Michigan needs to become more cost competitive. This is not just my opinion or those of my fellow CEOs on the board of Detroit Renaissance. It is the conclusion of one of the most exhaustive benchmarking studies of our region by McKinsey and Associates.

Michigan ranked higher in costs than the states we most often compete against for both manufacturing and knowledge-based jobs. (Our manufacturing peers are Tennessee Valley, Chicago, Alabama and Seattle. In the knowledge sector: Houston, Chicago, Boston and Raleigh.)

...Some argue that because our tax burden on business is "about average" when compared to other states, we don't need to reduce taxes. But even if Michigan's taxes are calculated in the most favorable light, "average" isn't good enough when the taxes of states we compete with are "below average" and when most other business costs in those states are lower as well.

So how do we make Michigan more cost competitive? First, let's set a goal. Michigan should be among the top 10 states for the most competitive business tax climate. Second, let's make our business tax environment more stable and predictable. We can do this by adopting multi-year budgets and establishing a more effective forecasting process to avoid future fiscal surprises.

Finally, we can take an important step toward top-10 status by eliminating the 22% Michigan Business Tax surcharge and enacting some of the $1.5 billion in structural budget reforms the business community has proposed.