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Monday, March 06, 2006

New Survey: Michigan Ranks Low Among New Economy Executives

LANSING - Executives at new economy businesses so coveted by Michigan view the state as having a more favorable tax climate than others in the survey, but rank Michigan near the bottom as a hospitable place to do business because of a less educated workforce, a new poll shows.

The poll commissioned by Western Michigan University and done by Lansing's EPIC/MRA, surveyed 1,181 executives in Michigan, Ohio, Illinois, Massachusetts and California. The overall sample put California as the state most conducive to so-called new economy technology businesses, despite it having a perceived tax climate as below average, while Michigan placed fourth just ahead of Ohio.

Life sciences was identified as a potential asset for Michigan (28 percent said the state can become a player in that field), and they said life sciences can best be nurtured with start-up money and tax breaks (31 percent and 24 percent, respectively).

"For many of the traits that attract new economy businesses, Michigan is seen as only average by those in competitor states," said WMU President Judith Bailey. "As a state, we now need to shift our focus and build on those resources in a way that lets the rest of the country know we've made a commitment to becoming a powerhouse in the new economy."

Michigan was viewed as having a below average tax climate by 19 percent of those polled, while 54 percent said they viewed it as average, better than perceptions of either California or Massachusetts, but those states were still seen as better states for technology businesses.

Taxes remain in the forefront of political discourse on improving the state's economy, with Republican legislators pushing new breaks for small businesses and a move for an initiated law to repeal the Single Business Tax. The National Tax Foundation this year lists Michigan as 26th among all states in its annual State Business Tax Climate Index survey, but the state falls to 49th when only business taxes are considered.

The overall group of executives surveyed gave nearly equal weight to taxes and an educated work force: 51 percent said favorable state tax laws are "very important" to making a state or region conducive to so-called new economy businesses; 50 percent said an educated work force is "very important."

The survey showed some differences among the executives questioned in Michigan, and those in other states: the Michigan business leaders gave more emphasis to low taxes and it was the only state of the five to give taxes an edge over work force.

Among all respondents, 72 percent gave above average or very important rankings to a state having a well-educated work force; among the Michigan executives, that measure was identified by 52 percent of those polled. Among the entire sample, a favorable tax climate was cited by 68 percent as being above average or very important; for the Michigan executives, that category was cited by 60 percent.

The overall margin of error for the poll was 3 percent, and for data in each of the individual states the margin was listed as 6.9 percent.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

Author: Staff Writer
Source: Gongwer News Service

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