Michigan suffers from an inability to attract and retain jobs. Business taxes and labor policy receive much attention, but state-level regulatory reform may be the most important factor in reversing our job losses.[1]

Most businesses desiring to locate or expand in the state must enter through the regulatory gate before they can invest and create jobs. State air and wetland permits are the two environmental requirements that most often hinder businesses that would like to locate or expand in Michigan. The state's tax or labor policy makes little difference if a business cannot obtain an operating permit or license in a timely fashion. The regulatory gate in Michigan has all too often become a regulatory barrier.

Businesses take these problems seriously. The Michigan Chamber of Commerce's policy on regulatory reform states: "Michigan's current regulatory burden is having a negative impact on our state's economic competitiveness. Dramatic changes are needed at the Department of Environmental Quality. ... Michigan needs to develop a more consistent, predictable regulatory structure that helps to both encourage economic growth and protect the natural resources."[2] And in a state "turnaround plan" published by Business Leaders for Michigan, a key step is state regulatory reform, with the group observing that the 10 best states at attracting jobs and people are "[w]ell-run, fiscally stable, competitive locations with a user-friendly regulatory climate."

Michigan needs a sensible regulatory system more than ever, as technology provides businesses more flexibility in locating and moving their operations. Much is made of loss of jobs to foreign competition, but the bigger threat facing Michigan is job loss to other states, such as Indiana, that have fewer regulatory barriers. For example, Michigan's wetland statute and implementation of federal wetland law are more stringent than in most states Michigan competes with for jobs.

The good news is Michigan's uncompetitive regulatory bureaucracy can be fixed with common-sense reform; it does not require the polarizing debates that often surround changes in tax and labor policy. However, fixing the regulatory problem will require decisive and bold action from elected and appointed officials. We must streamline the state's dysfunctional regulatory system so that it protects human health and the environment while encouraging job growth and providing regulatory certainty.

[1] Michigan's regulatory problem is not limited to state government, but regulatory reform in local government is beyond the scope of this discussion.

[2] See http://www.michamber.com/mx/hm.asp?id=envirobond#hit_last. The Department of Environmental Quality was merged with the Department of Natural Resources in October 2009 to create the Department of Natural Resources and Environment.