BENTON HARBOR — Is Michigan losing business to Indiana? Cornerstone Chamber of Commerce leaders say that's what's been happening since Michigan replaced the controversial service tax with a 22 percent business surcharge.

Now, a St. Joseph lawmaker says he has a plan to keep businesses from laying off employees or relocating to Indiana.

Brammall Supply Company is celebrating its 135th year and hoping for more.

"Our revenues are down by 20 percent from 2001. We employ five fewer people. We have 30 fewer customers in the area," said Ken Ankli, president of Brammall Supply Company.

Mid-size businesses that have survived the recession so far are now being hit with a 22 percent business surcharge tax.

"We were just informed that our taxes went up 226 percent, so I guess that's our reward for staying in. It's just not fair," said Ankli.

"That's the kind of cost a small firm, like ours, to step back and think twice about it. We are so close to the border here. We can easily pick up and move to South Bend," said Chris Cook, CEO of Abonmarche -- a company that already has an office in South Bend.

And Indiana is already extending invitations to "Come on IN."

"Billboards have sprung up along the Indiana and Michigan border drawing a distinction between the more competitive tax structure," said Representative John Proos, (R) St. Joseph.

Space is available in building after building in Benton Harbor.

Proos wants to prevent other businesses from leaving. That's why he's proposing to cut the 22 percent surcharge.

"Michigan's government grew by 75 percent during a time when businesses were laying off people," said Proos.

His proposal would eliminate the surcharge and make more than $390 million in budget cuts.

Businesses say it's a plan they can live and grow with.

"We want to pay our fair share that keeps schools viable," said Ankli.

Proos says his cuts would mainly come from welfare and streamlining the Department of Health. He says that combined with the state's $350 million surplus would cover Michigan's expenses.

This is the same proposal that didn't make it through the legislature last year.