Dr. Gary L. Wolfram

Michigan auto insurance premiums are among the highest in the nation. The American Association of Retired Persons, in a recent survey, found that Michigan’s premiums were the second highest in the nation, behind only Louisiana. This, combined with a statutory requirement to purchase insurance, has led to legislative attempts to keep premiums down. Unfortunately, state lawmakers have pursued an approach that includes price controls, regulation of how premiums may be set, and requirements for insurance companies to provide specific types of coverage. As the famous Austrian economist Ludwig von Mises pointed out decades ago, this kind of government intervention, while well-intended, leads to unintended consequences that then lead to further government interventions, further unintended consequences, in a lengthy cycle with results that no legislator would have expected at the beginning.
Rather than attempting to regulate insurance company and individual behavior, Michigan legislators would much better serve the people they represent by examining why insurance premiums are so high in the first place, in order to address the problem at its source. A careful study of Michigan’s insurance market and the regulations governing it indicates that no-fault insurance and the legislative requirement for individuals to purchase unlimited personal injury protection are two important reasons for the increased costs of providing insurance coverage in Michigan. The good news is that it is possible to reduce these costs and reduce the number of drivers who take the risk of violating the law and do not purchase insurance. … more

This pathbreaking approach to expanding parental choice in education embodies a proposal to amend the Michigan constitution and establish a Universal Tuition Tax Credit (UTTC). The tax credit would offset a portion of private or public school tuition and would be claimed against state tax liabilities. In addition to improving education, the UTTC would save the state hundreds of millions of dollars per year. Unlike other tax credit plans, the UTTC would help needy families with low state tax liabilities by encouraging the creation of corporate scholarships to offset tuition costs not covered by the UTTC. The per-student credit could be claimed against the Michigan tax liability of any person or corporation. Unlike vouchers, the UTTC would not allow state funds to support religious schools, would not drain funds from the public schools, and would not spawn new entitlements or overregulation of private schools. The study includes detailed fiscal models, a discussion of school choice, a history of Michigan's constitutional impediments to education reform, and proposed language for a constitutional amendment. 76 pages … more

Few issues are more emotional and controversial than how states care for children who are removed from families because of neglect, abuse or abandonment. This extensively documented report finds that it is less costly to place children in foster care supervised by private agencies than for this service to be provided by Michigan's Department of Social Services. Privatization of this important social service serves as a model for other states. 16 pages. … more

This analysis of Governor Engler's first year in office gives the governor high marks for balancing the state's budget without a tax hike. The governor is urged not to shrink from the politics of constructive confrontation with legislative "big spenders." Includes a review of his first year in light of the Road Map for a Michigan Renaissance, issued by the Mackinac Center in November 1990, and makes recommendations for the continued downsizing of state government. 3 pages. … more

The HOST program was created in 1989 ostensibly to assist first-time home buyers in saving for their down payments. Wolfram and Kaza point out the fatal flaws of the plan and expose HOST as a boondoggle of the first order. Their analysis was instrumental in bringing about revisions of the program under Governor James Blanchard and its ultimate abolition under Governor John Engler. 8 pages. … more

The seventeen communities of the Downriver Detroit area have traditionally been economically vibrant. Their decline in recent years is due in great measure to excessive tax burdens and the politicization of community services. The authors explain how this area can revive by rolling back property taxes, privatizing a number of municipal functions, avoiding government-directed economic development schemes, and making certain improvements to the transportation infrastructure. The many lessons from the Downriver experience are applicable to communities all across Michigan. 32 pages. … more