LANSING ? Barry Cargill, Vice President for Government Relations at the Small Business Association of Michigan, gave the 2004 Michigan Legislature a grade of C for its failure to restore Michigan?s fiscal solvency.

?And that?s probably being generous,? Cargill said. ?They evaded the tough decisions on cutting the budget and instead served up a stew of tax hikes and accounting gimmicks. Our fiscal problems have simply been deferred to next year in the hopes that the economy will pick up and bring in more tax revenue.

?Well, next year is almost here and Michigan again faces a budget deficit,?? he said. ?By failing to cut spending when they had the chance, lawmakers unnecessarily delayed the day of reckoning and have made the resolution of our budget problems that much more difficult.?

The avoidance of spending cuts flies in the face of the wishes of most small business owners, Cargill said. Sixty-eight percent of small business owners in SBAM?s latest quarterly Barometer survey chose spending cuts when given a choice between spending cuts or tax and fee increases as a means of addressing Michigan?s budget deficit. Only nine percent favored tax and fee increases. Support was strongest for cuts in general government operations, transportation, public assistance and revenue sharing with local government.

SBAM, Cargill said, is concerned that talk by some policymakers of enacting tax reform is actually setting the stage for a tax increase in 2005.

?So-called tax reform at the same time we are trying to control spending and eliminate a budget deficit is simply poor timing,?? he said. ?Any potential tax reform should be aimed at not simply increasing revenue for the state, but positioning Michigan companies and businesses to compete in growing world markets and encourage an entrepreneurial economy and job creation.?

SBAM was also disappointed that the legislature did not take a strong stand in support of the rule-making authority of the Michigan Public Service Commission.

?In order for small business to thrive in the future, we need a highly competitive electricity and telecommunications market,?? he said. ?Too often, the legislature was timid in backing the regulatory authority of the commission to foster a more competitive environment.?

On the other hand, Cargill says lawmakers deserve credit for passing during 2004 elements of Single Business Tax (SBT) relief, such as an SBT jobs credit and a research-and-development SBT credit. ?Sen. Sikkema?s leadership, in particular, contributed to developing a proactive jobs agenda that is good for the Michigan economy.?

Looking toward 2005, there?s reason to hope that the legislature will be more focused on the needs of the small business community. An SBAM election analysis finds that next year?s state House will feature significantly more lawmakers who are small business owners or have a small business background. SBAM calculates that 47 out of 110 state representatives next year will come from small business, compared to 41 in the last previous legislature. Twenty-one of the 36 lawmakers elected on Nov. 2 have small business roots.

?We look forward to working with new House Speaker Craig DeRoche and these new lawmakers in developing a positive agenda for the small business community,? Cargill said. SBAM looks forward to a more productive legislative session in 2005.

SBAM?s 2005 legislative priorities for promoting economic development are:

Tax Reform – Any potential tax reform must encourage the growth of the Michigan small business economy;

State Budget – Cut spending before raising taxes; Health Care – Contain the rising cost of health care;

Telecommunications – Sustain a competitive telecommunications market for all customers;

Alternative Electricity – Build a competitive electric market for all customers;

Manufacturing and New Industries – Foster the development of advanced manufacturing and breakthrough technologies and products to support the development of new industries and manufacturing in Michigan;

Education- Promote entrepreneurial education and prepare graduates to match the employment skill and training needs of Michigan companies to be competitive in an ever changing global market;

Tourism – Promote Michigan?s natural resource environment to support small business;.

Reduce Unnecessary Government Regulations.

To learn more about SBAM, click on SBAM.Org