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SURVEY INDICATES SMALL BUSINESS ON HOLD

 LANSING, Mich., Oct. 1 /PRNewswire/ -- Michigan's small businesses appear to be "on hold" until the Legislature and governor decide what taxes will be used to replace $6.9 billion in public school funds lost by the recent 65-percent cut in property taxes, according to research conducted by the Small Business Association of Michigan (SBAM).
 SBAM's September survey of 200 small business owners found that many are holding back on increasing wages, hiring new employees and making other major investments. Complete results will be published in mid- October in SBAM's "Small Business Barometer" newsletter.
 "In virtually all categories evaluating the business climate and their expectations for the next year, Michigan businesses indicated more neutral or cautious responses. We think this is due to concerns about the tax consequences of debate in Lansing over school finance reform," said Gary M. Woodbury, SBAM president.
 "They don't know yet what taxes or liabilities business may face next year and our survey results show fully two-thirds of Michigan small business owners are 'neutral' about the fairness of the tax system and the overall outlook for business." The neutral attitudes increased 8-12 points over previous surveys.
 Small businesses were asked specific questions about education reform and revenue replacement. They strongly support two options available to lawmakers: 88 percent favored raising the state sales tax and more than 89 percent favored cuts in the budget.
 But an overwhelming 97 percent opposed any increase in the single business tax.
 Some 64 percent of small businesses report they felt they were overtaxed compared to larger businesses. Only 30 percent agreed they shared a similar tax burden with large business.
 The Small Business Barometer survey showed nearly three of four business owners (73 percent) thought the decision by lawmakers and the governor to eliminate the property tax as a basis for funding public education was a positive decision. Only 17 percent said it was a poor decision.
 Nearly as many (68 percent) agreed that the decision to eliminate property taxes will be excellent or good for business.
 "But small businesses are generally skeptical of government; 64 percent told us that 'when all is said and done' on the issue of school finance reform, they believe they will be paying more in taxes than they did previously," Woodbury added. "This likely reflects the current trend of government to increase taxes overall."
 Concern about future tax liabilities also shows in reports that fewer than half the businesses expect to make major investments and only 29 percent expect to add employees in the future.
 "It will be interesting to see how this statistic changes in surveys which will be conducted after the Legislature restructures our system of funding public education," Woodbury said.
 -0- 10/1/93
 /CONTACT: Dennis Larson of SBAM, 517-482-8788, or 800-362-5461/


CO: Small Business Association of Michigan ST: Michigan IN: SU:

KE-MI -- DE025 -- 7904 10/01/93 15:45 EDT
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Publication:PR Newswire
Date:Oct 1, 1993
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