Blog: Ingrid Ault

This is part two of a three-part series of actions that you can take to advocate for the local movement.

As the executive director of Think Local First, I make it my business to know our members' business. Every day I have conversations with our membership about issues they face daily. One of the top concerns is access to and awarding of government and university contracts. Over the past four years I have been collecting stories from businesses that had contracts they bid on awarded to companies outside our county when they provided a bid at the same price or lower.

Why is this happening?
When I have questioned this, I have been met with various answers including, 'No one told me it was important'. Since then I have been talking to officials to make sure they are considering this factor when deciding whom to award a contract to. This began a discussion about implementing a local procurement policy at our city, county, and state levels.

What is the current status?
The state has a "buy Michigan first" policy introduced by Gov. Granholm in 2009. She asked universities and everyone else to do the same declaring "Ford to Faygo" and "Bell's Beer to Blueberries" as the path to follow. Sounds good, doesn't it? Unfortunately, all a business needs is a P.O. box located in the state of Michigan to be considered a state preferred vendor. For this to have teeth, we need a vetting system that goes deeper into how "local" is defined.

Ten days later, Washtenaw County discussed implementing a countywide policy at the April 2009 commissioners' working session when they discussed acting on Gov. Granholm's mandate. Then Commissioner Jeff Irwin (now state representative for District 53) clarified on Arbor Update:

"The current policy advantages local vendors in two ways:?
1) When other factors (price and quality) are the same or nearly the same, our policy states that purchasing is to choose the local vendor.
2) We require that contractors on larger projects, such as new building or major renovations, sign our CUB agreement (Construction Unity Board). This ensures that these contractors pay a living wage and contribute to union health care funds."

But at the city level, we are unaware of any local purchasing policies within Washtenaw County.

What is government's role?
I often hear that government can't play a role in economic development. This is simply wrong. The most immediate way is to keep the taxpayer dollars right here in our community. Investing in the public that funds the government to provide services is common sense. For every dollar that stays in our community, it recirculates two and a half times more. Investing in local businesses is an investment in our community.

Behind the Pack
As a county and state that makes bold statements, we do a poor job of providing clear, concise guidelines for purchasing departments to follow. Saying we would like them to consider following a loosely defined concept is not the same as defining how they are required to follow a policy.

Over the past year there have been many communities enacting local procurement policies at all government levels with bi-partisan support. Texas has had a policy in place for 17 years. Arizona has studied exactly how a policy would affect their state in job growth by enacting such a policy. And communities from Santa Cruz, Calif. to Grand Rapids, Mich. have implemented policies in the last month.

Time to Take Action!
We believe it is time that our state, county, and cities get on board and take a real stand on this issue. The evidence speaks for itself. Now is the time. There are policies that have been in place for decades that have withstood litigation from big business that work hard to lobby against such common sense policies. We have the power to create economic revenue and jobs right here in our community. But to make this happen our community leaders need to know that you support these types of policies. They need to hear from you. They need to know that you support this. They need to know that you will support those that understand why this is important to our community. Please let your voice be heard. Contact the elected officials that represent you now.

This is the final piece of a three-part series of actions that you can take to advocate for the local movement.

Think Local First is part of a growing movement that supports and cultivates local independently owned business – otherwise known as the local movement. As a member of the Business Alliance for Local Living Economies, we are part of North America's fastest growing network of socially responsible businesses, comprised of over 80 community networks in over 30 U.S. states and Canadian provinces representing more than 22,000 locally owned, independent business members.

All of these networks are working to create local living economies. We do this by supporting independent retail, sustainable agriculture, renewable energy, green building, local zero-waste manufacturing, and community capital.

How Local Alliances Help Small Businesses Thrive Year Round
The most successful entrepreneurs often do more than just operate a great business – they are local champions who are connected to other businesses and invested in the future of their hometown. For nearly 10 years now, such like-minded businesses have been uniting through unique, local, grassroots "Think Local First" programs in towns and cities all across the country. They work together to support all locally owned, independent businesses in a community. There are now more than 150 such non-profit groups (BALLE and AMIBA), and many studies to that show the benefits of a thriving local economy.

How does it work?
A single merchant has limited ability to shift attitudes or consumer spending, but by building strength in numbers, we can create a culture of support for independent business locally and a strong voice to advocate for the interests of local independents and the communities they serve.

Most alliances often start with Buy Local campaigns as Think Local First did back in 2004. We are building a tradition that strengthens local economies, expands employment, nurtures a sense of community, and provides a more relaxed, fun, and rewarding shopping experience.

What You Can Do
As customers, we have the power to nurture and grow our community by choosing where we spend our dollars. The Shift Your Shopping campaign asks you to shift where you spend those dollars. Numerous studies have found directing that spending to locally owned, independent businesses will create impressive benefits. For example, a 2008 study of Kent County, Michigan, (home of Grand Rapids) by Civic Economics projected shifting 10% of the county's per capita spending from chains to locally-owned independent businesses would create "almost $140 million in new economic activity and 1,600 new jobs for the region."

These are powerful statistics that provide hope that we can make change in our economic outlook. We hope you will join us in shifting your dollars to locally owned, independent businesses. Together we can work to keep our community a unique and vibrant place to work, live, and play. Let's all pledge to make the shift and support those that support us!

This is part one of a three-part series of actions that you can take to advocate for the local movement.

Michigan Retailers are Hurting
Plain and simple. The struggle to compete with online and catalog businesses creates an unfair advantage that is jeopardizing local businesses, Michigan jobs, and our state's economic recovery.  The main disadvantage to local independent retailers is collection of the state sales tax. Those that do business in Michigan must abide by this law, while those that are located outside of the state of Michigan, do not. Online and catalog retailers use this loophole to pull shoppers away from brick-and-mortar businesses by not having to collect the 6-percent sales tax that in-state retailers must do. As a result, local independently owned businesses are put at a significant competitive disadvantage that puts Michigan's business community at risk.

Legislation to Level the Playing Field
Last year Reps. Eileen Kowall, R-White Lake Township, and Jim Ananich, D-Flint proposed HB 5004, otherwise known as the Michigan Main Street Fairness Act. It would close the sales tax loophole by moving online and catalog retailers under the same sales tax collection laws that Michigan brick-and-mortar businesses operate.  Basically it would expand the definition of "nexus" or "physical presence" to include retailers who conduct business through affiliate businesses in Michigan or own subsidiary companies in an attempt to avoid paying sales tax. The new definition would require that they pay state sales tax, as is already the case in 24 others states, up from five a year ago.

What would this mean to our state?
According to a report by Public Sector Consultant, Michigan is projected to lose as much as $141.5 million in uncollected sales tax revenue this year. Their study found that closing the loophole would directly lead to the creation of as many as 1,600 new jobs and increase investment in Michigan's economy in the form of sales at local independent retail outlets by as much as $126 million per year, thus keeping the wealth in our community at the tax level as well as bringing it to the local level.

"The major implication of this sales tax issue remains an uneven playing field for Michigan-based retailers and out-of-state, online mega-retailers competing for the same purchase," says Ken Sikkema, a senior policy fellow at Public Sector Consultants and a former Majority Leader in the Michigan state Senate.  "While other states are successfully taking action to protect their job makers in growing numbers, Michigan's uneven playing field continues to have negative impacts on economic activity across the state.  Other states are addressing this problem -- why not Michigan?"

Why You Should Help
At Think Local First, we believe this is an imperative step to competing on a fair playing field. You may be thinking, isn't this a new tax? In fact, it is not. State law mandates that you report any uncollected tax from online and catalog purchases that are outstanding on your state tax return. I am one that complies with this, but alas not everyone does. This would close that loophole, return much-needed dollars to our state, and bring us in alignment with the growing number of other states that are making this change.

What can you do to help move this bill forward? Contact your legislatures and tell them your story. Tell them how this affects you as a retailer or member of the community that wants a level playing field for all to compete in. Explain that Michigan needs to get on board with this movement now and not be left behind. Remind them that a sale is a sale, no matter where it takes place and all businesses should be treated equally.  Michigan needs Main Street fairness!

Take action now at this link. Even a brief note saying you support this act is important for your legislators to hear. Please write or call your representative today. Your neighbors, friends, and family are counting on you to do this now and be heard!