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Improvement in Michigan's Business Climate Attributed to More Efficient Regulations, Better Customer Service

Thursday, June 25, 2015

Survey reveals more positive view of state’s regulatory systems among Michigan businesses

A new survey shows Michigan’s regulatory and business climates are improving after a focused, multifaceted plan to enhance customer service and eliminate regulatory inefficiencies.

The State of Michigan began surveying business customers in 2013 to gauge their perception of the state’s regulatory climate, identify bureaucratic red tape and make significant and meaningful improvements, such as shorter processing times, increased online services and the elimination of unnecessary paperwork. 

The state’s first survey was developed to establish baseline measurements for Michigan’s regulatory environment.  

“2013 was the starting point,” said Lt. Governor Brian Calley. “The first survey helped us to better understand the business community’s general view of our regulatory processes and where it thought changes were needed, and subsequent surveys have been the driver for continuous improvement. But our work is not finished. We will continue to improve our regulatory systems to support business growth and job creation, while providing the critical health and safety benefits of our regulatory oversight.”

Customers of the state’s three primary regulatory agencies – the Michigan Departments of Environmental Quality, Licensing and Regulatory Affairs, and Treasury – were surveyed. Survey results showed an overall increase in advocacy, business and regulatory climate perception, and trust in the state’s regulatory agencies. The three departments have oversight over approximately two thirds of the state’s regulatory rules.

These improvements include:

  • Advocacy: 19 percent/10 point increase in business customers willing to recommend Michigan as a place to start a business to a friend or colleague.
  • Business Climate Perception: 19 percent/10 point increase in business customers’ positive perception of the business climate in Michigan.
  • Regulatory Climate Perception: 23 percent/10 point increase in the positive perception of the regulatory climate in Michigan.
  • Trust: 30 percent/13 point increase in respondents trust in the State of Michigan's regulatory agencies (DEQ, LARA, Treasury, etc.).

The MEDC survey was conducted by ForeSee, which attributed the statistically significant increases in positive perceptions to the changes and improvement in the departments. ForeSee research experts stated that the improvements over the course of two years were substantial given the range of business customers surveyed. ForeSee works with a diverse set of Fortune 500 companies and other organizations around the world.

The Snyder Administration has made sweeping policy changes that have improved the business climate in the state, including elimination of the MI Business Tax; elimination of the personal property tax, saving businesses $500 million annually; and the addition of nearly 400,000 jobs while cutting unemployment in half.

A major component of Michigan’s economic comeback is making regulatory processes more efficient and providing enhanced customer service.

“Manufacturers are increasingly confident about Michigan’s regulatory climate and this is supported by the MMA’s own Annual Michigan Manufacturing Survey that showed 68 percent of industry leaders as being excited and optimistic about 2015 and the state’s future,” said Chuck Hadden, president and CEO of the Michigan Manufacturers Association. “The reforms we’ve made are working and we should all have confidence in Michigan’s current direction.”

“Entrepreneurs across the state have told us that they have clearly seen a reduction in the number of burdensome regulations that impact the survival of small businesses, and that has helped lead to a substantial improvement in our entrepreneurial climate,” said Rob Fowler, president and CEO of the Small Business Association of Michigan. “The trend lines are certainly moving in the right direction, as reflected in the 2015 Entrepreneurship Score Card. That study shows that Michigan has made substantial progress in improving our entrepreneurial climate, where our state now ranks 21st in the nation, up from 41st in 2008.”

Based on survey feedback, the state identified processes in need of improvement and formed teams of employees to take comments from businesses to improve key processes and eliminate mandated procedures that impact the business community. These teams were formed under Reinventing Performance in Michigan (RPM), an Office of Good Government initiative. The metric-driven customer service model engages state employees and business stakeholders to reinvent government and provide top-notch customer service to the state’s job providers.

Since Governor Snyder took office, state government has focused on improving customer service and making the state’s regulatory processes more efficient.

Some of these process improvements include:

Department of Environmental Quality

  • DEQ is performing as well as or better than the comparison states in processing times for the prioritized permits according to a benchmarking survey performed by Public Policy Associates, Inc., and commissioned by DEQ.
  • In a DEQ program customer survey, respondents indicated they received excellent customer service from the DEQ. The DEQ’s Environmental Assistance Center also responded to 99 percent of 17,026 inquiries within one business day.

Department of Licensing and Regulatory Affairs

  • LARA improved its customer service response timeliness by cutting 37 key processing times by an average of 77 percent, giving business customers the valuable time they need to be successful. Many of the processing times involved technological enhancements that improved the efficiency of licensing processes.
  • LARA cut bureaucratic red tape by eliminating more than 1,400 needless forms, reducing the total amount of forms in the department by 62 percent. These forms were obsolete, duplicative or unnecessary, and caused regulatory burdens for business customers and department staff.

Department of Treasury

  • Since launching in 2013, more than 350,000 customers have made payments using the Collections E-Payments website, with 29 percent of payments received through the department’s website.
  • In May 2013, the Local Audit and Finance Division went live with its updated, electronically filed qualifying statement. The qualifying statement is the first step a unit of local government must take to receive the department’s approval to borrow money.  In the past, each filing was manually reviewed, a process that used to take 470 staff hours per year, or 7-21 days for Treasury staff to make a determination. With the new system, it now takes 110 staff hours per year, and local units have a determination in 1-2 days.

To view the survey results, click here.