Rep. DeRoche pursues item pricing reform

Craig DeRoche

Name: Craig DeRoche
Position: State Representative
District: 38th (Novi)
Political Party: Republican
Committees: Commerce (Vice Chair), Energy & Technology, Transportation, Regulatory Reform.

Background: Representative DeRoche was introduced to politics when he took a job with a congressional campaign during his last year in college. He received a bachelor’s degree in finance from Central Michigan University. After completing his degree, he was awarded a fellowship at Michigan State University’s Michigan Political Leadership Program.

DeRoche became increasingly involved in Oakland County politics in the 1990s. He was appointed to chair Vision 20/20, a group exploring what Novi should be like in 2020, and was elected to the Novi City Council in 1997 and 1999. He was elected to the House in 2002.

DeRoche has owned and operated small businesses in the areas of real estate, software and insurance. He is active in the Milford Presbyterian Church and was elected an elder by the congregation in 1996. He and his wife, Stacey, have two young daughters. When he’s not working, he enjoys golf and building furniture.

Q. You sponsored the bill that would amend Michigan’s item pricing law, an issue MRA has been working on for years. Is it finally time for this bill to get passed?

A. I think so. It was the first bill I put in this year, and I was proud to do it. I’ve been following the issue for a long time.

I’ve reached out my hand to the governor’s staff. I’ve already had a preliminary meeting with David Hollister—he’ll be the point person on this at what’s now called DLEG [the new Department of Labor and Economic Growth]. I told him I am trying to find a solution that protects consumers first but that, at the same time, allows economic development and job creation here in Michigan.

Michigan’s current item pricing law is now the only one in the country. Whether it is a large retailer or a small hardware store, this law interferes with retailers’ decisions about pricing and what their employees should be doing.

It’s an archaic law, based on the retail world of the 1960s and ’70s. Back then the concern was if each item isn’t tagged, then consumers aren’t in a position to defend themselves at the check-out if cashiers ring up the wrong price.

Now we have scanners in place, and what matters is whether scanners are getting prices right. A new law could actually improve scanner accuracy rates, which would help consumers much more than having a price tag on every item.

From a consumer’s standpoint, I think we miss out on a lot of dynamic pricing changes that could benefit us—markdowns that could happen if it were more cost-effective to do so.

Q. You were involved, in the final days of the budget negotiations, in the plan that reduced by 50 percent the single business tax on health care benefits. Tell us about that process.

A. A lot of us worked on getting the SBT reduced.

The scheme we designed was a 100-percent phase out over five years, and my bill covered the fourth year, which would have cut it by 80 percent by the end of that year. But the governor would only give up half of it, phased in over the next three years.

I think it’s a major win for retailers and other businesses in Michigan. It’s just common sense—we should not be taxing businesses for providing health care for their employees. This portion of the SBT puts businesses that offer health care benefits at a government-created disadvantage.

Q. A bill regulating gift cards, similar to one in California, is likely to come up before the House soon. Do gift cards need regulation?

A. My general reaction is that it’s another case of government getting into the retailers’ business unnecessarily. If retailers want to sell gift cards with terms and conditions attached to them, that’s their prerogative, as long as those are disclosed on the card.

I'm certain there's an expense to the retailer to track and maintain accounts on old cards. I wouldn’t favor this legislation.

Q. You strongly opposed the changes to the Workers’ Compensation Appellate Commission that were part of the governor’s general reorganization in her Executive Order. Why?

A. First, I have a lot of experience in workers’ compensation: I own a business that insures many Michigan workers.

Businesses leave Michigan, taking their jobs and economic development elsewhere, for one of three main reasons: the tax structure, the regulatory environment or the workers’ comp system.

In 1985, Governor Jim Blanchard was not prepared, politically, to lower taxes or improve the regulatory environment. So to keep jobs in Michigan, at a time of mass exodus, he created the Workers’ Compensation Appellate Commission.

The Engler administration honed and refined the system, so we now have a stable market that all parties involved understand and can work with.

The governor’s reckless move of replacing the Appellate Commission with her own appointees creates uncertainty and is likely to increase costs of workers’ compensation. Therefore, it works directly against Michigan, and does damage to our business climate.

The governor’s motive, apparently, was to improve efficiency, saving maybe hundreds of thousands at best, but this is over a system that handles hundreds of millions of dollars in direct business costs in Michigan. It’s penny-wise and pound-foolish.

Q. Your record shows that retailer concerns are a high priority for you. What has made you so actively pro-retail?

A. First, I’m a small business owner myself, so I deal with the same concerns as retailers. In addition, I represent a district that has a very retail-heavy tax base.

Back in the 1970s, Novi’s leaders made the decision that the area’s business tax base would be retail, around the time Taubman built Twelve Oaks mall.

That commitment continues to the present. When I was on City Council, we were still improving retail centers on Wixom Road and Grand River.

There’s a beautiful new Target store, along with Fountain Walk mall to complement existing developments at Novi Town Center and West Oaks. We have added a significant amount of retail space.

Therefore, just as item pricing is one of the top issues for retailers, it is for me as well. And like most retailers, I do not think the government should interfere with free-market forces that lead to competitive prices, nor should it force retailers to change the way they issue gift cards.

Supporting retailers’ interests in the Michigan legislature is good for my district, as well as for retailers around the state.