.cadillac buildings-detroit. by tEdGuY49®

Note: they have a special "no frills" registration for $100 - amazing deal!

Detroit will host the Creative Cities Summit 2.0 (CCS2) on October 12-15, 2008 at the Renaissance Center. CCS2 is an interdisciplinary conference on the economic, social, cultural and environmental aspects of what makes great cities.

I could talk on and on about the eye-popping agenda they have created and amazing speakers who will attend - headlined by Dr. Richard Florida, author of Rise of the Creative Class, John Howkins, author of The Creative Economy, and Charles Landry, author of The Creative City. I could muse about how all the attendees from all over the world might influence the conversation about the re-invention of Detroit and Michigan. I could say that if you can't make it during the week, you might want to check out the Unconference on Sunday @ MOCAD.

However, I think it'll be enough to ask you to watch the videos in our Creative Cities 2.0 playlist below (including a little Detroit easter egg) and tell you to register now! See you there!

Hands at Work by detroitsky

Tim Pulice's Pulice Report blog has announced the Arresting Site of the Month for May 2008. The inaugural selection is Michigan Innovators and Tim writes:

I first ran across this terrific online destination last summer, which dovetails perfectly with the spirit of this blog, wherein I look to spotlight Michiganders who display creative zeal. Bud Gibson is doing just that. Along with Diana Wong – who now is in an advisory role – Gibson founded the site in June of 2007, and has compiled an impressive archive of video interviews with business and community leaders across the state, including MicroMax's Rachel McCormack, the Ann Arbor Film Festival’s Donald Harrison, Metro Parent’s Alyssa Martina, Blight Busters' John George, and many others...

Read on and learn how to submit your favorite Michigan web site or blog.

Capitol, Landing MI by Irina Vasiliu

Below you'll find a news release from Governor Granholm regarding an agreement to add a 21.9% surcharge to the new Michigan Business Tax to replace the 6% Michigan Service Tax.

The Detroit Free Press and Detroit News have details on the agreement as well.

Granholm, State Lawmakers Agree to Replace Service TaxReplacement Helps State's Fiscal Stability

Protects citizens from massive cuts to public safety, health care, education

Governor Jennifer M. Granholm, Lt. Governor John D. Cherry, Jr., Senate Majority Leader Michael D. Bishop, House Speaker Andy Dillon, and Senate Democratic Leader Mark Schauer along with legislative members have agreed to replace the service tax that went into effect at 12:01 a.m. today. Under the agreement, revenue generated by a service tax will be fully replaced by a surcharge on the Michigan Business Tax (MBT).

The State Senate is expected to complete work on the tax package in the early hours of this morning and the State House is expected to approve it later today. Under the agreement businesses will be granted legal protection if they fail to collect the service tax until effective date of the new law.

"This agreement protects health care, public safety and education while replacing revenue from the service tax," said Governor Granholm. "I applaud the members of the business community and the legislators who worked with us to craft this fair and responsible compromise."

Senator Bishop (R-Rochester) offered the following statement: "I appreciate the spirit of compromise to repeal a tax that would have devastated Michigan business. It is only through continued good faith negotiations, compromise and dialog that we can set Michigan on a track for renewed economic prosperity."

"These negotiations were very difficult due to our challenging economic climate, but I am confident that this agreement is a fair compromise that will allow the state to provide the services necessary to support our businesses and attract new businesses to a state that has a tremendous quality of life," said Speaker Dillon (D-Redford Twp.). "I commend Michigan's business community for their willingness to step up and work towards a solution."

"By working with the business community and each other, we reached a compromise that gets rid of the service tax and keeps our promises to fund schools, public safety, and health care," said Senator Schauer (D-Battle Creek). "This is the type of reasonable approach that will protect our priorities and position us for economic growth."

Under the agreement, the replacement for the service tax will phase out under certain economic conditions.

The MBT, which takes effect January 1, provides tax cuts for more than 60 percent of Michigan businesses and provides tax cuts to both small businesses and Michigan's major manufacturers, while encouraging job creation in Michigan.

The MBT helps stimulate Michigan's economy by relying more on profit, providing tax credits to companies that locate or create new jobs in Michigan and tax credits for entrepreneurial and R&D activities. In addition, a significant cut in the personal property tax will help the state's largest employers and commercial businesses.

"With this agreement in place, we can continue working on the economic plan that will help grow our economy and create jobs," said Lt. Governor Cherry.

# # #

Carousel by jnhkrawczyk

"We've got a shift starting in 36 hours that we've got to charge 6% more on ... and I don't know how to do it."
-John Evans, president of Evans Distribution

Welcome to Michigan, where we somehow seem to be stuck in the Reality TV version of Groundhog Day: Your Government inAction. With just hours remaining before a confusing, unexplained and really random 6% Service Tax goes into effect, everyone who might have to pay the tax is watching the clock and wondering what Lansing will do. Read on for much more...

The Freep's Susan Tompor writes that the new 6% service tax is like one of those bad snowstorms that everybody hoped would skip town. Even the forecasters warned that this thing couldn't last long. This oddly crafted tax on services -- 6% on nails but not hair; 6% on ski lift tickets but not golf -- is so dopey that most expected it ultimately had to be repealed.

Over on Michigan Liberal the editor of a major Michigan web site spars with a long-dead Michigan governor over the much-hatedness of the Service Tax.

An article on the Service Tax Impasse the Detroit News looks at business owners preparing for the tax and also at the state of diplomacy in Lansing:

On Detroit talk radio, House Speaker Andy Dillon, D-Redford Township, and Senate Majority Leader Mike Bishop, R-Rochester, pointed fingers at each other for the negotiations breakdown Wednesday over the service tax. The House passed its own plan and then adjourned until Tuesday.

Bishop called "garbage" a House-passed bill that the Senate rejected Wednesday night and chided: "We don't want to let the facts get in the way of the speaker."

Dillon shot back that the so-called "garbage" is backed by a large share of the business community.

Meanwhile, over at the Michigan Treasury, they have posted a disorganized jumble of information about the tax at the top of their page that includes an explanation of services taxed.

Find much more about this issue at 6% of x? Untangling Michigan's Service Tax on Absolute Michigan.

Grand Traverse Resort by danperry.com

Hey there, if you happen to be in the Traverse City area tomorrow (Tuesday, Nov 6) Absolute Michigan will be in the "Tech City" area for the Traverse City Chamber of Commerce Business & Technology Expo from 9 - 5 at the Grand Traverse Resort.

We're be giving away a $500 Absolute Michigan sponsorship, so drop by, say hello and enter to win!

(and if for some reason our posts tomorrow are late, you'll know why!!)

Half Staff by Apocaplops

UPDATE Oct 25: Carol of ArborLaw.com writes:

I actually have the entire list of services descriptions covered by the law, on my blog at Arborlaw.com. When the law came out, I cross-referenced the NAICS codes (which are incorporated into the new law specifically by reference) with the section numbers from the bill and the expected new numbers for sections in Michigan Compiled Laws. If you want to see this to determine whether your business services are covered, go to http://arborlaw.com/blog/services-tax. (it's a big list!)

Political analyst George Weeks writes that in decades of following how Lansing deals with financial crisis, I have never seen enactment of such a bizarre, crazy quilt, irrational, inexplicable, unfair and — most of all, confusing to taxpayers — tax.

Crain's Detroit Business goes further, calling this The best tax plan lobbyists can buy. Law and accounting services are not taxed, but the broad category of management advice, strategic planning and financial planning and budgeting will be taxed. Hmmm. So a company buying consulting services to help it keep its doors open is making a “discretionary” purchase?

Like many in Michigan, we're wondering which of the services we provide like online publications (probably not), internet consulting (probably so) or graphic design & marketing (who knows??!!) would be subject to the service tax.

Assuming that movements to repeal or change the tax fail, mLive's blog gives some idea of what services might be subject to the tax come December 2007. The nebulous "consulting services" is made a whole lot clearer when you click over to see businesses classified under 5416 Management, Scientific, and Technical Consulting Services. It's surprising to find that in addition the list includes items that are absolutely essential to the development of new businesses in Michigan like site selection, start-up consulting, marketing, and a host of science and technical services.

We invite you to add your thoughts, comments and suggestions for making some sense out of what looks like a fiscal nightmare for Michigan.

Moon Patrol by powerbooktrance

Each post at Michigan Innovators is a video podcast interview with innovators who can or have had an impact on Michigan's economy. Two professors at the College of Business at Eastern Michigan University, Diana Wong and Bud Gibson, started the site with hopes that it would become a "highly visible repository of stories that showcase the modern, innovate spirit lurking in the Michigan economy" and also to provide material for their classes.

Their features look at the entrepreneurs and companies working in cutting edge technology such as Aaron Crumm's Adaptive Materials (making fuel cells that provide a 10x improvement over battery power, "technology concierge" Bruce McCully of Dynamic Edge, and Linda Girard, who explains how to Find & Convert Web Customers with her company Pure Visibility.

In addition to searches by industry (web communications to medical research) and by people and place, the blog also allows allows searching by themes like Defining New Markets or Technology & Culture, where you can delve into issues the technological and cultural divide between the US & China.

An appeal to reason by Apocaplops

StateGate seems like it might be nearing its conclusion with an 13th hour deal reached at 4 AM when legislators were apparently too tired to fight anymore. The LSJ reports:

"This budget agreement is the right solution for Michigan," Gov. Jennifer Granholm said in a news release after the vote. "We prevented massive cuts to public education, health care and public safety while also making extensive government reforms and passing new revenue. With the state back on solid financial footing, we can turn our focus to the critical task of jumpstarting our economy and creating new jobs."

Leaving aside the question (for now) of how much harder it will be to create jobs with a reputation as a state that is financially unstable, let's take a look at what was added to an income tax hike - the "sales tax expansion", a 6% tax on services. The Detroit News lists some of the services that might be taxed in New levy to tax 23 services.

The list appears to make little sense, with ski resorts subject to the tax but not golf course, janitorial service providers but not plumbers, tanning but not haircuts and financial & business consulting but not legal and accounting services. What do you bet that TV ads won't be subject ... and also that we'll be hearing a lot more like this from every industry affected?

"Any service tax should be across the board on all services and not single out specific areas of the economy," Stephen Kircher, president of Boyne USA Resorts' eastern operations, said in a statement.

Summer Night in Old Town by sabatoa

The Model D empire continues its inexorable march to talk about what's going right in Michigan cities with Lansing Area Capital Gains. The first issue includes a feature by managing editor Brad Garmon on the resurgence of Michigan's Capital City that begins:

It doesn't take an urban planner or a census taker to tell you that Lansing has turned some subtle but significant corner on its transformative journey to thriving cityhood. All it takes is a Thursday visit to the corner of Michigan Avenue and Larch Street on a hot summer night when the Lansing Lugnuts are in town...

As with other Model D productions, they blend well written articles with excellent photography and neighborhood profiles (Old Town is their first feature) to deliver a two-fisted uppercut to the jaw to the Michigan's moaning mainstream media.

Sync by pinksage

Paddock Talk (a NASCAR racing site) has a transcript of the remarks of Ford President of the Americas Mark Fields at the Chicago Auto Show. He talks about "simplexity" - the state that exists when something is both simple and complex at the same time - and how it relates to the business of designing and selling cars.

While the payoff of Fields' speech is the fairly mundane news that the Ford Five Hundred will become the Taurus (and Freestyle the Taurus X and Montego, the Sable), I found the deeper implications about the business of making and marketing cars fascinating. When you think about the massive investment a car represents, the idea that it might become a digital/entertainment hub not so silly when you consider that it may be the most significant piece of "real" property an under-30 person owns.

I was sorely tempted to use the photo Ford And Microsoft Birth N'Sync: The End Of The World Is Nigh At Hand from Jalopnik. Although I had never really heard of the concept, apparently simplexity is fairly well established.

The current version of Introduce Your Michigan Business or Organization is right there.

Country Schoolhouse by nomm de photo

The Detroit News reports that some Democrats, Republicans and public policy experts are saying Michigan needs to take a look at extending the sales tax to cover more services and (perhaps) lowering the sales tax overall by a penny (6¢ to 5¢) to help offset a projected half billion dollar budget deficit. While a tax on all services would generate close to $9 billion, business-to-business services (engineering, legal services, accounting) would likely be exempt due to the adverse impact that could have on economic development. Likewise, medical services would probably be off limits as well reducing the overall revenue to just under $3 billion.

Michigan taxes 26 of 168 services (ranking 39th in the US) and increasing taxes on services is opposed by most business groups including the Michigan Chamber of Commerce who say it's a "very bad idea" and that a service tax could lead to reduced competitiveness with neighboring states. Thomas Clay of the Citizens Research Council of Michigan says:

Our tax structure is archaic, obsolete. All that economic activity in the service area is not connected to the tax system. If you had a tax on personal services, you could reduce the rate and have sales tax revenue that would grow in the future.

Read Michigan may tax services in the Detroit News and tell us what you think about such a measure in the comments.

First National Bank Building by Allan M

Today's Freep has a nice feature on Ann Arbor's exploding high-tech job scene that says Google is not the only company planning to bring jobs to the city and Washtenaw County. Google, Toyota, Hyundai and others have committed to creating 2,500 jobs in the region over the next five years. That doesn't include a couple dozen start-ups that expect to add more jobs.

The secret? "You really have to be aggressive in selling the assets of your region," said Michael Finney, CEO of Ann Arbor SPARK. SPARK was launched by university, business and civic leaders to attract so-called knowledge-based sectors, such as alternative energy and biotechnology. (also check out the Ann Arbor SPARK blog for some great links to entrepreneur resources in the region!)

In his accompanying essay, Jack writes:

...Most of all, the economist says, "we need a new set of attitudes -- creative, highly skilled, flexible and entrepreneurial." The situation is far from hopeless. We have a vibrant higher-tech manufacturing sector. We have an industrial work force, much of which is capable of being retrained and retolled.

Professor Ballard feels strongly that, "If we can make the transition to a new mindset, we really can achieve a vibrant economic future for Michigan." But if that is to happen, it���s clear that we do need to think outside the box. Charles Ballard���s eminently sensible suggestions violate the dogmas of both our fossilized political parties.

Democrats are not going to like some of his suggestions about public employee pensions and health benefits. Republicans will be shocked by his suggestions about taxes. But it all makes sense.

Click for more on Michigan's Economic Future by Charles Ballard and published by MSU Press.

Also see Spartan Podcast's interview with Charles Ballard.