Michigan’s hot economic debate was brought close to home for local business owners and city official Friday.

The St. Joseph County Economic Development Corporation’s annual meeting featured a panel discussion by local politicians and state-wide economic analysts.  The top discussion: replacing Michigan’s single business tax.

“With its elimination set for Dec. 31, we’ve got to come up with some business tax that will improve Michigan’s climate,” said moderator Michael Chevy Castranova, editor of “Business Review.”

How that should be accomplished brought different reactions from panel members.

The tax as it is today dysfunctional and hinders economic growth, State Sen. Cameron Brown said.

“We’re just not able to compete with this structure,” he said.

Both Brown and State Rep. Rick Shaffer said more state-wide debate needs to be done about Gov. Jennifer Granholm’s plan for a new tax.  Brown predicts some kind of “hybrid” of her plan and other will come in the end.  The key priority is creating a tax that’s simple, fair, stable, competitive and growth-generating, Brown said.

“No state has followed our lead,” Brown said of the current tax that was started in 1975.  “So it’s an oddity.  It’s an oddity mostly due to its complexity.”

‘One horse town’

Michigan’s economy will need more then a new tax to improve, said panelist George Erickcek, senior regional analyst of the W.E. Upjohn Institute.

“We are a one-horse town with a sick pony,” Erickcek said.  “The auto industry is just not doing well in the of Michigan.  The single business tax is not what caused us to get in this problem so (a different tax) will probably not help us get out.”

One audience question addresses a fair tax plan, that would be a consumer-driven tax which eliminates personal income tax and property tax, raising sales tax.

Shaffer said that debate will be all over Michigan in the next two years.

Robert McDonough, vice chair of the Michigan Chamber of Commerce Board of Directors, said it’s the personal property tax-not necessarily the single business tax- that’s hurting big business.

Beyond the borders

Many on the panel agreed that Michigan needs to think out of it borders. John Llewellyn, vice president of government relations for the Michigan Bank Association, said people have to remember that things are different than they were years ago.

“We engaging in a different world,” he said.  “Things are moving much more quickly and we’re competing with people we’ve never seen before… we can’t afford to be separate any longer.”

Keynote speaker Al Pscholk, district representative for U.S. Congressman Fred Upton, told the audience of a family who moved from Michigan to Georgia, where traffic and the cost of living is high.  He said” displaced Michiganians” want to come back home and it’s up to all parts of the state to work together to bring them back through a good economic climate.

“Why do they come back?  It’s because this is a great place to raise a family and this is what we need to focus on when we look at economic development,” Pscholka said.

The panel ended the discussion by encouraging the audience to get involved.