The MC: The Mackinac Center Blog

September 23, 2016 MichiganVotes Weekly Roll Call Report

Out with old in with new licensure mandate; increase legislature transparency; more

House Bill 4282, Exempt small-project home repair contractors from licensure mandates: Passed 66 to 40 in the House

To exempt individuals who do residential repair and rehab jobs worth less than $4,000 from licensure mandates imposed on contractors.

Who Voted “Yes” and Who Voted “No”

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House Bill 5469, Extend open records law to legislature: Passed 100 to 6 in the House

To extend the Freedom of Information Act to legislators, whose offices are currently exempt, subject to a broad range of exceptions and exemptions. The House also passed House Bill 5477, which extends the disclosure requirements to certain kinds of documents held by the governor's office.

Who Voted “Yes” and Who Voted “No”


House Bill 5475, Exceptions to applying open records law to legislature: Passed 100 to 6 in the House

To define the records that would be exempt from Freedom of Information Act requests to the state legislature under House Bill 5469. These include standard provisions on records dealing with security matters, active contract bidding, information of a personal nature or business proprietary records, records that violate attorney-client privilege or involve ongoing litigation, etc. The bill would also exempt records of exchanges between a lawmaker and a constituent. Notably, records held by the Republican and Democratic caucus staffs would also be exempt, including their communications and public relations operations.

Who Voted “Yes” and Who Voted “No”


House Bill 4822, Ban social promotions for third graders who can’t read: Passed 60 to 47 in the House

To prohibit “social promotions” of third graders who have not reached minimum reading benchmarks starting in the 2019-2020 school year, subject to many conditions and exceptions, and with requirements that additional interventions and tutoring be tried before a student is actually held back. This final version of the bill allows a school district superintendent make an exception but not teachers or principals, and only if the student is proficient in other subjects.

Who Voted “Yes” and Who Voted “No”


House Bill 5826, Ban government suing person who submits open records law request: Passed 102 to 5 in the House

To prohibit public bodies from suing a person or entity making document requests authorized by the state Freedom of Information Act.

Who Voted “Yes” and Who Voted “No”


House Bill 5651, Let new port authorities give private company partnership status

To permit a government port authority to grant partnership status to a private business or developer, which would permit them to operate and collect revenue from the facility. New port authorities would not get half their expenses paid by the state like existing ones, but would be able to keep any annual profits rather than turning them over to the local and state government.

Who Voted “Yes” and Who Voted “No”


House Bill 4580, Require "claw back" provisions in some selective tax break deals: Passed 35 to 0 in the Senate on September 21, 2016

To require that starting in 2017 local governments and a state "Next Michigan Development Corporation" must include "claw back" provisions in new tax break deals they selectively grant to particular corporations or developers, allowing foregone taxes to be demanded if the beneficiary does not abide by the terms of the tax break agreement. This applies to property taxes levied on business tools and equipment ("personal property tax").

Who Voted “Yes” and Who Voted “No”


Senate Bill 570, Exempt certain sportsmen club property from property tax: Passed 24 to 10 in the Senate

To exempt property owned by sportsmen or gun clubs from property tax if they let governments use their facilities, provide gun safety classes to the public, and have other pro-social practices specified in the bill.

Who Voted “Yes” and Who Voted “No”


Senate Bill 1022, Create process for disclosing police firing to other agencies: Passed 35 to 0 in the Senate

To establish a process and give a liability exemption that lets one police agency disclose information to another about a formerly-employed officer who may have been fired. A “separating” officer would be allowed to review the record and add a written explanation to it. Police job applicants would have to sign a waiver allowing these records to be shared with a prospective employer.

Who Voted “Yes” and Who Voted “No”


Senate Bill 1015, Impose licensure on applied behavioral analysis: Passed 34 to 1 in the Senate

To impose licensure on practitioners of “applied behavioral analysis," with $90 annual license fees and other fees, regulations, scope of practice restrictions, education and experience requirements, and more.

Who Voted “Yes” and Who Voted “No”


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

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Lawsuit Filed to Fight Michigan’s Ban on Tesla Sales

Skorup weighs in with USA Today and the Detroit Free Press

Tesla is taking its fight to sell vehicles directly to consumers in Michigan to the courtroom.

According to an article published by USA Today and the Detroit Free Press, the electric automaker is suing Michigan Secretary of State Ruth Johnson, Michigan Attorney General Bill Schuette and Gov. Rick Snyder over a 2014 state law requiring manufacturers to sell vehicles through dealerships. Tesla, much like Apple, wants to sell directly to consumers.

A bill introduced this year by Rep. Aaron Miller, R-Sturgis, would allow Tesla to sell vehicles in Michigan by allowing direct-to-consumer sales.

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Jarrett Skorup, a policy analyst with the free-market think tank Mackinac Center for Public Policy that supports changing the law, said that people should be able to freely sell goods, and supports Tesla’s position that it should be able to sell vehicles in Michigan without interference from dealerships.

Tesla argues in the lawsuit that Michigan’s law violates the Fourteenth Amendment’s due process and equal protection clauses.

Michiganders wishing to purchase a Tesla may only do so by going to another state. Illinois, Indiana and Ohio all have galleries where consumers may buy a vehicle directly from the company.

Read the full article in USA Today here.

Read the full article in the Detroit Free Press here.

Read more about the ban on Tesla’s sales in Michigan here.

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The Nov. 8 North Dakota ballot initiative to raise cigarette excise taxes by 400 percent will — if adopted — increase cigarette smuggling and cause other unintended consequences.

We have studied cigarette evasion and avoidance (what we call “smuggling”) around the United States for a decade and have developed a statistical tool for measuring the degree to which cigarettes are smuggled across state and international borders.

Our model of smuggling — which uses data through 2014 — tells us that for every 100 cigarettes consumed in North Dakota, another 11.6 are smuggled out to other states, mostly neighboring ones such as Minnesota. There is no illicit inbound traffic.

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We can run “what if” scenarios with our statistical model to estimate future smuggling rates based on proposed excise tax increases. We find that, after raising excise taxes to $2.20 per pack, North Dakota will stop being a cigarette “exporting” state. Instead, cigarettes smuggled into the state will become 16.6 percent of the total market. That is, of all the cigarettes consumed in North Dakota, more than 16 percent will have been smuggled in through one of two means: casual or commercial trafficking.

Casual smuggling typically involves people buying less expensive cigarettes for personal consumption. They do this through online purchases or going to a different taxing jurisdiction, such as an Indian reservation or another state. Commercial operations, by contrast, involve long haul, large shipments from distant states such as Virginia or North Carolina.

With the current excise tax at 44 cents per pack, almost 100 percent of the North Dakota-related smuggling is casual. People in neighboring states drive across the border to buy smokes and return home. But under the higher tax scenario, most smuggling will be inbound, and commercial.

Our model compares legal tax-paid sales with reported smoking rates by state. The difference between the two must be explained, and we — and other scholars — attribute it to smuggling. The model also controls for important factors that may influence measurements, such as border county populations and the presence of Indian reservations.

The reservation variable is important because there are four tribes in North Dakota which may be a convenient source of lower-priced smokes. A 2014 National Bureau of Economic Research paper titled, “Reservation Prices: An Economic analysis of Cigarette Purchases on Indian Reservations” looked at this problem. It conducted a survey of 6,539 smokers that roughly 19 percent of them “always” buy their smokes on one of New York’s reservations.

Some states — such as Washington — try to minimize reservations as a source of cheaper smokes by negotiating tax compacts with their tribes. Such compacts typically require tribes to collect state-level excise taxes on sales to nontribal members. North Dakota has one such compact. We’re not yet sold on their efficacy. Taking away the incentive for consumers to shop on reservations just creates an incentive for individual tribal members to become a source of cheap cigarettes themselves.

The state of Washington’s tax compacts have still not prevented it from having high smuggling rates. We estimate its 2012 smuggling rate at 48 percent of the total market. Only three other states had higher rates that year. Would the absence of tax compacts have changed that fact? We’re not the only scholars to estimate smuggling rates. In 2015, a team of researchers hired by the United States Congress (and using data through 2012) published their own analysis and estimated Washington’s smuggling rate at 45.5 percent.

To give the reader an idea of how profitable the trade in illicit cigarettes is, consider one example. In 2013 a California man pleaded guilty for his work in trying to smuggle millions of cigarettes shipped from China to the Port of Newark in New Jersey. They were then shipped to California for distribution. If smuggling is profitable at those distances, imagine what profits await organized crime syndicates that send loads of cigarettes from Nebraska or Missouri to North Dakota.

The massive profits that await smugglers have inspired every other sort of mischief. In the highest profile (but not only) case of its kind, North Carolina men ran vanloads of cigarettes to Michigan and used part of their profits to support the Hezbollah, a known terrorist organization. At other times, cigarettes have been brazenly stolen by thieves who cut through the roofs or break through the walls of legal, cigarette wholesalers and retailers. Other thieves hijack trucks for their cargo of cigarettes. The list goes on.

Supporters of this initiative may mean well, but the costs associated with the tax increase may outweigh the benefits.

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Closest Thing to Immortality? Government Programs

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State Policies Created School Pension Pain

Union Survey: Michigan Teachers Want Pension Reform

Only 12.2 percent of MEA members feel they will have a comfortable retirement

The Michigan Education Association recently released a survey of some of its membership. Much of it isn’t surprising — like other workers, teachers want to make more money and don’t like how they are evaluated.

But one key question is about retirement and shows that school employees don’t feel secure with the current teacher pension system.

The survey asks: “Do you feel that you’ll be able to comfortably retire?” Only 12.2 percent answered “yes,” while 52.2 percent said “no,” and 35.6 percent were unsure.

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There is reason to be concerned. The teacher pension system, MPSERS, has nearly $27 billion in unfunded liabilities. Government pension systems across the state are underfunded and causing real cuts of government services.

The way to protect the retirements of teachers is to stop enrolling new employees into this underfunded system and give them 401(k)-type plans instead. This would allow workers more flexibility and control over their retirement, cap the current plan’s liabilities, force the state to start paying down the debt and prevent future underfunding.

Learn more at www.InOurHandsMI.com.

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Pugsley Correctional Facility to Close

Michigan's prison population on the decline

Pugsley Correctional Facility in Kingsley, Michigan, is slated to close later this month, on Sept. 24.

The state’s FY 2016-17 budget calls for the Department of Corrections to close the Pugsley Correctional Facility to save money, a compromise struck by a conference committee between the Senate proposal to close two prisons, and the House plan to close none. Lawmakers expect that closing the 1,342-bed facility will save $22 million.

Declining prisoner population made the move possible: the department reports that the population has declined to under 42,000 from an all-time high of over 51,500 in March 2007. It has closed and consolidated more than 25 facilities since 2005.

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The Department of Corrections attributes the prisoner population decline to decreases in felony court sentences and, therefore, fewer prison admissions. It reports that 2015 was the third year in a row in which prison intake declined, especially among prisoners incarcerated for new crimes.

These findings are consistent with research showing a dramatic decline in violent crime both statewide (where current crime rates are nearly half of what they were at their 1986 peak) and nationally.

The Michigan State Police credits a policing program called the Secure Cities Partnership with improving public safety in Michigan. The MSP 3rd District Commander Capt. Gene Kapp told a Senate subcommittee that violent crime fell 40% in Saginaw and more than 45% in Flint since 2012, when the Secure Cities program began. Property crimes also dropped by 34% and 40%, respectively.

Secure Cities relies on an effort known as “community policing,” which operates by putting more law enforcement officers on the streets to build ties with members of the local community. A recent report by the Police Foundation and the Charles Koch Foundation underscores the importance of trust between communities and law enforcement agencies.

The report examines the experiences of foot patrol officers in five cities: Cambridge, CT, Evanston, IL, Kalamazoo, MI, New Haven, CT and Portland, OR. It found that, in addition to increasing a sense of safety among community members and job satisfaction among officers, foot patrols encouraged more people to tell the police about crimes and other concerns. The additional information made it easier for the department to solve problems and prevent crimes.

Preventing crime may be the single most important cost-savings measure available. The University of Michigan estimates that a murder costs society over $1.5 million in medical care and the loss of property, public service, and future earnings – not to mention the $35,000 annual cost of imprisoning the murderer.

Law and policymakers should keep those considerations in mind when addressing the tremendous cost of corrections in this state. As the Pugsley Correctional Facility closure demonstrates, safely and successfully reducing the prison population depends heavily on our ability to continue preventing and reducing crime. This occasion is an ideal time to review the outcomes of our law enforcement practices and to focus on the ones that are proven to be effective.

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More to Charter Special Ed Gap than Meets the Eye

Disability types, local conditions drive disparity

Charter schools, like all other public schools, cannot legally turn away children with physical, intellectual and emotional challenges. Nevertheless, the numbers reported to state officials bear out that Michigan charters — as in many other states — serve lower rates of special-needs students. A closer look reveals that blame for this apparent discrepancy cannot be placed at the feet of charter school operators.

In a November 2015 MLive story, Tim Wood, the head of the Grand Valley State University’s Charter Schools Office, attributed charters’ smaller enrollments of more severely disabled students to greater parental satisfaction with existing arrangements.

Last month, Bridge Magazine reporter Chastity Pratt Dawson told WDET Radio host Stephen Henderson that some Detroit charters subtly turn away children with costly learning challenges by suggesting other nearby schools could better serve their needs. She raised the shortage of qualified special education instructors as a real part of the challenge.

The observations from both sources likely contain elements of truth. But without further study, they remain interesting anecdotes and thoughtful speculation that don’t advance the policy conversation in productive ways. The analysis that follows raises questions about the broad applicability of these observations, and suggests other dimensions that need to be explored.

The state of Michigan’s Center for Educational Performance and Information collects and reports a fair amount of data on special-needs student characteristics and educational services at the individual district or charter level. The most recent data cited here is from the 2015-16 school year.

(The number of students a district or charter enrolls in a specific special-needs category is not reported if fewer than five. Most students are accounted for though in the group totals. However, those with rarer diagnosis classifications may be slightly undercounted, especially in smaller charter populations. But it’s unlikely that these disparities affect the general findings.)

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Michigan’s intermediate school districts directly serve only about 23,000 students, but 70 percent of them have special learning needs that qualify them for an Individualized Education Program. Combined with conventional school districts, special education students represent 13.2 percent of the population of district and intermediate school district enrollments. Charter schools serve about 149,000 students, 10.1 percent of whom have an IEP. That’s 3 percentage points lower than the district and ISD rate, a real gap but smaller than the 3.9 percentage point difference reported by the National Center for Special Education in Charter Schools from 2011-12 data.

Taking ISDs and their specialized services out of the mix, however, reduces the gap between conventional and charter schools. Not including ISD enrollments, 12.1 percent of students enrolled in district schools have IEPs, only a 2 percentage point difference with charters. Further, the gap disappears altogether with a look only at the most common and treatable conditions. Cases of learning disability, speech impairment and a category that includes attention deficit/hyperactivity disorder and conditions like asthma, epilepsy and diabetes combine for 70 percent of Michigan IEPs. These cases cover about 8.8 percent of conventional district students and 8.6 percent of charter students.

The greatest disparity can be found among students with autism, emotional disturbance, vision or hearing impairment, or other severe physical and mental handicaps. Michigan charter schools would have to double the current estimated 2,200 students served in these categories to match the rate of conventional districts.

Another enrollment disparity can be found in Wayne County, Michigan’s most populous county. There, special education students make up 13.8 percent of conventional districts, compared to only 9.1 percent for charters. In Michigan’s other 82 counties the difference shrinks to less than one percentage point: 11.9 percent for districts and just under 11 percent for charters. Outside of Wayne County, the average charter school actually enrolls a higher rate of less severe special needs students than the average district school.

Local funding and operations can explain some of the discrepancy as well. The Wayne County Regional Educational Service Agency, the ISD that covers Detroit Public Schools and 32 other districts, operates center-based programs for students with “more severe impairments.” These programs, housed only in conventional districts, receive access to millions in Act 18 local millage funding, and likely contribute to the districts enrolling more special needs students than charter schools in the county. If these programs were also operated by charter schools, their special education enrollments would be higher.

Other large ISDs — covering Kent, Oakland, Macomb and Ingham counties — do not dedicate all their local special education tax dollars to center-based programs run by local districts. And in each of these counties, the special education enrollment gap for charters is much smaller than in Wayne.

More in-depth investigation could follow along the lines of research Boston University professor Marcus Winters has done in both Denver and New York City. Winters found “remarkably similar” explanations for both cities’ special education enrollment gaps. Traditional districts tend to identify more students with learning disabilities, and fewer students with disabilities apply to enter a charter — corroborating Dr. Wood’s assessment. Winters’ research left very little room for potential charter discrimination as an explanation, and it could be the case that similar trends explain the special education enrollment gap between conventional districts and charter schools in Michigan.

Similar research in Michigan would be welcomed and may help settle this debate. Nonetheless, based on the information available on special education enrollment in this state, it appears unlikely that charter schools are systematically turning away students with special needs.

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September 19, 2016 MichiganVotes Weekly Roll Call Report

Blasts-from-the-past on road funding, same-sex adoptions, civil asset forfeiture and more

While legislative committees were active this week, no votes were taken in House or Senate. The Roll Call Report therefore continues its review of key votes from the 2015-2016 session.

House Bill 4522, Expand legislative subpoena power: Passed 69 to 39 in the House on June 2, 2015

To give certain committees of the legislature the explicit authority to subpoena and investigate records of local governments, authorities, school districts and community colleges. At least one member of the minority party would have to agree. Under current law committees can subpoena state agency personnel and private citizens. The Senate has not voted on this bill.

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Who Voted “Yes” and Who Voted “No”


House Bill 4505, Increase civil asset forfeiture burden of proof: Passed 103 to 6 in the House on June 4, 2015

To require a more rigorous “clear and convincing” burden of proof standard in the law that gives police agencies the power to seize and sell a person’s property if it may be connected with an illegal drug crime, even if the person is not charged or convicted. Under current law property may be taken under the least rigorous "preponderance of the evidence" standard.

Who Voted “Yes” and Who Voted “No”


House Bill 4505, Increase civil asset forfeiture burden of proof: Passed 38 to 0 in the Senate on October 7, 2015

The Senate vote on the bill described above.

Who Voted “Yes” and Who Voted “No”


House Bill 4605, Road funding votes, earmark some income tax for roads: Passed 62 to 47 in the House on June 10, 2015

To earmark a portion of state income tax revenue to road funding, starting with $192 million in 2016 and increasing to $717 million in 2019.
Following the overwhelming defeat of a May, 2015 ballot initiative requesting $2 billion in tax increases for roads and more, the House and Senate traded competing alternative proposals, of which this was one of the first. The Senate did not vote on this bill, but similar provisions were eventually included in a successful road funding package.

Who Voted “Yes” and Who Voted “No”


House Bill 4609, Road funding votes, EITC repeal: Passed 57 to 52 in the House on June 10, 2015

To eliminate the state earned income tax credit, which grants recipients an amount equal to 6 percent of the federal EITC. The EITC is a "refundable" tax credit that sends checks to low income workers totaling around $115 million annually, which would be reallocated to road funding (see previous bill). The Senate did not vote on this bill, and the repeal was not included in the final road funding package.

Who Voted “Yes” and Who Voted “No”


House Bill 4607, Road funding votes, shift corporate subsidies to roads: Passed 60 to 49 in the House on June 10, 2015

To no longer spend $75 million annually on various direct and indirect subsidies granted to corporations and developers under the “21st Century Jobs Fund” rubric, and instead use this money on road repairs. House Bill 4608 defunds other subsidies, but both bills require spending to continue for government tourism industry promotion ("Pure Michigan" ads). Neither bill was voted on in the Senate, and the proposals were not part of the final road package.

Who Voted “Yes” and Who Voted “No”


House Bill 4189, Let adoption agencies refuse adoptions that violate moral convictions: Passed 65 to 44 in the House on March 18, 2015

To establish that a private adoption or foster care agency is not required to assist or participate in an adoption or placement that violates its written religious or moral convictions, including adoptions of a child by a same-sex couple. State agencies would be prohibited from discriminating or taking an “adverse action” against an agency for this reason.

Who Voted “Yes” and Who Voted “No”


House Bill 4189, Let adoption agencies refuse adoptions that violate moral convictions: Passed 26 to 12 in the Senate on June 10, 2015

The Senate vote on the bill described above.

Who Voted “Yes” and Who Voted “No”


House Bill 4052, Preempt local employer wage, benefit or labor law mandates: Passed 57 to 52 in the House on May 20, 2015

To preempt local governments, public schools, state colleges and universities, and other governmental authorities from imposing mandatory wage, benefit, leave time and other requirements on employers that exceed those required by state or federal law.

Who Voted “Yes” and Who Voted “No”


House Bill 4052, Preempt local employer wage, benefit or labor law mandates: Passed 23 to 15 in the Senate on June 17, 2015

The Senate vote on the bill described above.

Who Voted “Yes” and Who Voted “No”


Senate Bill 211, Authorize uncensored public school American heritage instruction: Passed 30 to 8 in the Senate on June 11, 2015

To require public school boards to “permit” instruction and reading of “America's founding documents” including those related to the country’s “representative form of limited government, the Bill of Rights, our free-market economic system, and patriotism.” School districts would be prohibited from censoring or restraining reading that includes “religious references in original source documents, writings, speeches, proclamations, or records.” This bill has not been taken up by the House.

Who Voted “Yes” and Who Voted “No”


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

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Michigan Must Stop Keeping Peoples’ Property Without Conviction

Skorup discusses civil forfeiture on Michigan Radio

Michigan lawmakers took some important steps last year to reform Michigan’s civil forfeiture laws, but there’s still plenty of work to be done.

Mackinac Center Policy Analyst Jarrett Skorup spoke with Lester Graham on Michigan Radio’s Stateside program about the practice of civil asset forfeiture. Under this practice, law enforcement may seize private citizens’ property, regardless of whether or not that person has been convicted of or even charged with a crime.

The problem in Michigan and around the country is this isn’t just done in the criminal realm, it’s done in the civil realm, which is why it’s called civil forfeiture. … When assets are seized and go through the civil system, it can happen before anybody is charged with or in many cases even accused of a crime. So the government is able to take people’s property even though they might actually not have done anything wrong.

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While Michigan has recently added transparency and reporting requirements to the process, Skorup said civil asset forfeiture should be done away with altogether.

If the police want to take ownership of somebody’s property, they should have to prove and convict them of a crime. Michigan has the worst of a couple different worlds here because the money goes back to the department that initially seized people’s assets, so you have this incentive process set up and it’s been admitted by law enforcement. This is used to pad their budgets and that’s not how a criminal justice system should work.

Skorup said property should only be seized if a person is convicted of a crime and a judge and jury determine that property was connected to that crime.

Listen to the full interview at Michigan Radio here.

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An Opening for Michigan Licensing Reform

When the state asks for higher fees, repeal the mandates

Ski areas cost more to regulate than they paid in licensing fees in Michigan.

A recent MIRS report, “State Collects 32% More In Fees Than It Cost to Regulate,” notes that the state brings in $147 million in revenue for licenses and permits. But the total cost to regulate Michigan’s variety of industries was much probably much higher.

The Michigan Department of Licensing and Regulatory Affairs, or LARA, is in charge of overseeing the occupations state law requires to be licensed. In theory, the fees collected for an occupation should pay the cost of regulating that occupation but that rarely works out in practice.

According to MIRS, the state gained $25.5 million in revenue from fees from stockbroker and investment firms, but spent only $4.5 million regulating them. It brought in $46,880 from carnivals and amusement rides, but spent $390,401 overseeing them. Ski areas paid $15,676 in fees while costing the state $339,552 to regulate. Many professions subsidize other occupations or within their own departments.

Last year, Michigan’s licensing apparatus collected a total of $54.3 million in fees while spending only $37 million. So, on the whole, the nearly 200 occupations licensed by the state are paying more than in fees than what it costs the state to regulate these industries. This gives credence to the notion that part of the state’s interest in regulating occupations is simply to generate revenue.

For regulating occupations that are not paying for themselves, the head of LARA blamed fee structures that are decades old and set in statute, and there is a point to that. The department plans to go to the Legislature and ask for some of these fees to be raised.

But before policy makers agree to increase fees, they should consider other options. First, the state should try to limit how much some occupation’s licensing fees subsidize the cost of regulating other occupations. The state collects a lot of revenue in fees from building contractors and nurses — but these professionals should not be paying the cost to oversee landscape architects and barbers.

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More importantly, legislators should eliminate licensing requirements for occupations that do not have a clear connection to public safety concerns. This will eliminate costs for LARA and, according to empirical evidence, likely give the economy a boost by reducing the costs of individuals entering the labor market.

Unless requiring an occupational license can be proven to benefit public health and safety, the state should not bother with creating a regulatory scheme for an occupation. Too many of Michigan’s licenses do not meet this standard.

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Markets, Not Politicians, Slow State Oil and Gas Production

From 'obscene profits' to 'obscene losses'

The Detroit News recently reported that low oil prices have resulted in a decreased number of new oil and natural gas wells around Michigan. As a result of the slowing markets and dropping prices, the industry is seeing losses mount and is laying off hundreds of thousands of employees across the country. The article notes that Michigan is setting record lows in the number of drilling permits, with accompanying job losses. In fact, Energy Information Administration (EIA) numbers indicate that oil production in the state actually reached a 25-year low in 2015.

This revelation isn’t terribly surprising, as the hardships being faced by the oil and gas industry are well known. But one section from the article did stand out.

Mega oil companies such as Exxon Mobil Corp. and BP PLC are saddled with massive debt and generating ‘obscene losses’ that are ‘unlike anything we’ve ever seen before in history.’ …

Forty publicly traded U.S. oil producers last year lost a combined $67 billion, according to an EIA report released in April. Exxon Mobil, BP, Royal Dutch Shell PLC and Chevron Corp. hold a combined net debt of $184 billion — more than double than in 2014, The Wall Street Journal reported this week.

The term “obscene” in relation to energy companies is interesting. Flash back a decade or so ago and it was applied in a much different context.

In April 2006 — when the crude oil price was at approximately $67 per barrel — a CNN news item quoted bipartisan views on how to address oil prices and industry profits.

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Amid rising gas and oil prices, a leading Republican said on Sunday that the U.S. government should consider imposing a windfall tax on oil company profits.

‘I think it's something worth considering among a number of options,’ Pennsylvania Sen. Arlen Specter, chairman of the Judiciary Committee, told CNN's ‘Late Edition.’...

Sen. Carl Levin, a Michigan Democrat, told CNN's ‘Late Edition’ on Sunday, ‘We need a windfall profits tax, because these profits have been absolutely obscene.’

When oil companies are making “obscene profits,” elected officials on both sides of the aisle trip over themselves to impose a “windfall profits” tax. Of course, Sen. Specter has passed away and Sen. Levin has retired, but many people currently in office had made the same call for windfall taxes.

Now that oil prices are near an all-time low, these calls have died down. But it is markets, not environmentalists or politicians, which have driven down prices for consumers and led to these “obscene losses” that are “unlike anything we’ve ever seen before in history.”

Don’t hold your breath waiting for politicians to stick with their “windfall” logic by demanding aid to help address the financial pressures the industry is facing. That logic only holds when it can help expand government spending. Of course they shouldn’t demand aid, just as they shouldn’t demand additional taxes. Government officials should allow competitive markets to work and, thereby, produce greater prosperity for everyone.

It is more realistic to expect that when the energy market turns around, elected officials will go back to their demagoguery. But people should keep politicians’ track record in mind the next time they engage in a craven grab for headlines, more money and more political power.

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