Michigan Gov. Rick Snyder outlined his approach to government at a Governing conference Thursday, offering a familiar refrain about its role in the economy: "The role of government is not to create jobs," Snyder said. "[It's] to create an environment for success."
And that's exactly what Michigan is attempting to do -- and it may be showing results. The state's unemployment rate has improved from 10.9 percent when he took office in January 2011 to 8.3 percent, according to the most recent federal figures (the rate had been improving for more than a year before Snyder took office).
Snyder attributed the improvements to his successful repeal of the state's Michigan Business Tax, which he called "stupid" and "dumb." Instead, he touted his "simple, fair and efficient" approach to taxes that he believes will foster business growth -- and hiring -- in the Great Lake State.
Snyder eliminated the state's major business tax and replaced it with a 6 percent corporate income tax. That tax only applies to businesses that issue public and private stock. As a result, an estimated 100,000 businesses no longer have to file tax returns, according to his office.
The offsets in revenue are achieved by eliminating some business tax credits. More controversially, the state will now tax retirement income and reduce its earned income tax credit, which would disproportionately affect low- and middle-income residents.
Supporters of the policy say by reducing and simplifying business taxes, Snyder has improved Michigan's business climate, which means more companies want to come to the state, expand and hire workers. Critics say he's simply shifted a tax burden from corporations to working families with no guarantee of results.
A former executive with Gateway Computers and a venture capital firm CEO, Snyder had never held elected office before becoming governor. But he said many of the business principles he's learned are applicable to government and questioned those who believe otherwise. "A lot of people, particularly politicians, don't really understand the private sector," Snyder said.
In the early days of his administration, Synder said he tried to assemble a team around him of people who were both subject-matter experts and innovators, while attempting to shake up the workplace culture among state workers in Michigan.
That effort, he said, has revolved around using dashboards and performance metrics to evaluate the work of state agencies. The work not only makes the state government accountable to voters, but also lets hard working state employees see that their efforts are having an impact. "I want to make them feel good [and show them] that they're making a difference for 10 million people in Michigan," Snyder said.
State employees carry index cards carrying Snyder's mantras for good governance. That's part of a cultural shift among the state workforce that he's trying to foster. Snyder says many strong employees have been held back from reaching their potential by a lack of leadership and effective management. His goal, he said, is to create an environment "where they don't feel threatened" and don't have to deal with as many layers of bureaucracy.
Snyder skirted questions about the state's impact on cities, but said that his focus on job creation would ultimately help local governments improve their condition. In recent years, the state has drastically reduced the amount of revenue it sends to localities, and Synder is behind a controversial law that allows the state to eliminate the authority of elected officials in financially distressed municipalities.
The Michigan governor had little to say about the unsuccessful recall of Wisconsin Gov. Scott Walker, who was targeted for ouster by labor groups upset with his efforts to eliminate their collective bargaining rights. Snyder himself has been a frequent target of labor groups for supporting policies that allow the state to dismantle labor contracts of public-sector workers in financially distressed localities.
"I don't spend a lot of time on politics, to be blunt," Snyder said when asked about Walker's victory.