Member Spotlight: CMIT Solutions

Name: John Holbel

Title: President, CMIT Solutions

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

Since May 2018

What is a typical day like for you?

5:30 am – Have breakfast, catch up on news of the day & recent cyber attacks and breaches, and check for important emails.

6:30 am – Layout the work day, review client tickets, and the day’s appointments.

7:30 am – Align priorities for the day, review issues list, facilitate team scrum, and action plans for the day.

Daylight hours (8 am to 6 pm) are spent with client’s, appointments, implementations, networking, and business development. Dinner time with family fluctuates depending on training events, industry conferences, and networking events. Then I wrap up the day by checking email and reading, which is a passion of mine.

What do you enjoy most about the A2Y Chamber?

The A2Y chamber community is very active. Members are willing to help each other and collaborate. There is a broad range of knowledge, industry, and activity across the Washtenaw community. The A2Y Chamber is very proactive and presenting opportunities for business to connect with one another and help the community grow.

What’s your favorite tip for someone in your industry?

Cyber Crime is a business issue and not a technical issue. Business Assets can be protected.

What is a surprising fact about your business?

There is a severe shortage of cybersecurity skill-sets and there is no evidence of improvement over the last 3 years. There will be a 1.8M gap in information security jobs by 2022 and the average cybersecurity professional is two years behind in knowledge from what current cybercriminals are currently doing.

If you would like to be featured in our Member Spotlight, contact us.

Member Spotlight: NewFoundry

Name: Richard Chang

Title: CEO, NewFoundry

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

Four years

What is a typical day like for you?

I’ve actually been out of NewFoundry’s day-to-day operations for about 2 years. My other two partners, our wonderful leadership team, and our staff keep NewFoundry running and delivering the outcomes that we hope exceed our clients’ expectations.

My days are primarily spent on business development initiatives for NewFoundry and also trying to give back to the community which we have been fortunate to be a part of. The latter is typically achieved by being a part of various non-profit boards (such as the A2Y Chamber of which I’m the Chair for 2019, United Way, Michigan Works Southeast, and Intermitten), volunteering via other organization committees, and also doing speaking engagements. My favorite speaking engagements have been when I get to be in front of students at Ypsilanti and Ann Arbor school districts.

What do you enjoy most about the A2Y Chamber?

The A2Y Chamber has a lot going for it that separates it from other Chambers: (1) the diversity of companies that are members, (2) the diversity of the members in our board of directors, (3) the great content programming and diversity of participants at our events, (4) our Public Policy committee is one-of-a-kind and absolutely amazing, and (5) the A2Y Chamber staff is wonderful!

What’s your favorite tip for someone in your industry?

Diversity is the word by which we all should live and also run our businesses: diversity of team members, diversity of clients, diversity of income sources, diversity of thought and approaches to solutions… the list goes on and on! Nothing but good can come about when living by that one word.

What is a surprising fact about your business?

Visitors to our studio are always surprised when we tell them that our building once housed a medical practice. Our open teamwork area was once segmented into individual physician’s exam rooms and our large conference room was the waiting room. We completely opened up the space when we bought it, but you can still see the niche where an aquarium once stood; we now use it for our trophy case!

If you would like to be featured in our Member Spotlight, contact us.

Analysis of the Business Implications of State Cannabis Law

Background

On Nov. 6, 2018, Michigan voters approved a ballot proposal to decriminalize recreational marijuana. The Michigan Regulation and Taxation of Marihuana Act (MRTMA) took effect Dec. 6, 2018, and permits adults over 21 to possess and consume legally acquired cannabis. It also allows licensed entities to cultivate, process and sell cannabis commercially.

Marijuana remains illegal under federal law. The U.S. Drug Enforcement Administration (DEA) classifies cannabis as a Schedule I drug, which means that it has no accepted medical use and a high potential for abuse. Certain derivative products are classified as Schedule V, which means they have the lowest potential for abuse.

The A2Y Regional Chamber takes no position on state and federal cannabis law, but it recognizes the business community’s exposure to legal changes and seeks to inform members on the issue.

Implications of the Law

The conflicting federal standards, coupled with the vague language of the MRTMA, have produced legal ambiguities for consumers, cannabis industry members and businesses that engage with them. Here are some answers and questions about how the A2Y business community is affected by cannabis law:

Human Resource Policy

According to the MRTMA, employers are not required to tolerate employee consumption perceived to affect work performance. Businesses can:

  • Institute and enforce workplace drug policies that prohibit employees from working under the influence or using marijuana on company property;
  • Conduct pre-employment drug tests, random employee drug tests, or reasonable suspicion drug tests according to company policies; and
  • Discipline, terminate or refuse to hire employees for testing positive in violation of workplace drug policies.

The Michigan Court of Appeals ruled that employers cannot withhold unemployment benefits from employees who hold medical marijuana cards and test positive. Non-medical consumers may be disqualified from benefit reception, though.

Neither the MRTMA nor legal precedent clarifies whether non-at-will employees, such as union workers, deserve special consideration. The terms of the employment contract may require distinct procedures or permit employees to claim disability protection under the Americans With Disabilities Act.

While the State empowers companies to set internal drug policies, federal contractors and grant recipients remain bound to stricter standards. The Drug-Free Workplace Act (DFWA) requires some contractors and all grantees of federal agencies to operate drug-free work facilities or risk indefinite termination of funds and contracts.

Public Education Operations

The MRTMA prohibits marijuana consumption on the grounds of primary and secondary schools, but it does not rule on institutions of higher education. Federal law is more definitive. As a DEA Schedule I drug, cannabis falls under the purview of the Drug-Free Schools and Communities Act (DFSCA). The DFSCA obligates federally-funded institutions of higher education to develop programs preventing possession, use or distribution of marijuana on school grounds. Violations jeopardize financial aid.

Lending and Investment

The federal government has not explicitly prohibited marijuana-related banking activity. However, according to the American Bankers Association, financial institutions that lend to, bank the money of, or process transactions for cannabis-related operations could risk charges of money laundering. Servicing non-cannabis clients in the supply chain — including utilities companies — could create similar risk. State Attorneys General have requested legal clarity on the issue.

Michigan legislators passed a resolution urging Congress to approve the Secure and Fair Enforcement Banking Act (H.R. 1595) to protect banks from sanctions. The bill remains in the U.S. House Subcommittee on Crime, Terrorism and Homeland Security but is expected to be taken to a chamber vote in the coming weeks. A Senate bill (S. 1120) that seeks protections for both banks and insurance companies remains in the Senate Committee on Banking, Housing and Urban Affairs. The Congressional efforts have the support of U.S. Treasury Secretary Steven Mnuchin.

Real Estate Management

Landlords can restrict or ban tenants from smoking, growing, processing, distributing or displaying cannabis on their property. However, they cannot prevent tenants from possessing cannabis or consuming it through smoke-free methods, such as through edibles or topical applications. Whether landlords can prohibit vaping is unclear. The right will depend on whether the State defines vaping as “smoking” or a distinct form of consumption.

Operations of Public Places

The MRTMA prohibits consumption in public places but permits use in areas that are inaccessible to people under 21 and that municipalities formally designate as consumption areas. Marijuana use is not restricted by Michigan’s Smoke-Free Air Law, which prohibits tobacco smoking in businesses and licensed food establishments. It is similarly unaddressed by the Washtenaw County Clean Indoor Air Regulation, which bans nicotine vaping in public spaces or places of employment. Municipalities will determine whether social establishments can allow consumption.

Policy Analysis

Industry Impacts  —  The Michigan Petroleum Association and Michigan Association of Convenience Stores say the average gas station will pay an extra $1,125 per day in taxes. This figure represents the statutory tax incidence, not the economic incidence. Gas is a relatively inelastic good, which means consumers would bear more of the tax burden than gas stations would. The associations also expect consumers to offset higher gas expenses by cutting spending in station convenience stores. Station owners record higher margins from commodities than fuel, so lost store sales could hurt operations. Consumers near state borders are predicted to escape the tax altogether by buying gas in Ohio and Indiana. Washtenaw County commuters may similarly pursue substitutes; they can avoid the fuel tax by biking or electric scootering. These changes in consumer behavior would hurt local gas stations.

Economic Impacts  —  Road improvements are expected to increase travel efficiency and reduce vehicle-repair expenditures across Michigan. These factors free up consumer time and resources for discretionary spending. The economic benefits could be offset by the fuel tax increasing business transportation and distribution costs. Rising input costs would yield higher prices for consumer goods and services, which could hamper the broader consumer spending and decrease Michigan’s national price competitiveness.

Environmental Impacts  —  The tax could help reduce Michigan’s carbon emissions by inspiring drivers to cut consumption or purchase more fuel-efficient vehicles. However, the University of Michigan Energy Institute expects rising registration fees to disincentivize purchases of cleaner vehicles. This would undermine carbon-reduction efforts. Policy proponents argue the $225 fee increase is minimal.

Equity Impacts  —  The policy mitigates negative effects on low-income motorists by doubling the Earned Income Tax Credit from 6% to 12%. In the near term, though, high-income earners may escape fair contributions to the road-repair fund and shift the cost burden onto low-income earners. As EV prices remain prohibitively high, EV ownership may be the exclusive privilege of high-income drivers. After about 13,500 miles, ICE drivers would pay higher annual taxes per mile than their EV counterparts would. Low-income motorists would effectively subsidize the road use of high-income drivers. Some experts propose an electricity use tax as an equitable alternative to charging static EV registration fees.

Industry Development Timeline

Legal experts await clarity on insurance and banking obligations; vaping restrictions; and consumption in age-restricted social establishments. They expect some answers as soon as June, when the Michigan Department of Licensing and Regulatory Affairs (LARA) plans to issue draft regulations. Formal state regulation will appear no later than Dec. 6, 2019. Conflicts between state and federal law may clear with the passage of the bipartisan Strengthening the Tenth Amendment Through Entrusting States (STATES) Act. The federal law would exempt state-authorized activity from the Controlled Substances Act. It has been endorsed by U.S. Attorney General William Barr and remains in the Senate Judiciary Committee and the House Subcommittee on Crime, Terrorism and Homeland Security.

The A2Y Regional Chamber, with business networks across the state, is closely watching cannabis policy developments and will provide updates as information becomes available.

Member Spotlight: Amy Cell Talent

Name: Amy Cell

Title: Chief Matchmaker, Amy Cell Talent

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

Two years

What is a typical day like for you?

Ha! Every day is different. I am usually working with a few different clients to help them with recruiting and HR issues. I am also networking with “opportunity seekers” as we provide coaching and workshops to help people find their passion, too.

What do you enjoy most about the A2Y Chamber?

I love the programs and learning about current events in the local business community.

What’s your favorite tip for someone in your industry?

Put together a long term talent pipeline program and grow your talent – it is much cheaper and more effective than needing to rely on recruiting during this type of “war for talent” market. Invest in internships, co-ops, apprenticeships and providing opportunities for high school students.

What is a surprising fact about your business?

There are actually a lot of amazing people available and looking for new opportunities.

If you would like to be featured in our Member Spotlight, contact us.

Analysis of Gov. Whitmer’s Gas Tax Proposal

Executive Summary

Gov. Gretchen Whitmer proposed a fuel tax to raise funds for statewide road repair. The tax exclusively targets vehicles with internal combustion engines (ICE) but also effectively raises the ownership fees for electric vehicles (EVs). Experts debate the policy’s effect on taxpayer equity, environmental sustainability, and economic growth. The State Legislature appears unlikely to pass the current draft.

Background

Poor road conditions cost Michigan motorists an average of $686 per year in vehicle repairs. Insurance fees, lost productivity, and other factors raise the cost to $1,980. Studies point to underinvestment in infrastructure. The State ranks No. 42 in road expenditures per vehicle miles traveled. It funds road maintenance through the Michigan Transportation Fund (MTF), which is financed by fuel taxes and vehicle registration fees. The revenue source has seen little growth over the years. Registration fees have risen proportionately with vehicle values, but until 2015, fuel taxes had never been adjusted for inflation and had not increased since 1997. The State had issued bonds to offset funding deficiencies; the Michigan Department of Transportation (MDOT) is now paying down $1.2 billion in outstanding debt.

In 2015, Michigan approved a $1.2 billion-per-year funding package for road and bridge repair. A five-year phase-in began in 2017. The plan included a 7.3-cent increase in gas taxes to 26.3 cents, an 11.3-cent increase in diesel fuel taxes to 26.3 cents, a $20 hike in registration fees, and a $600 million allocation from the general fund. It also indexed the fuel tax for inflation; effective in 2022, the tax will rise annually by either 5% or the inflation rate, whichever is lower. MDOT said the 2015 plan has slowed road deterioration but cannot solve the state’s infrastructure problems. Studies suggest the roads need another $2 billion to $2.6 billion annually.

Fuel Tax Proposal

To fill the funding gap, Gov. Whitmer proposed raising fuel taxes from 26.3 cents to 71.3 cents. The increase would be phased in with 15-cent hikes in October 2019, April 2020, and October 2020. Inflationary indexing would begin as planned in 2022. Whitmer expects $2.5 billion in gross annual revenue from the new tax beginning in 2021. The sum would be apportioned to a new Fixing Michigan Roads Fund ($1.9 billion) and restoration of the general fund ($600 million). The proposal eliminates the general-fund earmark for roads and restores $500 million siphoned from the School Aid Fund.

Those who oppose the plan point to its impact on Michigan’s at-pump taxes, which would become the highest in the nation, according to the Tax Foundation. Michigan fuel taxes are compounded by a 6% sales tax. The additional 45-cent-per-gallon excise tax would raise the average at-pump tax from 44.13 to 89.13 cents per gallon. For a 15-gallon tank, the total tax increase would cost an extra $7.16 per fill-up.

Whitmer’s plan would also indirectly raise registration fees for battery electric vehicles (BEVs) and hybrid electric vehicles (HEVs) to the highest rates in the country. The Michigan Vehicle Code ties each one-cent increase in fuel taxes to a $5 increase in BEV fees and $2.50 increase in HEV fees. For a 45-cent fuel raise, EV owners would pay an extra $102.50 to $225. The average ICE vehicle that gets 27 miles to the gallon could travel 13,500 miles before breaking the BEV rate. Since the average U.S. driver travels 13,476 miles annually, the proposed tax appears to draw comparable contributions from the average BEV and ICE owners. Altogether, EV fee increases are expected to generate $3 million in new revenue.

Five years into Whitmer’s 10-year road plan, a commission would be appointed to examine the market share of fuel-efficient and electric vehicles. The commission would explore fuel-tax alternatives to capture an evolving tax base.

Policy Analysis

Industry Impacts  —  The Michigan Petroleum Association and Michigan Association of Convenience Stores say the average gas station will pay an extra $1,125 per day in taxes. This figure represents the statutory tax incidence, not the economic incidence. Gas is a relatively inelastic good, which means consumers would bear more of the tax burden than gas stations would. The associations also expect consumers to offset higher gas expenses by cutting spending in station convenience stores. Station owners record higher margins from commodities than fuel, so lost store sales could hurt operations. Consumers near state borders are predicted to escape the tax altogether by buying gas in Ohio and Indiana. Washtenaw County commuters may similarly pursue substitutes; they can avoid the fuel tax by biking or electric scootering. These changes in consumer behavior would hurt local gas stations.

Economic Impacts  —  Road improvements are expected to increase travel efficiency and reduce vehicle-repair expenditures across Michigan. These factors free up consumer time and resources for discretionary spending. The economic benefits could be offset by the fuel tax increasing business transportation and distribution costs. Rising input costs would yield higher prices for consumer goods and services, which could hamper the broader consumer spending and decrease Michigan’s national price competitiveness.

Environmental Impacts  —  The tax could help reduce Michigan’s carbon emissions by inspiring drivers to cut consumption or purchase more fuel-efficient vehicles. However, the University of Michigan Energy Institute expects rising registration fees to disincentivize purchases of cleaner vehicles. This would undermine carbon-reduction efforts. Policy proponents argue the $225 fee increase is minimal.

Equity Impacts  —  The policy mitigates negative effects on low-income motorists by doubling the Earned Income Tax Credit from 6% to 12%. In the near term, though, high-income earners may escape fair contributions to the road-repair fund and shift the cost burden onto low-income earners. As EV prices remain prohibitively high, EV ownership may be the exclusive privilege of high-income drivers. After about 13,500 miles, ICE drivers would pay higher annual taxes per mile than their EV counterparts would. Low-income motorists would effectively subsidize the road use of high-income drivers. Some experts propose an electricity use tax as an equitable alternative to charging static EV registration fees.

Political Analysis

The Michigan House Speaker and Senate Majority Leader (both Republicans) acknowledge the need for road repair but oppose the fuel tax. They propose to fund roads with revenue from the existing sales tax on fuel. That revenue currently supports schools and local governments. Whitmer is willing to negotiate on other budget points, including a GOP-opposed business tax, to advance her fuel tax proposal as is.

Member Spotlight: Weber’s Restaurant and Hotel

Name: Michael Weber

Title: Vice President, Weber’s Restaurant and Hotel

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

Since 1967!

What is a typical day like for you?

My typical day is never dull. From working with and serving our guests to planning our next renovation, there is always something to keep me engaged. The fun thing about owning and operating a hotel is the variety of things you get to learn about day in and day out.

What do you enjoy most about the A2Y Chamber?

I enjoy networking with other chamber members and keeping updated on events that affect the business community.

What’s your favorite tip for someone in your industry?

Hard work is good for the soul.

What is a surprising fact about your business?

We started as a gas station that served hamburgers, beer, and had a pinball machine in 1937

If you would like to be featured in our Member Spotlight, contact us.

A2Y Chamber Welcomes Lizzy Balboa, Public Policy Intern

The A2Y Chamber is always looking for better ways to serve our members. One area of great importance to our community is public policy. This includes a better understanding of the participants and processes involved, along with an objective assessment of the political dynamics at work.

To keep our members updated on legal and regulatory changes, the A2Y Chamber has partnered with the University of Michigan’s Ford School of Public Policy to host a policy research intern. Lizzy Balboa will join us through July and will be available to help answer your policy questions regarding process, participants, and assessment of the practical outcomes. She will provide details on proposed or approved policies, explain their implications, and offer analyses on the political likelihood of implementation. In addition to answering your questions, Lizzy will also help us deliver updates on local, state and federal policy developments. These updates will be designed to serve as informative and objective summaries.

We are excited to have Lizzy on board and we know you will find great value in her work. A Michigan native, and graduate of Grand Valley State University, Lizzy is pursuing a Master of Public Policy degree at the Ford School of Public Policy. Along with her educational background, Lizzy brings experience as a financial and business journalist. She is pleased to field your policy inquiries at lizzy@a2ychamber.org.

Member Spotlight: Governmental Consultant Services (GCSI)

Name: Kirk A. Profit

Title: Owner/Director, Governmental Consultant Services Inc.

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

… Decades!!

What is a typical day like for you?

Every day is different with new challenges and opportunities as are presented [with a] broad range of issues facing our local community, region, and state.

What do you enjoy most about the A2Y Chamber?

The engagement of its leadership team and membership in issues that matter to our community and region.

What’s your favorite tip for someone in your industry?

Be relevant!

What is a surprising fact about your business?

Most of our clients are long term relationships spanning decades. While we continue to attract new clients with interests in impacting local, regional, and state decisions, we have a number of clients who have been with us for nearly 40 years.

If you would like to be featured in our Member Spotlight, contact us.

Member Spotlight: The Back Office Studio

Name: John Newman

Title: Community Manager, The Back Office Studio

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

We opened in 2018

What is a typical day like for you?

A typical day for The Back Office Studio involves giving individuals, remote workers and entrepreneurs a great place to do meaningful work. We have fast WiFi, conference rooms, phone booths, cafe seating, sit-to-stand desks, private offices, and fresh Hyperion coffee.

What do you enjoy most about the A2Y Chamber?

The A2Y Chamber is a great way for us to connect with other businesses in the Ypsi and Ann Arbor area. We love the programming and events that the chamber supports.

What’s your favorite tip for someone in your industry?

You don’t have to work at home or at a noisy coffee shop. We have a great space for you to do your best work in downtown Ypsi. Come join us for a day and see if coworking is good fit for your work.

What is a surprising fact about your business?

In a recent study of coworkers, 84% report that they are more engaged and motivated, 67% experience improved professional success, and 69% feel more successful.

If you would like to be featured in our Member Spotlight,contact us.

Member Spotlight: Beyond Primary Care

Name: Dr. Jeff O’Boyle

Title: Owner

How long has your company been a member of the Ann Arbor/Ypsilanti Regional Chamber?

Beyond Primary Care, a family medicine and addiction medicine clinic has been a member of the Ann Arbor/Ypsilanti Regional Chamber since October 2018.

What is a typical day like for you?

A typical day for Dr. Jeff O’Boyle involves getting out of bed early for a cardio, yoga, or weight work-out (need to do what I myself encourage my patients to do!) followed by a dog walk with my two huskies. Then I make an oatmeal or yogurt parfait breakfast and it is off to the clinic!

First I start my day by answering any emails from patients. Then I mix in patient appointments, in-clinic medication refills, in-clinic blood draws, business appointments, and personally following up with my patients over phone, webcam, or text.

I spend time in coordination of care between my patients and their other healthcare providers, as well as connecting to learn more about other physicians, chiropractors, naturopaths, pharmacists, health coaches, and nutritionalist in the community.

In the evening I head home, where making and sitting down for dinner with family is an important daily routine (also encouraging my patients to do the same).

What do you enjoy most about the A2Y Chamber?

As a small business owner, I know that great employees are important to success, and treating them like family helps build loyalty. I know how challenging it is to provide affordable health care for employees. As a physician, I also know that having health insurance does not guarantee healthcare. Through the chamber, I have had the absolute pleasure of meeting and connecting with some of the most genuine people and small business owners one could hope to meet in the community. I listen to the stories and concerns regarding the ever-increasing cost of health insurance and share everyone’s desire for affordable and accessible healthcare.

What’s your favorite tip for someone in your industry?

My advice is to keep innovating to add value to your services, never be content to rest on your laurels. At Beyond Primary Care, one way we provide innovation is routinely offering same-day access to appointments with minimal wait times with a dependable physician is who can address more than one concern at a single visit.

What is a surprising fact about your business?

Beyond Primary Care is a new approach to family medicine that creates the time and space that your health deserves. All appointments at Beyond Primary Care are a minimum 1 hour long. Our patients don’t have to stay that length, but the option is there for them. We love taking care of people who are looking for individualized healthcare, a strong and seamless doctor-patient relationship, and affordable and accessible healthcare that we create through eliminating the unnecessary overhead in the insurance model.

If you would like to be featured in our Member Spotlight,contact us.