Michigan: a profile: this profile is part of an occasional series examining the issues and atmosphere guiding politics and policy in the various states.

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The Facts

Nickname: The Great Lakes State

Capital: Lansing

State Motto: "Si Quaeris Peninsulam Amoenam Circumspice" (If you seek a pleasant peninsula, look about you.) 31st state to enter the union, on Sept. 9, 1850

Population: 37.7 million

Politics

Gov. Jennifer Granholm (D); elected 2002 and 2006, term expires January 2011

Michigan Legislature

State Senate: 21 Republicans, 17 Democrats

State House of Representatives: 52 Republicans, 58 Democrats

Congressional Delegation: Nine Republican and six Democratic Members of the U.S. House; two Democrat U.S. Senators

Franchise Facts

Franchised Businesses: 23,851

Employment in Franchising: 322,445

Economic Output of Franchising: $18.9 billion

State Regulator Contact Information

Suzanne Hassan

Assistant Attorney General

Consumer Protection Division, Franchise Unit

525 W. Ottawa Street

G. Mennen Williams Building, Sixth Floor

Lansing, Michigan 48933

517-373-7117

Issues affecting franchising in Michigan

As the nation's economists struggle to decide whether the United States has slipped into a recession, there's no doubt that Michigan has been dealing with its own downturn since 2001. The gaps in state revenue and huge job losses have left state lawmakers with an agenda focused on economic recovery. Unfortunately, when lawmakers are on the hunt for new revenue, service-sector businesses, such as many in franchising, become the target.

Tax on Services

In 2007, Michigan legislators passed and Gov. Jennifer Granholm (D) signed an expansion of the state's services tax to fill a $686 million gap in the budget. Services covered under the expansion included carpet cleaning, janitorial services, landscaping, travel services, warehousing and storage, packaging and labeling, document preparation and others. With franchised businesses operating in all these categories, IFA joined the fight to repeal the tax before it went into effect.

Literally hours after going into effect on Dec. 1, Granholm signed legislation repealing the 6 percent services tax that was put into law only two months prior. The unfair tax was replaced by a 21.99 percent surcharge on the taxes businesses will already pay under the new Michigan Business Tax. Most small businesses are not required to pay the MBT and thus will not have to pay the surcharge. However, budget difficulties remain going into the 2008 legislative session, so the business community will again be on guard for threats such as these.

Health Care

As with many states, Michigan is seeking to tackle the issue of health-care access for its citizens. There has certainly been discussion among legislators, but the real action may take place this November when voters could be asked whether lawmakers should be forced to find a solution. The question, currently being circulated, but not yet approved for the ballot, reads as follows:

"The State Legislature shall pass laws to make sure that every Michigan resident has affordable and comprehensive health-care coverage through a fair and cost effective financing system. The legislature is required to pass a plan that, through public or private measures. controls health care costs and provides for medically necessary preventive, primary, acute and chronic health-care needs."

Whether a forced solution negotiated by state legislators is the right way to go remains to be seen. However, this measure would put elected officials on notice that its constituents are ready for a solution. If legislators fail to act to the satisfaction of the ballot-measure's proponents, expect a push for a full universal health-care system through the ballot process in the near future.

Restaurant Mandates

Activity on various restaurant issues has spread across the country, including Michigan. Legislative efforts to enact mandatory menu labeling have been discussed, but thus far not enacted. Prohibitions or restrictions on the use of trans fat in food have been discussed at both the state level, as well as at the local level in Oakland County. State discussions continue, while the ordinance in Oakland Country was defeated.

Troy Flanagan is the director of government relations of the International Franchise Association. He can be reached at 202-662-0792 or tflanagan@franchise.org.