Arbor Update

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Should local government have "buy local" or "buy Michigan" policies?

4. February 2009 • Chuck Warpehoski
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In tonight’s State of the State address, Governor Granholm proposed:

Since I issued an order creating a preference for Michigan firms, over 85 percent of your tax dollars spent on state contracts have gone to Michigan businesses. In the year ahead, we will require other units of government in Michigan – our cities and townships, our counties and school districts, our colleges and universities – to adopt their own Buy Michigan First policies.

At their November 6 meeting, the County Commission voted against having County Council Corporation Counsel draft language for specifying a local vendor preference.

In light of the Governor’s challenge, should the County and other units of government consider “Local First” and/or “Michigan First” policies?

  1. I do think our local governments should have some sort of local or regional preference for their procurement. After all, it is local tax dollars that pay for the goods or services, so I support giving preference to local companies to provide the goods or services.

    That said, I would support some limits on such a policy. For example, I could see a policy giving local bidders a fixed percentage head start. That is, if 2 bids are within 10% (for example), the local company wins.

    The other advantage here is more money stays in the community, as Think Local First explains.

       —Chuck Warpehoski    Feb. 4 '09 - 06:40AM    #
  2. This is a “feel good” policy proposal but how much money is actually leaving the area or state? There may be some specialized equipment or vehicles that isn’t available from sources located in state but isn’t most local government spending going towards services, materials, etc. that come from local or state-based companies?

       —John Q.    Feb. 4 '09 - 08:40AM    #
  3. I think you meant the Corporation (county) Counsel. On rereading the story, it appears that the BOC failed to take up a motion for formulating a local vendor rule. This is different from voting against it. For one thing, under parliamentary procedure, the motion can be brought forth at any time in the future without being a “reconsideration”.

       —Vivienne Armentrout    Feb. 4 '09 - 08:49PM    #
  4. Whoops, my bad. They did vote against it. Sorry.

       —Vivienne Armentrout    Feb. 4 '09 - 08:51PM    #
  5. Vivienne, is there a difference between Corporation Council and County Council? I confess to not knowing how the county gets its legal services, so I changed the wording from the Chronicle article thinking it would make more sense to the readers. I apologize if doing so made it inaccurate.

    John Q., that concern is why I would support a local/Michigan First policy rather than a local/Michigan only policy. Can we get printing locally rather than out-of-state? Can we get parts for our fleet locally?

    I agree, we don’t want something so restrictive we get soaked on bids or that we can’t get the right products for the job, but I do think we can intentionally say that where we can the right product we are willing to pay a bit more to have the money support local firms and local workers (who help provide said tax dollars).

       —Chuck Warpehoski    Feb. 4 '09 - 09:20PM    #
  6. Chuck, his proper title is Corporation Counsel (not Council) – I don’t know the origin of the term but he is a full-time county employee. Informally, you could call him the county attorney. I believe that unlike the city model (where the City Attorney is hired by the City Council), the CC reports to the County Administrator. However, Curt was always very gracious, prompt, and complete in answering queries from individual commissioners in my experience.

       —Vivienne Armentrout    Feb. 4 '09 - 10:58PM    #
  7. The county currently has a local vendor preference in our procurement policy. The question we considered last fall was whether we should expend staff resources developing additional focus on that policy goal.

    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. (Much like our environmental responsibility clause).
    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.

    I voted against the move to strengthen this focus because I felt our current policies struck the proper balance between trying to advantage local bidders and getting the best value for the public’s investment.

       —Jeff Irwin    Feb. 4 '09 - 11:46PM    #
  8. I am not generally a fan of “buy local.” The cat’s out of the bag, the world has globalized.

    The policy described in #7 sounds about right to me.

       —Fred Zimmerman    Feb. 5 '09 - 07:37PM    #
  9. Thank you, Vivienne, for a clear explanation.

    According to the Chronicle’s coverage of the meeting, Curtis Hedger reported that the current preference applies only when all other things are equal, and according to the Chronicle, “However, he [Hedger] said, it’s extremely rare that all other things would be exactly equal, so that this law offered no practical benefit to local labor.”

    Hedger’s report did raise other questions about the legality of such a preference, which makes me wonder how the “Michigan First” policies the governor mentioned work.

    Either the State is in potential trouble for its policy or local governments can learn how the state managed this problem and consider if we want to follow that example.

       —Chuck Warpehoski    Feb. 5 '09 - 07:43PM    #
  10. For the state as a whole, this is a no-lose ordinance. Businesses based in Michigan do two things that non-MI businesses don’t: pay state business taxes and employ Michigan workers. Added to that is the multiplier effect – clearly money given to businesses located in Michigan will contribute more to our local economy than giving money to ones located elsewhere. To me that’s worth a state investment of giving them a preference.

    I don’t think it makes sense to have a preference for a smaller area like a County, but rather just encourage people to think about it a bit longer. I still can’t figure out why people really think it would be in the County’s interest to save 2% on a contact by choosing a national firm over supporting a business that employs our fellow residents and neighbors (and pays property taxes that benefit our area).

       —Lisa Dugdale    Feb. 6 '09 - 04:24AM    #
  11. I believe the best “bang for the buck” should be the criteria irrespective of where a product is manufactured. Call me “pro-globalist”. Protectionism is a notion of the past.

       —John Dory    Feb. 8 '09 - 02:04AM    #
  12. I think there’s a difference between imposing protectionist policies on others and choosing local preferences for oneself.

    A lot of conservative pundits have been trying to equate the US sourcing of steel in the Obama stimulus plan with Hoover-ere tariffs, but to my mind there is a word of difference.

    Tariffs require that everyone in the country either buy domestic goods or pay a premium for imports. Local preferences apply only to those who adopt them.

    For example, the “Michigan First” policies of Governor Granholm mean that the state will generally buy domestic automobiles, but it in now way limits your ability to buy a foreign car.

       —Chuck Warpehoski    Feb. 9 '09 - 08:07PM    #
  13. Personally I’d like to see the universities and all other state-supported organizations adopt these rules. As it is now, the UM hires a lot of out-of-state consultants.

       —KGS    Feb. 11 '09 - 11:11PM    #
  14. The further away you are, the more expert you become. Don’t you know that?

       —Marvin Face    Feb. 12 '09 - 12:22AM    #