Lobbyists, Business and Governments The complicated and inescapable relationship
It’s a tentative dance where partners – business and government – are not entirely comfortable, and at times out of step, yet thoroughly intertwined.
At the local, state and federal levels, both recognize mutual needs: jobs, rules, investment, education and more. It’s a relationship based on politics, culture and finance.
In 2015, 2,998 lobbyists, mostly representing business interests, spent $38.7 million to influence Michigan’s Legislature. Disclosure reports detailing lobbyists’ clients and how much they spend, are filed and complied annually by the Michigan Campaign Finance Network.
Business interest in Michigan’s Legislature is vital considering the volume of rules and regulations championed during the session by lawmakers. Since Jan. 1, 2015, thousands of bills have surfaced in the Senate and House of Representatives, many of them affecting a broad spectrum of businesses in a multitude of ways. Most never become law.
Tracking a river of legislation this year, the Mackinac Center for Public Policy (MCPP) has identified 133 bills affecting licensing requirements; 48 dealing with economic development, 55 on energy, 30 dealing with financial institutions and 63 on general commerce. Altogether, the MCPP tracks more than a dozen business sectors whose operations, finances, workers, taxes and fees are affected by provisions within hundreds of bills. Whether a business reacts favorably or unfavorably depends on a bill’s intent and reach.
“What business wants from government is a fair playing field with no favors,” said Michael LaFaive, director of the Mackinac Center’s Morey Fiscal Policy Initiative. “By promoting one industry or business, government must, by default, demote other industries or businesses.”
His view reflects the organization’s doctrine of the free market economy and a belief that government wastes billions of dollars investing in failed economic development initiatives.
Other groups engaged in the business/government relationship are less “free-market” absolute than the Mackinac Center, which focuses on research and policy rather than product.
“At the Lansing Regional Chamber of Commerce, members want government that is able to deliver essential services, infrastructure and public safety,” said President and CEO Tim Daman.
“It’s not so much, get out of the way, as having a fair regulatory process. It’s important, as well, that it helps us attract and keep talent and that it supports a quality of life that makes a region a dynamic place to live,” explains Daman.
Daman, like other business leaders, acknowledges that government relations exist on many levels. He feels that the two sides need a better understanding of their roles and needs within the relationship.
“Sometimes there’s a disconnect. In too many instances around [greater Lansing], some of our elected officials will lump businesses all together, saying business is bad,” said Daman.
Part of the problem is the lack of business participation in local government, especially in Lansing. Daman acknowledged that serving in elected office, a government board or a commission, can be difficult and entail long hours. As a result, basic business needs are misunderstood or not fully weighed by public bodies.
“The remedy is engagement,” said Mike Rogers, vice president of communications for the Small Business Association of Michigan. “We tell members across mid-Michigan that it is crucial to be involved at all government levels, especially at the local level. The decisions that most affect small businesses are those by planning boards, commissions and supervisors. If you are involved at the most grass-roots level, it’s much more valuable than showing up and complaining about a policy.”
Rogers added that local politics is less likely to be divided by ideological labels and that sharing neighborhoods, schools, kids’ sports teams and other common community interests, breaks down barriers and leads to a better understanding.
“From a state capital perspective, the business/government relationship has many facets,” said Rep. Sam Singh (D-East Lansing).
“There are multiple roles; one is they are partners. At times, business and government jointly train employees for jobs; getting people the life and academic skills they need to prepare for the workforce. Sometimes government is the supply chain for business. At other points, we have to be the tax collector or the regulator. What all sides have to understand is that, if we communicate well with one another, there can be a strong relationship between government and business. It can help government succeed and help business grow,” he said.
For lobbying firms like Government Consulting Services Inc. (GCSI), communicating with all levels of government on a variety of issues is what it offers its roster of 100 clients – about 60 percent of them business related. The firm spent $1.67 million on lobbying in 2015, according to the Michigan Campaign Network. Only Karoub Associates spent more – $1.74 million.
“I don’t think anybody can deny that even if they may not enjoy it, a clear relationship exists. That’s where an organization like ours comes into play, trying to help shape the environment so that small business can compete and survive,” said Michael Hawks, an officer with GCSI.
He said that a level of trust between business and government is essential in an era of term limits, where the House turns over every six years and the Senate every eight.
“What we want are meaningful and reasonable regulations and tax policies that provide an opportunity for business to grow and expand,” Hawks said. “For business and government, it’s a marriage by design or involuntary. But they have to exist together.”
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