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Caroline MacGregor: This is 89.1 WEMU, and it's time for our monthly look at the business community in Washtenaw County. I'm Caroline MacGregor, and welcome to Washtenaw Business Lens. Each month, we partner with the Ann Arbor/Ypsilanti Regional Chamber to look at how the news of the day impacts the local business community. Andy LaBarre is Executive Vice President and Director of Government Relations for the Chamber, and he's part of each month's conversation. Thank you for joining us again, Andy!
Andy LaBarre: Caroline, it's good to be with you! Happy to chat!
Caroline MacGregor: Today, we want to take a look at how the midterm elections may affect small businesses right here in Washtenaw County. And to help us navigate this is Kirk Profit. He's a former state legislator. He's also a former legal adviser and Undersheriff in the Washtennaw County Sheriff's Department. Profit was an adjunct professor at Eastern Michigan University, where he earned degrees in philosophy and political science and a Juris Doctor from the University of Detroit Mercy. This year, he was appointed by Governor Gretchen Whitmer to serve as one of two new members to the Eastern Michigan University Board of Regents, and his term begins in January. Thank you so much for joining us today, Kirk!
Kirk Profit: Well, thank you for the opportunity, and it's great to see you! I haven't seen your new surroundings and operation center here, and it is really nice.
Caroline MacGregor: It's quite a change, isn't it?
Kirk Profit: Yeah, it's very nice! Yeah, the old...I think it was King Hall.
Caroline MacGregor: Yes, exactly. Yeah, quite a difference!
Kirk Profit: Yes!
Caroline MacGregor: Yeah, we're very happy to be in these state-of-the-art studios!
Kirk Profit: Yeah, it's very nice!
Caroline MacGregor: So, today, we are going to be talking about the recent midterm elections and their impact on local businesses here in Washtenaw County. Kirk, maybe you could just give me a sort of an overview. You know, obviously, coming out of this election, we've had a lot of voter concern about costs. And Michigan businesses, of course, are dealing with this reality every day. Tell us a little bit about what you think we're going to see. I mean, obviously, it's going to take time to see some changes.
Kirk Profit: Well, I'm excited because we have new leadership in the House and Senate, in the Governor's office, Secretary of State, Attorney General. And I think with new leadership, it gives a moment in time to see where we're at and see where need to go. And one of the things I do in this new life that I have is chair this thing called Michigan Future, which has been tracking Michigan data for about 30, 35 years. A guy named Lou Glazer has run it for that time. And the data is crystal clear under multiple leadership teams and different activities by state and regional leadership. The trajectory in Michigan has not been good. We are now in the bottom 10% of per capita income in the country, significantly less than our Midwest competitors, and we have a significantly diminished number of four-year degrees attained by our residents.
Caroline MacGregor: Which is somewhat shocking!
Kirk Profit: Yeah. We did some polling data, and most people in Michigan think that we're about average. We are not average. We are way below average in per capita income and four-year degrees attained. And those are probably the primary factor in the quality of life and per capita income is post-secondary education, so you draw it to this community. We are specifically and specially positioned to do well because talent attracts capital. I mean, for a long time, for multiple leadership teams in Michigan, they've kind of pursued the reverse of trying to draw capital in an effort to attract talent, and they've had it backwards. Talent attracts capital.
Caroline MacGregor: Right.
Kirk Profit: And it's one of the things that we have especially great strength in this area with two four-year degree institutions, public institutions, historically some privates, Washtenaw Community College is hitting it on all cylinders. So, we are well-positioned with talent in our community, and we need to exploit that.
Caroline MacGregor: One of the questions I have there. Obviously the University of Michigan, and you talked about Washtenaw Community College, their numbers, they seem to be doing well. But Eastern Michigan University has seen quite a decline in enrollment. What can be done to improve this area? And, of course, you're coming on as regent in January.
Kirk Profit: Well, I'm looking forward to taking that role. I've been an Eastern enthusiast. We moved here in 1954 when I was two years old, so I've be hanging around on campus. My dad was a VP here for a number of years. And so, I been hanging around campus for life. I actually went to grade school at Roosevelt School in the Roosevelt building. And so, I have a passion for Eastern, and I was thrilled when she appointed me, but I told the Governor and her staff, "Listen, if I go, understand. It's for me. It's all about enrollment and graduation," because Eastern's revenue sources have been diminished to such a point where the only revenue source that we really have left is tuition. State aid is insufficient. Other revenue sources, like the food service and housing and other things like that, have been sold. So, all we have left this tuition. We need enrollment. And it's interesting because I talked earlier about talent attracting capital and that sort of thing. We have capacity here. We can be part of the state's solution to this bad trajectory. In fact, if we're at 10, 11, 12,000 students right now and we're better, we have capacity for another five or 6,000 or more. For my purposes, I plan to be all in on whatever encourages enrollment and completion. That's where I'm going to be.
Caroline MacGregor: Andy, how do you feel on this? I mean, obviously, the talent is very important, but businesses here in Michigan, of course, should expect competitiveness to be even more of what's an important conversation moving forward.
Andy LaBarre: Yeah, I think a few things. When you have a wave election like we did this year, it reminds me a lot of 2010 and 2006, in terms of non-presidential, midterm, impactful elections. That means the coalition of legislators at the state and federal level are broad in the communities they represent and are going to have to find sort of unified productive outcomes to demonstrate to voters. I think, for businesses, this is a window particularly in Lansing with one-party control, where there will be a lot of action quickly. And I think education is one of those sort of bread-and-butter issues where businesses and residents in the state of Michigan both need similar things, which is more and better outcomes for our people--people in terms of the kids and residents that are growing up here, and also the workforce, not just of tomorrow, but right now. And I think Kirk is exactly right, that those are going to be areas where this new administration in Lansing wants to show effectiveness. Those are going to be areas where the new legislative delegations are going to want to show outcomes, return on investment from voters, selection of them in last week's election. And so, I think that, combined with other issues that can quickly address cost of living items, you will see a legislative flurry. What I don't know is how will that all turn out? What I do know is if you are a small business in the state of Michigan, particularly in Washtenaw County, now is the time to pay attention, now is the to get to know who is going to be in those leadership roles, particularly at Lansing, and now is time to articulate what you need immediately, in terms of those cost of living issues.
Caroline MacGregor: And on that note, Kirk, small businesses have been watching everything from rent to insurance to energy supplies. I mean, they are severely affected by the economy. What does this mean as far as the pressure in Lansing to come up with solutions?
Kirk Profit: Well, again, I think the way home, the way forward, is through talent development. You know, you look just to the west here in Ann Arbor, I think most people would say that the regulatory and tax climate in Ann arbor is not particularly attractive, but you can make a lot of money and businesses flock to Ann Arbor because of the talent rich community.
Caroline MacGregor: Right.
Kirk Profit: And, actually, the second thing is there's two things that you need to attract business. One, you need talent that they can make money with. And the second thing is you need placemaking, places where people want tolive. Ann Arbor has that, and we need to spread that throughout the county where we have great places to live, and we have a great talent available for businesses to use. Those are the two keys for me. And again, I'm drawing directly from Michigan Future on that. But it's been clearly these success stories in other states. You cannot really cut enough taxes or do that sort of thing to get home with what you hope to achieve with your quality of life.
Caroline MacGregor: Now, in the lead-up to the elections, Democrats were discussing things like family leave, tangibles like tax increases to Medicaid, education and government programs, an increase in workers' compensation benefits, things like that. Andy, these are, again, like I said, tangibles that need to be addressed, along with, obviously, attracting talent. Businesses are facing day-to-day costs and concerns like those that I've just mentioned.
Andy LaBarre: Yeah, and that will be, especially at the federal level, the challenge here. The last 18 months, in terms of some of the pace of policy change and the cost impacts of tariff decisions, have put businesses in this spot where they're purely reacting to the increased costs of the world. There's no way around that. I think Kirk is right, though, that communities and states that are going to succeed are going to realize you have to do two things sort of at once. One, address those short-term cost issues as best as you can. Try and make government work quickly to respond to that urgent need. Second, lean in on investments of your people and your places because that's what you're going to stake your mid- and long-term success on. And that's not my original thought. That is looking at the national data and candidly looking internationally to see what economies are succeeding, and it's those economies which are doing those investments in their people and in their environments. How you do all that, Caroline, in a divided government in Washington where you have a president who, let's just say, has not followed the traditional playbook on some things, and you have a big legislative majority with the Democratic Party now that is eager to demonstrate competence and outcome. And where that all leads us, I don't know. I just know it'll probably be quick, and it will be fluid.
Kirk Profit: If I can, Caroline, I'd like to follow up a little bit on the notion of business costs and that sort of thing.
Caroline MacGregor: Absolutely.
Kirk Profit: I think it's important to remember that, under Governor Snyder, the previous Michigan Business Tax, the single business tax, which was the primary business tax, was eliminated and was replaced with the Michigan Business Tax, which is an income-based tax, but it only applies to C-corporations. The primary form of business in Michigan is an LLC, a limited liability company or a partnership or a sub-chapter S corporation, those don't pay any taxes anymore, any business tax. You know, historically, the Legislature and a lot of policymakers have looked to the tax code as, again, the way forward. And we've done a lot in Michigan with the tax code in a business context. Business expenses in Michigan, I'm sure we have listeners who won't agree with me, but are not so oppressive as they are in other states. Utility costs are a bit of a challenge, But the tax code is not a problem for Michigan business. Indeed, of about 130,000, 140,000 businesses in Michigan, close to 100,000 pay no tax.
Caroline MacGregor: What about those small businesses, say, that are related to the auto industry, et cetera, and the whole tariff situation with Canada that President Trump has imposed? That trickles down to the Michigan economy.
Kirk Profit: It does. It does, but the manufacturing base in Michigan has been so diminished. Again, we've had leadership teams that have really targeted the restoration of manufacturing in Michigan. The reality is production jobs don't pay what they used to. Production jobs, typically, in Michigan are 25, 30 bucks an hour, maybe, with diminished benefits. That's 50 or 60 grand a year. You cannot pay rent on those typical current day production jobs.
Caroline MacGregor: Certainly not in the Ann Arbor area.
Kirk Profit: Really anywhere. And again, if you're only making 50 or 60 grand, and you got to pay child care, you probably got a car payment, you're trying to pay rent, you can't get it done with just one job
Caroline MacGregor: It's not easy, no, for are a lot of people, and there are those struggles.
Kirk Profit: I think all that helps to underscore the notion that we have to drive our economic development efforts at talent development. This notion of unbelievable numbers going to manufacturing facilities is outdated and has not been productive.
Andy LaBarre: Caroline, I'm sorry to jump back in, but one area that I think there is a good legislative window to make progress is on childcare. It's an issue that resonates with everyone, regardless of geographic or political location. And it unites business, parents, communities, sort of the whole parts of communities. And I think that there's going to be a lot of pressure to deliver on this issue with this Democratic majority in a way that is tangible and impactful quickly from a pocketbook perspective.
Caroline MacGregor: All right. Is there anything you'd like to add to that, Kirk?
Kirk Profit: I would say maybe we do this again and kind of a high-level policy based approach. I think it translates into some specific activities for our local and regional leadership that we need to help them pursue.
Caroline MacGregor: Kirk Profit, thank you so much for your time today! It's been great to hear from you and to tap into your expertise!
Kirk Profit: Thank you! Appreciate the opportunity! Looking forward to being supportive in my new role as a regent of WEMU!
Caroline MacGregor: And we're looking forward to having you! That is Kirk Profit. He is the former member of the Michigan House of Representatives. He's been our guest today on Washtenaw Business Lens. This regular conversation series is brought to you in partnership with the Ann Arbor/Ypsilanti Regional Chamber. And of course, each month, we also hear from the Chamber's Executive Vice President and Director of Government Relations, Andy LaBarre. Andy, thanks for being here!
Andy LaBarre: Caroline, thank you for having me! Great to be with you!
Caroline MacGregor: I'm Caroline MacGregor, and for more information on Washtenaw Business Lens and today's topic, stop by our website at WEMU.org. This is your community NPR station, 89.1 WEMU.
ABOUT KIRK PROFIT:
Kirk Profit, of Ann Arbor, is a former state legislator and the former co-owner of Governmental Consulting Services, Inc. Profit holds a Bachelor of Science in philosophy and political science from Eastern Michigan University and a Juris Doctor from the University of Detroit Mercy.
Kirk Profit will be appointed for a term commencing January 1, 2027, and expiring December 31, 2034. Profit will succeed Chad Newton, whose term will expire.
ABOUT ANDY LABARRE:
Andy LaBarre was first elected to the Washtenaw County Board of Commissioners in 2012, representing District 7, located in the eastern half of the city of Ann Arbor. Andy is a proud Democrat. He served as vice chair of the Board of Commissioners and previously served as chair of the Board (2017-18), chair of the Ways and Means Committee (2015-16), and chair of the Working Session Committee (2013-14). Andy lives in northern Ann Arbor with his wife Megan (a teacher at Dexter Community Schools), son Declan, daughter Delaney, and dogs Monster and Frankie.
Andy now serves as executive vice president and director of government relations for the Ann Arbor/Ypsilanti Regional Chamber and is Caroline MacGregor's co-host for "Washtenaw Business Lens."
RESOURCES:
Press Release: "Governor Whitmer Makes Appointments to Boards and Commissions"
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