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1) Rep. Hoogendyk's "no vote explanation" [by Admin003 on November 11, 2005]Rep. Hoogendyk, having reserved the right to explain his protest against the passage of the bill, made the following statement:
"Mr. Speaker and members of the House:
IF WE ARE GOING TO SECURITIZE TOBACCO SETTLEMENT DOLLARS, WE SHOULD USE THEM TO GIVE IMMEDIATE TAX RELIEF TO THE WORKING FAMILIES AND BUSINESSES OF MICHIGAN. WE SHOULD NOT TRUST A BOARD OF EXPERTS TO DOLE OUT DOLLARS AND PICK THE WINNERS AND LOSERS OF OVER $400 MILLION IN SECURITIZED FUNDS."
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Senator Brown's statement is as follows:
I rise in support of the package before us. In doing so, I briefly just want to say that, of course, we must all appreciate the risk involved in leveraging securitized tobacco settlement dollars for the sake of job creation. Like the future of the economy itself, there is certainly uncertainty, but it is important, Mr.President, to keep one point of perspective in mind, and that point was emphasized by a previous speaker. To be sure, we are using taxpayers' dollars, yes, but these are not tax dollars. They are dollars that have come to this state through settlement, and because of that, we have more discretionary use of this money than if they were tax dollars collected from taxpayers.
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Senator Sikkema's statement is as follows:
Since this is the last bill in this package, I want to offer my comments. I urge the members to pass it, and I'll explain why I'm supporting this enthusiastically.
With the passage of this package of bills, in my opinion, Michigan is making a major step forward in helping to diversify our economy. I think we're taking a major step forward in recognizing that Michigan's economic future and jobs future is going to look very different from our economic past in that we're taking a major step forward, frankly, in helping to change the economic culture of this state.
Now, a lot of the discussion, both on this floor and in committee and inside meetings, has been over the securitization--and I still stumble over that word--of a portion of the tobacco settlement that's due Michigan. It's an important discussion. There are different opinions on whether we ought to do that, but we shouldn't lose sight of the fact that that's the financing mechanism of a very comprehensive economic diversification package, and that's really the meat and potatoes of this package before us. It is very comprehensive. We're making a major step in creating more incentives to attract venture capital in this state by changing the Michigan Venture Fund, something this chamber started a couple of years ago. We're creating what's called a commercial pipeline for life sciences, which is a fancy way of saying a lot of states are doing basic research, but if you really want jobs and you really want companies coming out of life sciences research, you want to be the place in America for commercialization of that research. This life sciences pipeline concept hopefully will do that. It will make Michigan the place in America for products and drugs that need FDA approval. They can come here to go through that commercial pipeline to get that approval.
There's a bill in this package that we call angel investing. It's basically an incentive for wealthy individuals to commit some of their wealth to somewhat risky ventures here in Michigan, and the incentive is if you make money on that investment, we want you to roll that gain over and make similar investments in Michigan. That's part of this package--a critical piece.
Part of this package is a recognition that right now in Michigan, when a company expands by selling shares to get money to build and expand in this state, our franchise fees are onerous. There's a bill in this package to reduce those franchise fees so that doesn't happen. So that's not a barrier for economic growth.
There's a recognition in this package that we need jobs and expansion all across this state, not just in what I call the metropolitan or southern belt. That's important--that's where I'm from--but in rural Michigan and northern Michigan and the Upper Peninsula, we need job creation and expansion there. There's a deep recognition in this package with the Forest Development Authority and the Agriculture Development Fund and the commitment to tourism that they have to be part of our future as well.
There are pluses and minuses to doing this by committing some of our tobacco settlement versus a general obligation bond, which the Senate originally passed in June, but one of the advantages of doing it this way is that we can do it quickly. We can pass this bill. We can commit money virtually immediately to the various parts of this package, and I think that's an upside to this. There's a commitment. Again, we had this in the past, budget difficulties made us abandon this, but there's a commitment to recreate the capital access program, which is basically a program for the state to back up decisions banks make to loan to small companies that might be a little riskier than what they're used to making loans to.
I don't want members to lose sight of how comprehensive this economic diversification plan really is, and I am compelled to put this in some context. We're committing, in essence, a portion--about a third--of the tobacco settlement money that we get on an annual basis to this very comprehensive economic diversification plan. You know, it's not long ago--six years, in fact--where Governor John Engler said, "I want you to commit a portion of the tobacco settlement money--$50 million a year for 20 years--interestingly $1 billion--purely to do basic research in life sciences as an economic diversification plan." Now, I supported that. I thought it was a wise decision, but put this in some context. That Governor and the Legislature adopted it. We were willing to commit $50 million a year to life sciences just to do basic research with no commitment and no emphasis on job creation. This plan commits a little bit more of the tobacco settlement money--between $70 million and $90 million a year--to do a much broader, comprehensive job diversification plan/economic diversification plan that's focused on job creation in the new economy.
I've heard comments about government shouldn't pick winners and losers. I appreciate that, but it reminds me of something that occurred in the early '90s. A former Majority Leader, who happened to be John Engler, ran for Governor and basically said the same thing. I applauded him at the time. Government shouldn't create winners and losers. He opposed any tax abatement plans in Michigan. He got elected Governor. Four years later, he proposed the creation of what is now called the MEGA credits, specifically-focused tax abatements for specific companies. Now, some of us at the time almost fell off our chairs. In fact, I want to relate an anecdote. I was in a leadership position in the House when he proposed it. I went to a legislative conference in Washington, D.C., where I had colleagues from all across the country. President Clinton was President. Robert Reisch was Secretary of Labor. Robert Reisch came in to speak to this group of legislators from all over America--from almost every state--and he gave a speech bemoaning these tax abatement plans that states had, saying how they were bad. I was feeling pretty good because I was going to come back to Michigan and challenge John Engler and say, "We shouldn't do this." Then, at the end of his speech, he said, "By the way, how many of you states have one of those?" Every state raised their hand except me, and why was that? And why did John Engler propose, after he was critical of that kind of strategy, that? Because, at the time, we were losing our shirt to other states that had that arrow in their quiver. It's not a be-all and end-all. It does have some problems, but John Engler recognized--and I voted for it eventually--that you need a lot of arrows in the quiver or a lot of tools in the toolbox.
Now, let me say that this plan, which I support and am convinced can help the economic future of this state, is not complete. Something is missing from this plan and that something is a significant tax cut for Michigan businesses. That has to be a piece of our economic future if we're really serious about doing what needs to be done to reposition this state for economic growth. I am going to ask this Senate, within a matter of days, to pass a business tax cut.
Something else is missing from this plan. We do need to focus on education, both higher education and K-12. I hope that some time in the near future--I won't say days; maybe it's a couple of weeks--but I hope that the Senate can look at our scholarship programs in Michigan and actually expand, not restrict, our scholarship programs. I have been critical of proposals from this Governor that have been designed to sort of eliminate some of our scholarship programs. I take the opposite approach. I think you need to expand the scholarship offer.
Is this a perfect plan? It's not a perfect plan. It's got some downsides. Other things have to be done that I've mentioned, but I think it's time for this state to take some what I will call prudent risks to help change the economic culture of this state because the restructuring that's going on is not a temporary restructuring. It is a permanent restructuring, and it is high time that we get ahead of that curve.
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