Doubling the corporate income tax will harm workers
A union-sponsored group called Citizens for Fair Taxes is organizing a signature-gathering petition campaign for a November 2016 ballot initiative that would nearly double the state’s main business tax. The new money would be earmarked to state and local road projects. The proposal would increase Michigan’s Corporate Income Tax from the current rate of 6 percent to 11 percent.
This would reportedly extract some $900 million more each year from Michigan enterprises, but the costs of nearly doubling the tax-based disincentive to invest and run a business in Michigan could be much higher.
A Lesson from Recent Past
The proposal, if enacted, would move Michigan from having a fairly competitive business tax rate to having the second-highest nationwide.
Michigan already has a wealth of experience with the consequences of being a state with a high business tax burden. In 2007, the widely reviled Single Business Tax was replaced by an equally damaging gross receipts tax called the Michigan Business Tax (MBT). That same year, the Legislature and Gov. Jennifer Granholm imposed a 21.99-percent surtax on the new tax.
Before a reform in 2011 that made the state business tax simpler, fairer and less burdensome, the Tax Foundation ranked Michigan 49th for corporate income taxes.
The high tax rate contributed to an unfriendly business climate, and in turn, Michigan’s “lost decade” of joblessness. Within two years of the MBT’s implementation, the 2008 financial crisis and recession hit, and the state unemployment rate shot up from 7 to 12 percent.
Once the MBT was replaced in 2012 by a simpler and lower Corporate Income Tax, Michigan has performed significantly better economically. The state’s unemployment rate is down to 5.3 percent.
If all that recent history isn’t enough to make Michigan voters wary of piling on businesses, they should know that a tax increase aimed at business owners and investors could wound working families most of all. That’s because the party targeted by a tax and the one paying it are not necessarily the same.
Business tax incidence — who pays matters
A review of the extensive research and evidence prepared for a U.S. Treasury publication supports the argument that the owners of and investors in businesses subject to the proposed 11-percent tax would not be the ones who pay. The authors concluded that “labor may actually bear a substantial burden from the corporate income tax.” A National Tax Journal article suggests that in an open economy, labor bears 40 percent of the cost. Other scholars offer evidence that as much as 70 percent of the burden can fall on labor.
This record contrasts sharply with the results imagined by organizers of the petition campaign.
Let's eliminate the corporate income tax instead
Harvard economist Greg Mankiw’s research found nearly 50 percent of all tax revenues lost from eliminating the federal corporate income tax would be regained from higher business productivity. He estimates that a reduction in corporate taxes spurs nearly three times more recovered revenue than an equivalent reduction in personal income taxes.
So if Michigan totally abolished the Corporate Income Tax tomorrow, about half the $1 billion of foregone revenue would make its way into the state’s coffers indirectly from the immense growth resulting from better incentives for businesses investment.
Boston University economist Laurence J. Kotlikoff writes that the elimination of the federal corporate income tax, combined with a “somewhat” higher personal income tax, would result in a surge of capital. The U.S. capital stock would increase by 23 percent, real wages (for skilled and unskilled workers) by 12 percent and output by 8 percent. Eliminating the state corporate income tax would yield similar effects.
The bulk of the economic literature shows that of all taxes, business taxes are the most economically damaging to state prosperity. William McBride, chief economist with the Tax Foundation, reviewed 26 studies about the effect of taxes on growth. He found that hikes in the corporate tax rate were more damaging than income, consumption, or property taxes.
Even left-leaning economists acknowledge the unexpected tax-incidence effects. Eliminating the corporate income tax even made it to the list of ideas on a public radio feature, “6 Policies Economists Love (And Politicians Hate).”
NPR’s Theo Francis gets it, saying: “Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.”
Instead of increasing the corporate income tax rate, Michigan legislators should consider reducing or eliminating it altogether and joining the ranks of the six states that have managed to survive without it. As the Tax Foundation put it, “The lesson is simple; a state that raises sufficient revenue without one of the major taxes [corporate, personal, or sales] will, all things being equal, out-compete those states that levy every tax in the collector’s arsenal.”
The Mackinac Center has noted in the past the top ten states with the most economic growth do not have one of those major taxes. The Mackinac Center’s Michael LaFaive writes: “We found that since 2000 (and ending in 2009), these states enjoyed average real state GDP growth of 22.4 percent while those that have all three taxes grew only 13.4 percent. Maybe that’s just coincidence — taxes aren’t the only factor that contributes to state growth and decline — but I wouldn’t want to bet on it.”
By eliminating the corporate income tax, Michigan can become a leader by boosting state GDP and most importantly, the income of all of its citizens, rather than dragging workers’ incomes down.
Addressing the Proposal
Michigan has already been through a “Lost Decade,” thanks in part to an unfriendly business climate. Increasing the Corporate Income Tax wouldn’t help the state economy, and almost surely would harm it measurably.
Gov. Rick Snyder gave his reason to oppose the measure in a recent MLive op-ed:
“[Michigan’s] reformed tax climate, like our talent, ingenuity and the famous Michigan work ethic, is one of the factors that have brought companies from around the country and around the world to locate here.”
Snyder identifies how jobs have moved back to Michigan as a result of the rollback of policies such as the Michigan Business Tax and the implementation of simpler tax codes such as the current Corporate Income Tax.
Increasing the tax rate hurts corporations and consumers alike. There are many unintended consequences that would result were voters to approve the proposal in 2016. Reverting to yesterday’s failed policies will harm the workers and families of tomorrow.
Addressing overcriminalization and civil asset forfeiture
In an article published August 20, Bridge Magazine discussed recent collaborative efforts toward criminal justice reform in Michigan.
The Mackinac Center has been at the head of this movement, joined by such organizations as the ACLU of Michigan and Fix Forfeiture, advocating for civil asset forfeiture reform.
In May, Gov. Rick Snyder announced support for a number of reforms that would improve Michigan's overcriminalization problem, many of which came from a Mackinac Center study.
Reforms will save taxpayers money, improve judicial outcomes, and protect Michiganders' property rights. Michael Reitz was quoted for the article in Bridge:
Michael Reitz, executive vice president of the Mackinac Center, also called for “getting rid of unnecessary or duplicative criminal laws” as a start to criminal justice reform.
“This is the right time to be having this conversation,” Reitz said.
The full article is available at Bridge Magazine's website.
Bills move on to full Senate
The Senate Judiciary committee unanimously passed five bills that establish strong transparency requirements for property forfeited in Michigan.
The bills have are House Bill 4499, 4503, 4504, 4505, and 4506. They were supported by Senators Rick Jones, R-Grand Ledge, Tonya Schuitmaker, R-Lawton, Patrick Colbeck, R-Canton, Tory Rocca, R-Sterling Heights, and Steve Bieda, D-Warren.
The bills have already passed the State House and now head to the full Senate. If passed there, they would go to Gov. Snyder for his signature.
70 percent of schools contract out for some services
This summer, the Mackinac Center its annual school privatization survey, finding that more than 70 percent of school districts in Michigan contract out for services such as food, transportation, and custodial work.
The findings have been publicized across the state. Michigan Radio wrote the following:
James Hohman of the Center says privatizing helps districts trim their payroll. Districts must pay about 25% of payroll into the state's severely underfunded pension plan.…
He says the state needs to stop overestimating the plans' returns – or move teachers into defined contribution plans like 401(k)s, "and until they do, it's just going to encourage more districts to contract out their support services."
The rest of the article is available on Michigan Radio's website.
One bad outcome is not a reason to abandon privatization
For years the Mackinac Center for Public Policy has argued that — done right — governments could save money and improve services through privatization. That is, through selling assets or competitively contracting out services such as food, janitorial or busing services in conventional public school districts, governments can get better services with lower costs.
Unfortunately, the state signed a deal with Aramark Correctional Services for food services in state prisons that was troubled from the outset. The contract is now ending early after the two parties failed to reach an agreement on contractual amendments proposed by the company. There were problems reported from the beginning over shortages, unacceptable contact between Aramark employees and the prison population, and the smuggling of contraband goods (such as tobacco) into prisons.
The state and Aramark agreed to end the contract early and the state has turned to a different contractor rather than bring the work back in-house.
Failure in one instance does not mean the practice should be abandoned altogether. Nor does it mean that it should be abandoned in this specific instance. Should the United Parcel Service disappointment me I need not turn to the U.S. Postal Service; I can turn to Federal Express. That is what the state has effectively done by turning to Trinity Services Group of Florida to take over the prisons’ food service.
The state chose not to acquiesce to pressure from the Michigan-based American Federation of State, County and Municipal Employees Council 25 that once represented state prison food workers. The local wanted to bring the work back in-house. Michigan’s affirmation of privatization follows on the heels of a similar action in Ohio. There, the state rejected a union’s call to bring work back in house; instead, it extended a similar contract with Aramark.
In every transaction, there are two parties. The contractor has a responsibility to live up to its agreement, as does the government, which must closely monitor its demands.
The Aramark-Michigan situation is a good example of how privatization agreements are like marriages. Both parties share responsibility for making things work, and communication, trust and dispute resolution are critical to success. When one or both parties fall short in these areas — as appears to have been the case here — then it may make sense to either adjust the arrangement so that it fulfills the needs of both parties or end it entirely.
Not every instance of privatization is going to go well. Michigan and other states have experience with failed contracts. The state’s highway road maintenance experiment in the 1990s is a case in point. That contract ended among an array of complaints, though perhaps not all of them were fair. The occasional failure of participants to execute a contract well is no reason to turn away from privatization. Prisoners are both guarded and fed well by private sector providers around the country.
Perhaps the most puzzling thing about the Michigan food service contract is that Aramark does not seem to have vigorously defended itself, at least in public. It is a global corporate powerhouse with countless hours of experience providing food services in and out of prison systems.
It would be helpful to know why it was difficult for Aramark to ensure that its employees not fraternize with prisoners, for example. Why did the company seek to amend its contract to address billing and food menus? Such information could be useful to improve the situation moving forward, but Aramark has been strangely — though perhaps strategically — quiet.
At the end of the day it takes two to have a contracting tango. Perhaps both partners in this dance were burdened with two left feet, but it is hard to know from the public pronouncements. What is known is that done right, contracting can save money and improve services. This one contract should not serve as an excuse to forgo the benefits of privatization.
Michael LaFaive is director of the Morey Fiscal Policy Initiative with the Mackinac Center for Public Policy
Leonard Gilroy is director of government reform at the Reason Foundation.
Celebrating National Employee Freedom Week
(Editor’s note: A version of this article appeared on the Illinois Policy Institute Blog.)
National Employee Freedom Week started on August 16th and celebrates the freedom of choice employees have when it comes to union representation.
The Mackinac Center joined over 99 organizations in 42 states in what is called “a national effort to inform union employees about the freedoms they have to opt out of union membership and let them make the decision that's best for them.”
The week is sponsored by the Nevada Policy Research Institute and the Association of American Educators and was created to inform union members of the varying options available to them. According to NEFW polling, one in five Michigan union-member households did not know about these rights.
Worker Rights in Union Membership
Across the country workers have the ability to decide if they want to be a member of a union. If they are at a unionized worksite they can choose to stay in their union or resign their membership.
The NEFW website provides information and a generic form to help employees with the process of opting out of union membership, should they so choose. The Mackinac Center offers similar services: www.MIworkerfreedom.org for all Michigan workers and www.AugustOptOut.org for public school teachers.
Unfortunately, even with the help of these pro-worker organizations, unionized employee freedom varies depending on where they live, and almost no union worker has the freedom to represent themselves.
Rights in Forced Unionism States
In forced unionism states, unions can get workers fired for refusing to pay them. However these workers still have some rights.
Employees without worker freedom protections can become “agency fee payers.” Fee payers still pay a majority of their dues to a union but can resign their membership and receive a refund from the portion of their dues that goes directly to politics. However, they still must support what is known as internal union communication, which could be very political. Examples include union internal magazines and emails which contain messages of support for specific candidates or causes.
The ability to become a fee payer is rooted in two Supreme Court decisions: Communications Workers v. Beck for private sector employees and Abood v. Detroit Department of Education for public sector workers. These cases establish that employees have a first amendment right not to associate with union politics with which they disagree.
In June 2015 the U.S. Supreme Court agreed to hear the case Friedrichs v. California Teachers Association. This could give public employees the right to refrain from providing any support to government unions. The rational of the plaintiffs in Friedrichs is that all government union actions are inherently political, and any money going to these organizations is forced speech.
However, the Supreme Court has not rendered a decision in Friedrichs, and it will only apply to government employees. Currently, the only way all workers can fully stop supporting a union is if their state has a right-to-work law.
Rights in Right-to-Work States
In the 25 states, including Michigan, workers can fully opt-out of supporting a union they disagree with. Unlike the force unionism states, unions cannot require these workers to pay them on pain of being terminated from their jobs.
Workers and unions in right-to-work states can still negotiate over pay, hours, working conditions, and almost anything they can negotiate for in forced unionism states. Collective bargaining is almost exactly the same in right-to-work states as it is in forced unionism states.
Fully Free — Workers Choice
Even with right-to-work, workers are still not fully free. While they are not required to pay a union they must still accept union representation. Workers are unable to negotiate for their own working conditions and must operate under the terms established by the union collective bargaining agreement.
In almost all cases where a union organizes a company, they are given a monopoly over representation called “exclusive representation.” This means that they represent and negotiate for all employees at the job, whether the workers want it or not.
In order to be fully free workers should have the option to represent and bargain for themselves. A new concept called “Worker’s Choice” could allow workers to say “no thanks” to unwanted representation and allow unions to say “goodbye” to workers who do not want to associate with them.
Since this is a relatively new concept, no workers have this right yet. But thanks to projects like NEFW workers across the country are being better informed of their rights. Workers need to have the right to decide whether or not they want to support and associate with a union. NEFW is a great time to get information on making an informed decision.
New total up from 66 percent in 2014
There are more Michigan public schools contracting out food, custodial or transportation services than ever, according to the Mackinac Center’s latest survey of school districts. This year, 70.8 percent of school districts use private-sector vendors to clean buildings, get kids to school, or cook and serve school meals. This is up from 66.6 percent the previous year.
Getting more of the private sector involved in a supporting role in school districts is a long-term trend. In 2001, only 31 percent of districts contracted out these services and it took a decade before more than half of districts contracted out.
Our survey was performed between May 18, 2015, and August 4, 2015, and received responses from every Michigan school district for whether it used private-sector vendors to provide food, custodial or transportation services.
The biggest change has been in custodial services. Our 2003 survey found only 34 districts contracted out this service. In 2015, 283 of Michigan’s 542 districts contracted out these services.
School food services are highly-regulated enterprises and the federal government subsidizes meals for many children. There are a few companies that have specialized in helping districts provide this service. In 2003, 27.3 percent of districts contracted out these services. This proportion increased to 42.8 percent in 2015.
But it is not exclusively large firms that offer their services to districts. For instance, the Dalwhinnie Bakery and Deli on Beaver Island provides food services to students at the Beaver Island Community School.
There is a growing number of school districts that use private-sector contractors to bus students to and from schools. There were 18 districts that began new transportation contracts between the 2014 survey and the 2015 survey and now 144 of Michigan’s 542 districts (26.6 percent) contract out this service.
In addition to specialized knowledge and experience of vendors, there are other considerations regarding the contracting of services such as increased economies of scale in purchasing and tested management techniques that can help districts save money. Unfortunately, the underfunding of the school pension system weighs the cost-benefit calculations in favor of private-sector provision of services.
Schools are required to send between 28 and 33 percent of payroll to Lansing to cover the costs of retirement benefits. The bulk of these payments go to paying down unfunded liabilities in the system. When a district contracts out employees, their retirement benefits tend to cost between 5 and 7 percent of payroll, resulting in substantial savings from contracting out, regardless of any other changes.
The growth of private-sector vendors providing their services to school districts allows school officials to spend more of their resources on educating students. Our survey shows that contracting out for support services has continued to increase over time.
Times have been tough, but the American Dream is still alive
Bridge Magazine has a piece on “Michigan’s stumbling middle class” and says, “today’s workers are part of the first generation in Michigan history who, taken as a whole, are not better off than their parents.”
The main economic data point put forth is that adjusted for inflation, Michigan’s median household income is lower than it was in 1969. That’s true: Household income has declined from $64,778 in 1969 to $49,418 in 2013.
But that’s not the end of the story. And by nearly all measures, we are much better off today than in the past.
There are two ways to improve your material standard of living. First, earn more. Second, buy more with what you have earned.
Related to the first point: Median household income has in fact declined, but not quite as pronounced as the article makes it seem. The average household size has dropped from 3.14 people to 2.54 since 1969. Adjusting incomes accordingly produces the not-nearly-as-shocking result that median household income per person was only 6 percent higher in 1969 than it is now.
Also, income, as reported in many official statistics, is not the same as a person’s total compensation. As noted by Daniel Smith, a professor at Troy University:
Over the last few decades, employees have been receiving an increasingly larger portion of their overall compensation in the form of benefits such as health care, paid vacation time, hour flexibility, improved work environments and even day care. Ignoring the growth of these benefits and looking at only wages provides a grossly incomplete picture of well-being, and the increase in compensation for work. While it is difficult to adjust for all of these benefits that workers are now receiving, one measure of wage and salary supplements show they have nearly tripled since 1964. Total compensation, which adds these benefits to wages and salaries, shows that earnings have actually increased more than 45 percent since 1964.
For a variety of reasons, household incomes have declined more in Michigan than in many other states. But total compensation per person has almost certainly increased in real dollars.
For the second point: It is indisputable that an inflation-adjusted dollar today goes much further than it did during previous generations. Here are a few key ways how, as I have noted in the past:
- “Rising incomes and lower food prices mean the percent of personal income spent on food by Americans has fallen 60 percent since 1940, from 25 percent of family budgets to 10 percent — a steady decline for decades. Americans spent about 42 percent of their income on food in 1900.”
- “Transportation spending has declined since the 1980s (and today’s vehicles are safer, more reliable and get better gas mileage).”
- “The average house size has increased more than 1,000 square feet since 1973 – with smaller families.”
- “For the nonessentials, things like refrigerators, washing machines, stoves, toasters, vacuum cleaners and televisions, they are more affordable than ever. As UM-Flint economics professor and Mackinac Center Scholar Mark Perry reports, it required almost 900 hours of labor to afford these amenities in 1959 — today, it requires less than 200 hours of work.”
Michigan is coming out of a historic lost decade, but things aren’t as bad as some would make it seem. When you consider new technologies that are getting cheaper and better every day and how the standards of living across income levels have converged – it’s a great time to be alive.
Evidence piles up against public investment in stadiums and Olympic dreams
In July, Boston withdrew its application to host the 2024 Summer Olympic Games, becoming the latest city to respond to citizen concerns and cold hard facts about sports entertainment and public investments.
The Olympics seem to live in perpetual jeopardy, plagued by financial mismanagement and corruption. Bloomberg estimates that the 2004 games in Athens contributed €7 billion to Greece’s now-crippling debt. Russia spent billions failing to turn Sochi into an acceptable Olympic venue. China has struggled for years to get its money’s worth out of the 2008 Beijing infrastructure.
The Olympics have long been heralded as a great opportunity for the host city to showcase its unique culture and attract tourists. But research suggests the benefits do not offset the costs, and with the bulk of the price tag falling on taxpayers, citizens of prospective cities have begun to revolt.
Tokyo recently agreed to go back to the drawing board with the main stadium for the 2020 games after Japanese taxpayers expressed anger over its rapidly rising construction costs. Beijing will host the 2022 winter games, winning the bid over Almaty, Kazakhstan after Oslo, Stockholm, Munich, Krakow and St. Moritz, Switzerland all withdrew their applications — mostly after referendums revealed a public firmly opposed to the expense. People love to watch the Olympics, but they don’t love paying for it.
While the Olympics take bad government investment to a new level with every cycle, the same thing happens on a smaller scale every year. Heavily subsidized athletic venues don’t come with the same multiple-billion-dollar-price tag, but corporate welfare can do damage with far less. It’s time publicly subsidized stadiums get an Olympic-sized bad reputation.
NPR estimates that taxpayers have spent over $20 billion subsidizing stadiums for the NFL, MLB, NBA and NHL since 1990. Michigan taxpayers have certainly contributed a share to that total, specifically in Detroit, where parks for the Tigers and Lions have benefitted from government handouts. The Red Wings joined the list recently, with a new arena in the making that uses at least $284.5 million in public funds in a city that exited bankruptcy less than a year ago.
Public disapproval has ended the Olympic dreams of many cities across the world, and it could end the publicly funded stadiums of local sports teams, as well. It is too late to avoid subsidizing the new Red Wings facility, but with the Pistons floating a move into Detroit city limits from their current location in Auburn Hills, there will be ample opportunity to push for private funding in the future.
As for the Olympics? If the International Olympic Committee wants a future filled with democratic host countries as well as autocratic ones, it must make some reforms: relaxing its unreasonably high standards for public expenditure and allowing cities to use structures and housing that already exist rather than forcing them to build dozens of unnecessary venues and an Olympic Village.
But in the end, sporting spectacles generating billions of dollars should pay their own way — not rely on the taxpayer.
Recently introduced bills of interest.
The House and Senate are out for several weeks. Therefore, this report contains several recently introduced bills of interest.
Senate Bill 324: Require policy for police involved in a death
Introduced by Sen. Coleman Young, II (D), to require local police and sheriff departments to have a policy on deaths that involve a law enforcement officer. This would have to include requiring an investigation by two officers who are not employed by the same agency. Referred to committee, no further action at this time.
Senate Bill 326: Establish B-24 Liberator as symbolic "state airplane"
Introduced by Sen. Rebekah Warren (D), to establish that the B-24 Liberator flown by the U.S. Army Air Force and Navy in WW II shall be deemed the “official airplane” of the state of Michigan. The B-24 was a sophisticated four-engine bomber produced in huge numbers by the Ford Motor Company on an unprecedented mile-length assembly line at the purpose-built Willow Run plant in Wayne County. Reported from committee, pending before full Senate.
Senate Bill 340: Increase penalties for tobacco sales to minors
Introduced by Sen. Steve Bieda (D), to increase the penalties for selling tobacco to minors, from $50 to $100 for a first offense, and $500 for a subsequent offense. The increased penalties would also apply to a minor who tries to buy or who possesses tobacco. Reported from committee, pending before full Senate.
Senate Bill 352: Authorize “designated caregivers” for hospital patients
Introduced by Sen. Margaret O'Brien (R), to require hospitals to give patients the opportunity to designate a friend or family member as the individual’s “designated caregiver.” Hospitals would have to notify this person when the patient is transferred or released, consult with them about the discharge plan, instruct them about the patient’s needs after discharge, etc. Referred to committee, no further action at this time.
Senate Bill 370: Authorize alcohol manufacturer retail shop tax breaks
Introduced by Sen. Jack Brandenburg (R), to exempt from sales tax the tools and equipment purchased by a brewer, winemaker or distiller create products it sells directly to customers at its own locations. Reported from committee, pending before full Senate.
House Bill 4511: Revise state oil pipeline regulation
Introduced by Rep. Sarah Roberts (D), to give the Department of Environmental Quality explicit authority to regulate pipelines used to transport oil or petroleum; mandate that pipeline owners have “emergency response plans” for pipeline leaks that include consultation with local governments; require pipeline owners to pay for regular state inspections of underwater pipelines and more. Referred to committee, no further action at this time.
House Bill 4512: Impose oil pipeline “impact fees”
Introduced by Rep. Jeff Irwin (D), to authorize the imposition of an annual per-mile oil or petroleum “pipeline impact fee” in an amount that would be determined by the state Public Service Commission, with half the revenue given to the county where a pipeline is located. Referred to committee, no further action at this time.
House Bill 4515: Mandate employers create job description for each position
Introduced by Rep. Erika Geiss (D), to mandate that employers must create a job description for each position. This would have to include “a list of the essential duties and responsibilities; a description of the skills, training, and effort required to perform the job; and the working conditions and schedule.” Also, to mandate that these be available to job applicants, and prohibit employers from changing a job description until the employee has a chance to review and initial the change. Referred to committee, no further action at this time.
House Bill 4531: Impose licensure on “naturopathic physicians”
Introduced by Rep. Lisa Lyons (R), to impose licensure and regulation on “naturopathic physicians,” with license fees, education requirements, and more. The bill defines “naturopathic” medicine as “a system of practice that is based on the natural healing capacity of individuals.” Referred to committee, no further action at this time.
House Bill 4551: Authorize energy efficient new home purchase tax breaks
Introduced by Rep. Derek Miller (D), to authorize a $5,000 income tax credit for a person who buys a new home that has been deemed a “green structure” by a particular private entity specified in the bill (“Green Built Michigan”), and a $2,000 credit for an addition or renovation that meets this entity’s criteria, or by a similar one if authorized by a state agency. Referred to committee, no further action at this time.
House Bill 4559: Prohibit independent Strategic Fund revenue and spending
Introduced by Rep. Martin Howrylak (R), to cut off the Indian casino compact revenue stream that currently flows automatically to the Michigan “Strategic Fund,” which is the parent entity of the Michigan Economic Development Corporation. This money is used to support the agencies’ corporate subsidy-granting operations. The bill would declare all Strategic Fund revenue and assets to be “public money and assets,” and only disbursed through an appropriations bill passed by the legislature. Referred to committee, no further action at this time.
House Bill 4560: Use some auto injury reserve fund money for roads
Introduced by Rep. Peter Lucido (R), to take $1 billion from the insurance reserve fund of the Michigan Catastrophic Claims Association (MCCA), and use it for road repairs. The MCCA is the reinsurance provider that covers unlimited vehicle crash medical claims when they go above $545,000, coverage that is mandated by the state no-fault auto insurance law. Referred to committee, no further action at this time.
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.