve got a “jobs today, jobs tomorrow” plan that es than Michigan does. So it’s not so much the tax revenue that’s has six elements to it, and we’re going to continue to work that the problem. It’s the way the tax is structured that’s the problem. plan. We can’t flip the switch and have the economy transform overnight. And so the second term we’re going to continue to Mr. DeVos, why do you think Michigan can afford a business- work to diversify the economy through our 21st Century Jobs tax cut? Fund, continue to work to transform education like we have in DeVos: I don’t find any dimension that suggests that Michigan is this past year, with higher standards but to double the number undertaxed and Michigan business is in any way undertaxed. We of college graduates. We’ve got a Michigan First Health Care are either somewhere between the middle of the pack or well down plan that we want up and running by April of ’07. We will contin- the list depending on exactly how you want to measure this thing. ue to work that, continue to improve the business climate. That’s the wrong end of the list to be on. And so a tax cut is neces- I hope that by Jan. 1, we have a new business tax in place. But sary, and certainly a methodology shift is necessary as it relates to if we don’t, we have to continue to do that and continue to ele- SBT. Also, personal-property tax is going to be the next item on the Granholm DeVos vate the importance of workforce training through the commu- hit parade. nity colleges. And I would add one more thing to that, which is You have a $42 billion budget. I’ve already laid on the table mass transit for this region. about $800 million worth of cuts that are specific and so that could be made and that would not represent cutting essential services. DeVos: Sort out the SBT problem. This is a really historic oppor- So yes, we can do a tax cut. And if we can put ourselves in a com- tunity. We’ve accelerated a discussion that we were inevitably going to have, that we’re better off to have sooner versus later. And petitive advantage for job creation by doing a tax cut, then that this is an opportunity to do a good evaluation of the competitive would be in Michigan’s long-term interest in my view. dynamic of what’s going on with business taxation in Michigan. Forty-five other states have business-income taxes. We’re the only one that has a value-added form. I’m not suggesting take Campaign issues longer than necessary, but I am suggesting to be sure that we understand both dimensions. There’s only been one dimension Gov. Granholm, you have criticized Dick DeVos for China oper- largely discussed, and that is how much to replace. I would like ations he created as president of Ada-based Alticor Inc. How is to look at the other side of it, which says how do we replace it in that different from General Motors cutting jobs in Michigan and a competitively sustainable and attractive manner? building factories to sell cars in China? And that is where we have to take a fair bit of time to understand what the competitive set is, understand how alternative Granholm: My opponent has run $20 million of ads saying two plans presented by a variety of organizations will work their way things. One, that he’s a jobs maker, the inference being that he’s into placing Michigan in at least in the mainstream and hopefully making jobs in Michigan. And two, that Michigan’s economy is give us some competitive advantage. Taxes count. They do matter. in the tank because jobs are leaving. Come to find out that he’s made jobs — but not in Michigan, in China. In fact, he’s cut jobs in Michigan. That is fair game. That’s why the importance of Business tax 2.0 those ads underscores — it’s less about Alticor or Amway than it is about him. Assuming the Legislature does not approve a business-tax re- See Page 16 DETROIT BUSINESS MAIN 10-09-06 A 16 CDB 10/6/2006 9:40 AM Page 1

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■ From Page 15 You’re talking about being on the I’m the governor of Michigan. wrong lists. One of the governor’s I’m not the governor of Alticor, and agenda items is to increase the I’m not the governor of General Mo- percentage of the population with tors. If a Michigan company makes some kind of post-high school cer- products in Michigan and exports tification. them across the world, that’s a good thing. If I go to other countries and DeVos: Ultimately I think that’s a bring international investment to worthy goal, but right now we are Michigan and jobs for Michigan cit- in the process of educating stu- izens, that’s a good thing. If a dents for jobs in every other state Michigan company cuts jobs here but our own. I applaud what the in order to invest overseas, I think governor is saying, but we are that’s a bad thing for funding our state insti- Michigan. It may be fine tutions at substantial for General Motors, but levels of resource for it’s bad for Michigan. kids to be able to take those skills elsewhere. It’s a separate issue To suggest that every- than cutting jobs here body should go to college and investing some- is as wrong as suggest- where else. Those are ing no one should go to kind of unrelated. college. We need to have our young people being Granholm: If you’re Right trained for what’s re- downsizing here and in- “ quired ahead. For many, creasing (there), you’re now we are and I think an increas- shifting company re- ing percentage, it’s go- sources. in the ing to require at least four years of training, You’re reacting to the process of but not all. My greatest market. You’re not fear and concern relates shifting. educating to the K-12 system, not Granholm: It’s still a students for the higher-education shift of resources, system. right? You’re downsiz- jobs in every ing — the balloon The Detroit squeezes down here, other state and it lifts up over there. For Michigan, as but our dimension the governor of Michi- gan, that’s not a good own. Both of you have thing. We lose jobs. ” talked a lot about the importance of a revitalized Detroit But activities somewhere else to the region and to the state. are unrelated to that. What steps would you take to do Granholm: And maybe they are in this? GM’s case. But in the case of Alti- Granholm: The single most im- cor and Dick DeVos, it is — when portant thing that we can do is to you cut jobs here after you went on have a light-rail transit system in MICHIGAN’S MOST EXPERIENCED LOBBYING FIRM the record as being a jobs maker Southeast Michigan. Now on top of and you created jobs in China and that, you have to reduce the cost of not in Michigan like you’ve implied living in the city of Detroit. I just that you have, that’s fair game. came from a press conference an- nouncing the cut on insurance

Mr. DeVos, how might the rates for metro Detroit area resi- women’s vote affect this election, dents who qualify. But you’ve got and why is it that your campaign to continue to invest in revitaliz- advertising hasn’t focused on is- ing the city, bringing people down- town, making sure it’s a dynamic HEAR WHAT OUR CLIENTS SAY: sues that address women? You city and all of that. picked Ruth Johnson as your run- We have to look at models that

Karoub was instrumental in our legislative ning mate, but beyond that we have occurred in other cities. It’s haven’t seen a lot in terms of what got to be a partnership with non- efforts and is an important on-going advisor your message is to women. governmental organizations as DeVos: You have seen a lot of well as the regional chamber. John to our many initiatives throughout the State. Hertel has now left the State Fair what my message is to women be- and is going to be the (transit) Robert S. Taubman, Chairman, President and CEO, cause the issues we’re facing right czar. He and I have talked about Taubman Centers, Inc. now in this state are not — the (Legislation to revise Michigan’s Business Corporations Act) this. Buses are important, but a ‘‘ most pressing issues, they know clean, safe, efficient light-rail sys- no gender. And the issues are jobs tem in this region would have an They are a top-flight firm characterized and the opportunity to sustain and enormous impact on the region support ourselves in this state and and on the city. So you have to by integrity and getting the job done. very importantly the problem that have the private sector involved. ‘‘ we have with our young people And whether it’s the Ilitches, who Toni Coleti, CEO, Consumer Financial Services Association (Legislation to regulate an unregulated business) who are leaving this state as a re- have an interest in making sure sult of lack of opportunity here, we’ve got a rail system down to getting oftentimes a very good edu- (Comerica Park), or the Fords or cation at wonderful colleges and the Penske arm of things, I think All I can say is, if you need universities and then they are that all of those great leaders who the impossible done, go to Karoub. gone. The impact on our families is have a great investment in making very real. We’re hearing a very sure that this region is trans- Ann Berry, Michigan Athletic Trainers' Society formed have to be a partner in (Legislation to license an unlicensed health profession) clear message about families, about our children, about our fu- making this happen too. I think ture, and that message is being Dan Gilbert could potentially be a heard loud and clear as I talk to partner. WITH THE MANY LEGISLATIVE AND BALLOT ISSUES CURRENTLY IN LANSING, IF YOUR BUSINESS OR ASSOCIATION men and women across the state. NEEDS A VOICE, WE CAN HELP. CALL KAROUB ASSOCIATES TO ASSIST WITH YOUR LEGISLATIVE AND PUBLIC AFFAIR NEEDS. DeVos: No. 1, it’s got to be safety Mr. DeVos, do you also think and security for the city. We have 517 482 5000 www.karoubassociates.com that Michigan should graduate 1,500 less uniformed police officers more people from higher ed? See Page 18 DETROIT BUSINESS MAIN 10-09-06 A 17 CDB 10/5/2006 4:39 PM Page 1

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Where Jennifer Granholm and Dick DeVos stand on business-related issues:

■ Business-tax replacement for Tax should have a lower rate, broader base, be Tax should have a broad base and be centered on business ❑ profit-sensitive and should not reduce state revenue. ❑ profits and gross receipts. Plan would include a business-tax Michigan’s single-business tax cut, paid for in part out of $800 million in government savings and program cuts.

■ Personal-property tax relief State Treasurer Robert Kleine has floated the idea of a $600 Reduce personal-property tax by an unspecified amount, paid ❑ million to $700 million personal-property tax cut applying to ❑ for in part out of previously mentioned savings and program commercial and industrial personal property. The rate of any cuts, and economic growth in future years. new overall business tax would need to be high enough to pay for the tax cut, thus no reduction in state revenue.

■ Sales tax on services ❑ Opposed. ❑ Opposed.

■ Improving Michigan’s Proposed a Michigan First Health Care Plan to cover 1 million Provide incentives for colleges and universities to graduate ❑ uninsured adults, who could access insurance plans offered ❑ more health care professionals. Give Michigan’s small health care system through an “exchange” or administrator. Premium assistance businesses more options for health care, by examining ways in would be provided based on income, and small businesses which they could pool for insurance. Promote consumer-driven that do not offer insurance could purchase it from the health care options like tax-free health savings accounts. Also exchange. Previous initiatives include a multistate compact to open to looking at the idea of a state mechanism like the purchase prescription drugs in bulk, a prescription discount health insurance “exchange,” matching individuals and card, and appointing the state’s first surgeon general, who has businesses with affordable policies. targeted healthy behavior and personal responsibility, to lower overall health care costs by reducing preventable conditions.

■ Improving education Formed commission to find ways to double the number of Would start a merit-pay program to recognize outstanding ❑ college graduates in Michigan in 10 years and worked with ❑ teachers. Would target more funding for middle school math state Board of Education and Legislature to create rigorous and science classes, and provide for alternative certifications new high school core curriculum, for which she had called. that allow professionals in those fields to teach classes. Has proposed a new $4,000 scholarship for all students in College and university state funding would contain incentives Michigan, available to students seeking to earn a two-year to produce more math and science teachers. Would seek to college degree, technical certification or a four-year degree. require competition for public school health insurance.

■ Diversifying Michigan’s economy State’s new 21st Century Jobs Fund will broaden the economy Would create a technology transfer center that would help ❑ and spur innovation and technology, producing jobs and ❑ universities commercialize research. Would recruit companies business growth. The fund contains $1 billion authorized by in emerging fields such as life sciences, alternative energy and the Legislature and is expected to grow to $2 billion through manufacturing information technology, and improve access to leveraging other investments and resources. The money will venture capital for Michigan businesses. go toward a host of programs, and targets the emerging sectors of alternative energy, life sciences, advanced manufacturing, homeland security and defense.

■ Small business/business assistance Has proposed a state-overseen 401(k) plan that would target Would improve the effectiveness of one government office that ❑ small employers that do not offer pension coverage. Program ❑ brings together all relevant departments that an entrepreneur is designed to alleviate administrative costs, requirements might need to start a business. Separately, would eliminate and ongoing duties that can deter businesses from setting up “burdensome paperwork” — such as filing to pay business tax their own pension plans. — for new small businesses for one year. Would establish a Also has established partnership with Charter One Bank to small-business regulatory review commission to do a cost- offer $200 million in loan funds at low interest rates to benefit analysis of existing and proposed regulations. companies who create or expand Michigan jobs. Other steps Wants incentives for research and development in the new include accelerating public-infrastructure projects, matching business-tax replacement, and would exempt emerging qualified workers with jobs and retraining others, cutting technologies from personal-property tax. Would ask the federal business-permitting time and putting permits online. Signed government for a job-training block grant, under which Michigan tax cuts aiding large and small businesses, including a $600 could design programs. Proposes to eliminate state income million tax cut for manufacturers. tax for families at or below the poverty line. ■ Would you support a right-to-work law, ❑ No. No. which would make it illegal to require ❑ workers to join labor unions as a condition of employment?

■ Michigan Civil Rights Initiative ballot Opposed. Opposed. proposal, which would ban affirmative action ❑ ❑ programs that give preferential treatment to groups or individuals based on race, gender, color, ethnicity or national origin, for public employment, education or contracting.

■ “K-16” ballot proposal to require the Opposed because there is no guaranteed revenue stream to Opposed. state to provide annual funding increases ❑ pay for the funding increases. ❑ equal to the rate of inflation for K-12 schools, intermediate school districts, community colleges and universities. DETROIT BUSINESS MAIN 10-09-06 A 18,19 CDB 10/5/2006 3:48 PM Page 1

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■ From Page 16 engineering and design, one of the on the street in Michigan today few in the country where we repre- than we did five years ago, many of sent truly a global center. those cuts coming in these last You’ve got the whole alternative- number of years in our communi- energy thing going on. Life sciences ties. That’s going to drive business become a very exciting potential for decisions to locate here. It’s going us as we look at that. And the to drive individual decisions to crossover there with manufactur- live here. ing, medical-device manufacturing, The second dimension is educa- medical-equipment manufacturing tion in the city. We have lost the fo- becomes a potential sweet spot. cus on what education is all about. Let’s step beyond that and say if We have gradually begun to view you like the lifestyle in Michigan, schools and education institutions what if Michigan was the most at- as job providers and are beginning tractive place for you to start your to have debates and discussions own business? One of the great his- about job provisions as opposed to tories and traditions in our state kids learning and our kids walk- has been entrepreneurship. Our ing away with an education. companies all over the state are testimony. My family story is testimony to entrepreneurship. Brain drain — Energy or gain? What new opportunities might for the future be there for recent college gradu- The Michigan Public Service ates in the next few years? What Commission is overseeing the de- other things can get them excited velopment of a long-range energy about staying here? plan. What do you think Granholm: What ex- is the biggest energy is- cites me is alternative sue facing the state energy because I think right now, and how that is the wave of the would you address that? future and having Michigan be the state Granholm: One is the that leads the nation in cost of energy, which finding a way to break contributes to difficulty our dependence on for- doing business in a chal- eign oil. Ann Arbor got lenging economy. And a huge number of these We should the second is our push opportunities, and be- “ for renewable (energy) tween Toyota and be the state and how we can be a Hyundai and Google state that really does and all of these 21st cen- that breaks have a renewable portfo- tury jobs, it just shows lio standard that pushes you the link between the U.S.’ us and challenges us so the universities and that we don’t have to get commercializing great dependence oil in the Mideast. We ideas in the universities get it from the Midwest. to create businesses. on foreign In the past six But Ann Arbor got a oil or at least months, we’ve had nine number of grants related ethanol or biodiesel to alternative energy shows them plants announce that like fuel-cell develop- they are coming or ment. There is such how to do breaking ground or flip great work happening in the switch to run in nanotechnology. I would it. Michigan. I just signed %XPERIENCE.ETWORK,EAD encourage them, first of ” into law a series of agri- all, to go to Michigan.org cultural renaissance zones, which and look at the Web site to see what encourage renewable-fuel technol- companies were funded that are go- ogy and supply. We build the en- ing to come to Michigan and grow gines. We’ve got this agricultural 3INCE THE"ROAD3CHOOL%XECUTIVE-"!HASPREPARED in Michigan. sector, and we’ve got these phe- PROFESSIONALSFORLEADERSHIPINTHEGLOBALMARKETPLACE We’ve planted the seeds. The nomenal universities doing re- s ACURRICULUMFOCUSEDONENHANCINGSTRATEGICTHINKING green shoots are starting to come search on the kinds of plants and ANDDECISION MAKINGSKILLS up. We’re fertilizing them. You client base that we can have for re- don’t rip up the field in the middle s ATEAM BASEDLEARNINGENVIRONMENTTHATPROMOTES newable energy. We should be the of the season. NETWORKINGANDPERSONALGROWTH state that breaks the U.S.’ dependence on foreign oil or at least s A MONTHEVENINGPROGRAMAT-35S-ANAGEMENT DeVos: I’m not going to sit here shows them how to do it. %DUCATION#ENTERIN4ROY and say what those jobs are going to be because I don’t think I can. &ALL%-"!%XPLORATION0ROGRAMS DeVos: Electric. Our costs of elec- What I would say to you is what tricity by every dimension that #OMBININGANINFOSESSION CLASSVISITS ANDDISCUSSIONWITHSTUDENTS can be the atmosphere you can I’ve looked at are high by any stan- ALUMNI ANDFACULTYBEGINNINGATPM look forward to if I’m elected. The dard. Dow Corning made a deci- -ONDAY 3EPTEMBER 4HURSDAY .OVEMBER atmosphere will be a different at- sion to build a major plant here for -ONDAY /CTOBER -ONDAY $ECEMBER mosphere. Google is a nice thing. their silicon production. Their de- Credit to everyone involved. Cred- cision was in spite of a massive 2360WWWBUSMSUEDUEMBAOR it to the governor. A thousand cost uptake because of electrical 9OUAREWELCOMETOSCHEDULEANAPPOINTMENTANYTIME jobs. I think it was 200 jobs over cost. It’s a very high electrical us- five years if they all come to age in that process. Now we were %LI"ROAD'RADUATE3CHOOLOF-ANAGEMENT fruition. That’s against 29,000 lost able to overcome that as a state, -ICHIGAN3TATE5NIVERSITY (in August). This is a step in the and they were able to overcome it -ANAGEMENT%DUCATION#ENTER right direction but a modest step. because they had certain syner- 73QUARE,AKE2OAD I think we have opportunities gies with other operations that 4ROY -) for those who are interested in mitigated that negative. But if this $ANA-7OTHE #0! -"! business and manufacturing. Al- particular company wasn’t head- #LASSOF ternative-fuel opportunities are quartered in Michigan and had al- #HIEF/PERATING/FFICER beginning to be apparent, opportu- ready pre-existing synergies, there 4(%%8%#54)6%-"! "UTZEL,ONG0# nities as we emerge in the automotive sector as the leading area for See Page 19 DETROIT BUSINESS MAIN 10-09-06 A 18,19 CDB 10/5/2006 3:48 PM Page 2

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■ From Page 18 tourism industry about where a ue to clearly invest through the 21st been extremely low, on average, in Tapping into dedicated stream of funding would Century Fund — and we’ve tripled this state, and we’ve forgotten a was no way on God’s green Earth come from, we went to the 21st the amount of money that we are fundamental principle of business: they’d be here. Century Jobs Fund to be able to do investing. But it probably needs to I think we look at transmission. You don’t build the brand only ad- tourism it. That’s $15 million, which is a be somewhere along the lines of The immediate view is to say we vertising in election years. We’ve significant increase, and $40 mil- what Illinois has done ($40 million have a shortage of electricity. We Gov. Granholm, Michigan’s let it kind of go, and now all of a lion for marketing for business, or $50 million on marketing). And I need more power generation, and sudden, boom, we’re throwing all tourism businesses are pushing for which is tremendous. One way or think we need to do a better job, for we better go build another plant. sorts of money at it coincidentally a boost in the state’s annual promo- the other, we have to continue to example, of advertising in South- There’s capacity out there else- in an election year. What’s next? tional spending — from $5.7 million increase the investment in telling where in the system that we can ern states, where, especially in the to $30 million — without tax, fee or our story about tourism because I’m not going to sit here and pick utilize through line transmission summertime, they’re looking for we have such phenomenal, unique a number. I think we do need to in- to buy other power. We don’t have surcharge increases to pay for the places to go. A lot of the snowbirds features in this state that other crease the amount of state promo- to make it ourselves in this state to higher budget. Do you support this of Michigan travel to Florida. Why states don’t even know about. tion that we’re doing. It is an impor- be able to have access to it. Every idea? If not, should tourism get not advertise in Florida for those tant industry, and it has a payback other state around us has lower more promotion dollars? How? Floridians to come to Michigan and cost. If they’re producing, they will What would you do in your next enjoy a great summer? to us that is clear and that we need produce it cheaper in Ohio and are Granholm: I certainly support in- four years to increase funding for DeVos: I do support focus on our to be advocating more consistently willing to sell it to us at a cheaper creasing the marketing budget for tourism? tourism industry, but one of the and more actively to build a Michi- price, why in the world wouldn’t Michigan. Because they could not things I have said is we need to do gan brand beyond just over promot- we want to increase our transmis- get a consensus inside of the Granholm: We’re going to contin- a better job of promotion. We’ve ing in the (election) years. sion ability to access that? Northern TrustNorthern Banks are Trust members FDIC. © 2005 Northern Corporation. Creating cool cities Gov. Granholm, your Cool Cities plan has been both praised and criticized. What do you think is the single biggest difference that the initiative has made? Granholm: It has been a mechanism for local communities to iden- tify signature projects, working together with their community organizations that are business- and economic-development arms and leveraging private resources. All the people who criticized it are on the other side of the aisle. I’m not sure what the criticism is. All this program does is pool state resources that would be going on any- way but focusing them on signa- tures projects that clearly demonstrate a value to that particular community, something that is going to create lofts, live-where- you-work arrangements that foster the arts. The community decides. It has really breathed life into a lot of communities that might not have really realized their own power at the local level to develop and partner on a project that makes them unique or dynamic. Mr. DeVos, why would you eliminate the Cool Cities program and what would you do in its place to help communities? HAVING YOUR CAKE AND EATING IT TO O DeVos: The Cool Cities program is a $4 million item that has created lots of smoke and no real action. This has not spurred significant numbers that I have heard of new initiatives. This has merely provided some funding for pre-existing initiatives. And I look at what we did in Grand Rapids by really getting a community involved in transform- ing a city. That’s become a cool city, in my estimation. That was way be-

fore the Cool Cities program. I’m not having a good quarter convinced at all that it is necessary. I do think that we want to make our cities cool cities, that we want to and having a good life need to make our cities livable. That goes back to safety and security. It’s going to go back to costs The most precious asset is time. And every day, we help our clients make the most of it. We take the time to get to know of living. Our cities have become them, and their needs. And then we continually re-evaluate those needs. Using all our resources to see the opportunities — punitive. The cost of living in the and the risks — that may lie ahead. So they can make the most of their finances, and their time. If you’d like to know more city today too often not only in- cludes an income tax but it in- about how we can help you, call Buell Cole at 248-593-9207 or visit northerntrust.com. cludes property taxes that are punitive. And beyond that, you end up with the cost of education because too often families that want to live in the city decide they are not able to send their kids to Private Banking | Asset Management | Financial Planning school. So they often have the cost Trust Services | Estate Planning Services | Business Banking of education unless we get charter schools going in there. DETROIT BUSINESS MAIN 10-09-06 A 20,21 CDB 10/5/2006 4:38 PM Page 1

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FOCUS:ELECTION GUIDE Proposal 5: K-16 funding 7HENWASTHE The proposed law would increase base funding for school districts with current funding by approximately declining enrollment on a three-year $565 million and require the state to student enrollment average; reduce LASTTIMEYOUSAID provide annual funding increases and cap retirement fund equal to the rate of inflation for contributions paid by schools and 5BYBOE public schools, intermediate school shift the remaining portion to the "TTVSBODF districts, community colleges, and state; reduce the funding gap higher education. The law would between school districts receiving require the state to fund any the basic allowance and the h)LOVEMY deficiencies from the general fund; maximum allowance. #VTJOFTT $POTVMUJOHACCOUNTANTv Pro:Pro: Crucial Con: Plan is 7HATELSEWOULDYOUSAYABOUTSOMEONEWHOSAVES for economy irresponsible 'JOBODJBM YOUTHOUSANDSOFDOLLARSONTAXES HELPSYOURECRUIT 1MBOOJOH By Marshall Campbell By Jim Barrett THEPERFECTEXECUTIVEFORYOURCOMPANY TRAINSYOUR A serious problem facing Proponents of the Educational EMPLOYEESTOBUILDPROFITABLECUSTOMERRELATIONSHIPS Michigan today is identifying a Funding Guarantee, also known long-term strategy that will im- as the K-16 proposal — led by the ANDHELPSYOUPLANFORAPROSPEROUSFUTURE .OTTO prove the economy of our state. Michigan Education Associa- MENTIONSOMEONEWHOKNOWSYOURKIDSANDPETSBY Business experts universally tion, the Michigan Federation of *O.FUSP NAME KNOWSIFYOULOVESUSHIORHATEITANDHELPED agree one of the most effective Teachers and other public educa- %FUSPJU tools we can employ to correct tion-related organizations — say YOUPICKOUTYOURLASTCAR WHICHYOUALSOLOVE our economic problems is to their plan is “for education.” The )FWERENOTTALKINGABOUTYOURACCOUNTANT MAYBE properly invest in our education- Coalition to Stop the K-16 Spend- /FX,JOH4U al systems. Quality schools will ing Mandate, an alliance of more 4VJUF YOUSHOULDBETALKINGTOUS7EDLOVETOGETTO produce a competitive workforce than 57 taxpayer, local govern- 5SPZ KNOWYOU #OMEVISITUSATWWWREHMANNCOM for Michigan’s future. ment, law enforcement, health Voting for the Educational care and human-service organi- Funding Guarantee, also known zations — all of whom support as the K-16 proposal, offers a real adequate funding for education opportunity to turn Michigan’s — disagrees. economy around by significantly Let’s be clear. The proposal, investing in the quality of our ed- which provides for automatic, ucational systems. annual, inflationary increases in State support for Michigan’s school funding, is not about edu- public universities has been cut cation quality. Nowhere in the by hundreds of millions of dol- 974-word proposal is there any lars over the past few years, and mention of education improve- our K-12 schools are continually ment, student achievement or forced to cut basic programs. The higher standards. More than two- deterioration of funding is thirds of the funding is ear- threatening the viability of marked for teacher’s pensions. Michigan’s entire K-16 public ed- The proposal gives Michigan’s ucational system. public-education establishment We are all aware the days of the ability to circumvent the leg- walking out of high school and islative and appropriations finding a good job in Michigan’s process and have their funding auto plants are over. We are com- put on autopilot with no account- peting for good jobs in a world ability to taxpayers, the Legisla- economy. Investing in public ed- ture or governor. That’s irre- ucation now to secure a brighter sponsible and bad public policy. economic future for Michigan is The K-16 proposal is costly, good public policy. too. The nonpartisan Senate Fis- Microsoft CEO Bill Gates re- cal Agency has estimated that, if cently told the National Council of passed, it will cost the state at State Legislatures that a vibrant least $565 million more per year K-16 education system is the key to fund. That’s beyond the educa- to attracting businesses to a state, tion budgets our Legislature and and that a better education means governor just approved for fiscal higher earnings and the creation year 2006-2007. And each year, in- of more high-paying jobs. CEOs flation-based increases would be further agree the presence of a given to public education regard- quality K-16 public educational less of performance. system is the most important fac- Passage will result in only two tor in the survival of manufactur- options: cuts to other critical ser- ers in Michigan. vices, such as police and fire pro- Employers looking to locate or tection, or tax increases, or both. expand businesses in Michigan Supporters of the K-16 propos- want to know they will have ac- al claim the Legislature could cess to a well-educated and tal- simply change the automatic ented labor force. The people of funding increases, if necessary. Michigan deserve a workforce What they don’t tell you, howev- that is prepared to face tomor- er, is that such an effort would re- row’s challenges and create op- quire a three-quarter vote in portunities for economic growth both houses — a challenging feat. and prosperity. Adequate education funding is A yes vote in November is a important. Unfortunately, the pro- critical economic decision and a posal is irresponsible. Voters major step forward in support- should reject this money grab by ing business and economic devel- education unions and administra- opment. tors. Marshall Jim Barrett Campbell is is president president of and CEO of the Citizens First Michigan Bancorp in Chamber of Port Huron. Commerce. DETROIT BUSINESS MAIN 10-09-06 A 20,21 CDB 10/5/2006 4:38 PM Page 2

October 9, 2006 CRAIN’S DETROIT BUSINESS Page 21

FOCUS:ELECTION GUIDE

Our government has been cor- sure women and minorities are treat- Proposal 2: Pro: Rewards rupted by an effort to achieve arbi- Con: Would close ed fairly when buying homes and ap- trary racial quotas. U.S. businesses plying for loans. In California, law- Affirmative have been successful rewarding suits were filed to end state funding the best hard-working innovators, not by doors for many for battered women shelters and commissioning contractors that breast, prostate and cervical cancer Action By Michael Smith look a certain way. By Paul Hillegonds screenings after a similar law was The reason I am voting yes on Opponents of the proposal make Michigan this fall will decide passed. This proposal would the Michigan Civil Rights Initia- absurd claims about the conse- whether it wants to continue to have Republicans Dick DeVos and amend the state tive is simple: It reflects the Ameri- quences of treating people equally doors open to opportunity for women Michael Bouchard, along with Gov. constitution to ban can dream and reaffirms a commit- before the law. They claim that and people of color, or roll back the Jennifer Granholm and U.S. Sen. Deb- public institutions from ment to the values in the 1964 Civil equal opportunity will decrease progress we have made in addressing bie Stabenow all oppose the amend- using affirmative Michigan’s global market competi- Rights Act. Everyone should have discrimination. ment. They are joined by a coalition of action programs that tiveness. How can employing the an equal opportunity in business The Michigan Civil Rights Initia- more than 200 organizations, includ- give preferential and the most qualified individuals best applicants, acquiring the best tive, an amendment to our state’s con- ing the Detroit Regional Chamber, treatment to groups or contracts and ensuring the very will succeed regardless of their stitution, would immediately elimi- individuals based on best college graduates hurt Michi- American Arab Chamber of Com- race or skin color. Michiganders nate affirmative-action policies in their race, gender, gan businesses? merce, Michigan Hispanic Chamber should demand fairness and equal- state and local governments, banning color, ethnicity or ity in state hiring, employment and Passing the Michigan Civil of Commerce, Detroit Renaissance use of the best tool we have in achiev- national origin for contracting. Rights Initiative will vastly im- Inc., Booker T. Washington Business ing equal opportunity. public employment, Business is about productivity, prove our state. In California, a Association, National Association of Businesses have embraced affirma- education or innovation and competition for nearly identical initiative passed Women Business Owners. Also oppos- tive action, recognizing the impor- contracting purposes. capital and consumers. For a com- in 1996. The taxpayer savings in ing the amendment are chambers of tance of having a diverse workforce to Also would prohibit pany to be competitive and to sur- public contracting is as much as 6 commerce in Grand Rapids, Lansing compete in today’s marketplace. Busi- public institutions from vive, employees must be qualified percent. Michigan can benefit from and Holland, as well as labor organi- ness leaders often ask that govern- discriminating against and capable. Companies should not greater efficiency and savings. The zations and religious leaders such as groups or individuals ment run like a business. But now be forced to sacrifice productivity time has come to judge people by Cardinal Adam Maida and Rev. Wen- due to their gender, Ward Connerly, a Californian, pro- to meet hiring quotas. the content of their character, not dell Anthony. ethnicity, race, color or For too long, in order to secure poses to prohibit government from us- the color of their skin. Achieve- We all believe Michigan should con- national origin. government contracts, private ing the tools businesses use to re- ment and responsibility are at the tinue to move forward and not roll companies have been forced to spond to market needs. heart of business. The same philos- back progress, and will be voting no comply with some bureaucrat’s Proposal 2 is just too extreme, ophy should be reflected in our on this proposal. idea of the preferred physical at- rolling back the positive steps Michi- government. Paul Hillegonds is senior vice presi- tributes. Instead of commissioning gan has made in addressing the in- dent of corporate af- the lowest bidder, our government Michael Smith equities faced by women and people of fairs and communi- relies on physical traits including is owner of Smith color. The amendment would elimi- cations at DTE race, gender, national origin and Recruiting in nate high school programs aimed at Energy Co. in De- skin color when making hiring de- West Bloomfield girls and minorities that encourage troit. Hillegonds is cisions. This is wrong. In America Township. them to enter math and science ca- steering committee everyone deserves an equal oppor- reers. It would prohibit the creation of co-chair of One Unit- tunity. housing and lending programs to en- ed Michigan.

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Page 22 CRAIN’S DETROIT BUSINESS October 9, 2006

FOCUS:ELECTION GUIDE Proposal 4: Eminent domain The amendment would prohibit market value. Requires government government from taking private that takes a private property to property for transfer to another demonstrate that the taking is for a private individual or business for public use; if taken to eliminate purposes of economic development J High Yield blight, requires a higher standard of or increasing tax revenue. Provides that if an individual’s principal proof to demonstrate that the taking residence is taken by government for of that property is for a public use. public use, the individual must be Preserves existing rights of property J Great liquidity paid at least 125% of property’s fair owners. Pro: Protects Con: Owners Pick any two property from are already government protected Introducing By Bill Nabers By James Lancaster

High Yield Checking This Election Day, Michigan A perception has been created voters will have the opportunity that Michigan municipalities ar- % to enshrine in the state’s consti- bitrarily and irresponsibly take 5.32 APY* tution rights that will protect property through condemnation families from having their prop- and give it to private developers. at the $1,000,000+ deposit level erty taken and turned over to a I have been practicing in this private developer to make a area for more than 15 years and Yes, the rate makes it look like a high yield buck. can tell you this is not true. money market. But make no mistake about it, The eminent domain proposal Voters in November will be this checking account is indexed to the 30-day restores home owners’ rights by asked to approve a constitutional amendment on eminent domain LIBOR. So it offers you both the liquidity you amending the Michigan Consti- to address a problem that does tution to prohibit local and state want, and the kind of rates you demand. not exist: the indiscriminate tak- government from citing the ben- ing of property by government efits of so called “economic de- for economic-development pur- velopment” or increasing tax Interest Rate/Structure poses. revenue as the justification for Calculated daily on any balance, This proposed amendment is using eminent domain to take Paid monthly, Tiered structure: Convenience you can count on. part of a national movement re- someone’s home or property. $1,000,000+ = LIBOR† (5.32% APY) acting to a recent U.S. Supreme The proposal also requires any Court decision, Kelo v. New Lon- $100,000-$999,999 = LIBOR less 0.50% government that takes a person’s $50,000-$99,999 = LIBOR less 1.00% don, in which the court upheld home for a public use such as a $25,000-$49,999 = LIBOR less 1.50% the right of states to take proper- road or school must pay the $0-$24,999 = 0.50% APY ty for economic-development property owner 125 percent of purposes. † Rates will normally adjust on the first business day of each month, fair-market value and requires a (800) 642-0039 www.flagstar.com Although this decision was re- based on the 30-day London Interbank Offered Rate (LIBOR) on the higher standard of proof to de- ported in the popular press as be- last business day of the previous month. All APYs are accurate as of Member FDIC 10/2/06. clare a property as “blighted.” ing a landmark, it was nothing The U.S. Supreme Court said more than a reaffirmation of *Annual Percentage Yield (APY) based on current 30-day LIBOR of 5.32% applies to accounts of $1,000,000+ and is accurate as of 10/2/06. Minimum initial government may use eminent what the law had been already. deposit to open account is $50; maximum allowable balance is $10 million. Account fees could reduce earnings. A fee of $25 will be imposed for every statement domain to force a property own- Nevertheless, two years earli- cycle in which the balance in the account falls below $5,000 on any day of the cycle. Rates may change after the account is opened. Not available for businesses er, the Michigan Supreme Court or public units. Other restrictions may apply. er to sell his or her home so it can be turned over to a develop- had concluded that under Michi- er. gan law, government has more We are not talking about tak- limited condemnation powers — ing your property to build a road a decision squarely on the side of or a school; we’re talking about property-rights advocates. Kelo kicking Grandma and Grandpa acknowledged the validity of this decision. out so someone can put in a strip Vote for this proposal only if mall. you want to further tie the hands Only a change in the Michigan of local governments when it Constitution will protect the comes to redevelopment. rights of property owners and This amendment would pro- make sure that government does hibit any condemnation for eco- not abuse the power of eminent nomic-development purposes. domain. It would also make it more dif- Unfortunately, it is the poor ficult to eliminate blight by re- and elderly who are dispropor- quiring the government to prove tionately affected by eminent do- the existence of blight by “clear main. and convincing” evidence. They lack the resources to Economic development in this challenge such determinations state is difficult enough. and they are more likely to live Local governments already in areas being considered for face numerous roadblocks that new development. safeguard property-owners’ This proposal will protect rights. them — and all of us — from be- This proposal would further ing forced from our homes, and hurt the ability of state and local it will set strong but sensible re- governments to redevelop prop- strictions on how and when gov- erty, particularly in our urban ernment may use eminent do- core communities. main. James Lan- Bill Nabers caster is a prin- is a broker at cipal in the Riverpointe Lansing office Realty Co. Inc. of the law firm in Detroit. Miller, Can- field, Paddock and Stone plc.