Lawmakers should reject latest proposal for more
In support of a new business subsidy program, Business Leaders for Michigan writes, “Michigan can no longer afford to be the only state besides Alaska with a corporate income tax – without a program to attract large projects.” But this misleading, because Michigan has dozens of programs that deliver select favors to certain businesses.
The Citizens Research Council gives a list and description of the economic development programs available to businesses in Michigan. It lists 53 programs offered by the state, local and federal governments. The report is 166 pages long. Some of the programs mentioned are no longer handing out awards, but most are.
And CRC’s report isn’t all-inclusive. It doesn’t include the Michigan Business Development Program or the Community Revitalization Program that will cost taxpayers $101.5 million this year. Gov. Snyder called for $14 million more for these programs in his budget for next year. The MBDP alone has offered over $300 million in taxpayer money to select businesses since its inception in 2012.
Based on their historical performance, these programs are more about press releases than jobs. Plus, they invite corruption and do not justify their costs. Lawmakers should stop creating new, similar programs.
BLM also writes in their blog that the state needs “a simple but potent tax incentive that’s transparent [and] doesn’t pick winners and losers ... One that will help grow our communities and grow our families’ paychecks.”
That’s a good idea. The easiest way to make that happen would be to cut the income tax for everyone, rather than just handing out more business subsidies for a select lucky few.
Senate bills 111-115 being considered
The Michigan Legislature is considering a package of bills that would give a few lucky developers special subsidies. Senate Bills 111-115 are unfair, ineffective and irrational and lawmakers should reject them.
These bills allow a handful of well-connected builders to get subsidies paid for from money that would otherwise fund government programs. Someone who starts a development — say, a sports stadium — would be selected by Lansing and, after putting up the initial capital, be able to take money from taxes paid by nearby individuals and taxpayers and keep it.
The research on these types of deals is clear: Tax increment financing and other selective business subsidies don’t work. For two decades, Michigan’s MEGA program — which gave tax breaks to corporations — created less than 20 percent of the jobs it promised while 96 percent of projects failed to live up to expectations. Research showed that MEGA had zero or a negative impact on job growth, but taxpayers are paying out billions because of it. Recent studies of TIF programs, similar to what these bills allow, show they result in fewer jobs and lower income and do little to help local cities.
Michigan legislators recently rejected a bill to cut the income tax rate for everyone, saying it would be too costly. How can we afford subsidies for big business when we can’t afford a tax cut for families? Rather than give away up to $1.8 billion in taxpayer money to well-connected crony capitalists, lawmakers should allow regular people to keep more of what they are owed.
Members of the House Tax Policy are now considering the bills. The lawmakers on that committee, who can be reached through the links below, are:
Jim Tedder, R-Clarkston
David Maturen, R-Vicksburg
Martin Howrylak, R-Troy
Klint Kesto, R-Commerce Township
Peter Lucido, R-Shelby Township
Hank Vaupel, R-Fowlerville
Steven Johnson, R-Wayland
Bronna Kahle, R-Clinton
James Lower, R-Ionia
Wendell Byrd, D-Detroit
Sheldon Neely, D-Flint
Jim Ellison, D-Royal Oak
Abdullah Hammoud, D-Dearborn.
Illinois used to gain net population from Michigan
Editor's Note: The following was authored by Madelyn Harwood, a policy writer for the Illinois Policy Institute, and originally posted on the blog of the Illinois Policy Institute. It is reposted here with permission.
Illinois once enjoyed an annual population boost from Michigan. But in Illinois’ downward economic spiral, migration between Illinois and Michigan has tipped to favor the faster-growing Wolverine State.
For eight of the past 10 years, Illinois gained population from Michigan, adding nearly 15,000 Michiganders, on net, from 2006 through 2013, according to data from the U.S. Census Bureau. The gains over those years largely coincided with the 2008 meltdown of the automotive industry during the Great Recession and Michigan’s ensuing economic crisis. This 15,000 net gain for Illinois – comparable to the population of Dixon – was a modest but valuable source of new residents at a time when the Land of Lincoln was losing population to most surrounding states.
Foolish policy decisions in the Land of Lincoln and smart ones in the Wolverine State have in recent years helped reverse the flow of Illinois-Michigan interstate migration. Altogether, in 2014 and 2015, Illinois lost more than 4,000 residents, on net, to Michigan. This reversal is not a one-sided phenomenon: It’s the result of both fewer Michigan residents moving into Illinois and more Illinois residents moving into Michigan.
What explains this change? In general, Michigan has offered more opportunities and lower costs for families seeking work while Illinois’ economy has sputtered.
Michigan is more pro-growth and less expensive than Illinois
Michigan is seeing enhanced economic opportunity, which can drive new investment in the state. Michigan’s economic growth correlates both with the revival of the auto industry and with smart policy changes in the Wolverine State. Since enacting Right to Work in March 2013, for instance, Michigan has seen faster jobs and income growth than Illinois, which lacks Right-to-Work legislation. According to a 2016 Chief Executive Magazine survey, nine of the 10 best states for business had Right-to-Work laws.
Michigan is also beating Illinois in the competition for manufacturing jobs. That’s partly because Illinois’ highest-in-the-region workers’ compensation costs deter manufacturing investment. Workers’ compensation represents a major expense for manufacturers, so it’s in their interest to operate in states with lower costs. Compared with Illinois, Michigan’s workers’ compensation premium rates are roughly 30 percent lower.
A relatively lighter tax burden in Michigan also benefits both businesses and residents. Compared with Illinois, Michigan’s property taxes and corporate income taxes are each approximately 23 percent lower, and the state’s sales tax is about 31 percent lower than Illinois’ average combined sales tax rate. And while Illinois currently imposes a lower personal income tax than Michigan, the Illinois Senate is fighting to raise both corporate and personal income taxes to levels above Michigan’s rates.
Moreover, unlike in Illinois, Michigan policymakers have succeeded in reducing the strain of cost drivers – such as public pensions for policymakers and their staffs – on the state’s budget, which minimizes the need to raise taxes while making the state more sustainable in the long term.
Although Michigan’s economy would stand to gain even more from additional policy improvements, it is still faring far better than Illinois’. In fact, from December 2012 through December 2016, Michigan experienced the strongest jobs growth in the region at 7.4 percent, compared with Illinois’ 3.9 percent, the worst in the region. Michigan also added 2,500 manufacturing jobs in 2016, while Illinois lost 11,000.
Making Illinois more competitive
Illinois is accustomed to losing net population to its neighboring states, but it hasn’t always lost to Michigan. This about-face should sound the alarm for Illinois policymakers, who must admit that structural, pro-growth reforms are needed to improve the state’s economy and prevent its descent into insolvency.
Commonsense policy changes, such as reforming workers’ compensation to bring costs more in line with those in other states and enacting Right to Work, would make Illinois more fertile for jobs growth. Similarly, lawmakers should make Illinois a more affordable place to call home by implementing a property-tax freeze to protect home values and boost the housing market, as well as fixing cost drivers – such as government-union collective bargaining and pensions – that trigger perennial calls for tax hikes.
Illinois is clearly on the losing end of the ongoing “border wars” for industry and population, and state policymakers shouldn’t stand idly by as the state digs itself deeper into obsolescence.
This should be ‘science 101’
On March 6, members of the House Science, Space, and Technology Committee introduced the Honest and Open New EPA Science Treatment Act of 2017 (HONEST Act). At the same time, Reps. Frank Lucas, R-OK, and Lamar Smith, R-TX, proposed legislation to reform the Environmental Protection Agency’s Science Advisory Board.
Rep. Smith explained why the HONEST Act was introduced. “An open and honest scientific process is long overdue at EPA. American taxpayers have often had to foot the bill for regulations and rules based on hidden science that has not been available for review by the public. … This bill would prohibit any future regulations from taking effect unless the underlying scientific data is public.”
He also defended the Science Advisory Board Reform Act of 2017. “The SAB at EPA,” he said, “has the opportunity to include a more balanced group of scientists to assist EPA in fulfilling its core mission.” He added, “This bill would ensure that scientists advising EPA on regulatory decisions are not the same scientists receiving EPA grants.”
The Office of Science Advisor within the EPA says, “Science is the backbone of EPA's decision-making. The Agency's ability to pursue its mission to protect human health and the environment depends upon the integrity of the science on which it relies.”
The OSA continues by describing the importance of scientific integrity, using words like objectivity, clarity, and reproducibility. It also notes that scientific integrity “helps to build public support” as “people are more likely to support the Agency if they can trust the quality and integrity of the work.”
On those matters, I’m confident that most people would agree. The public should expect federal agencies to use credible, reproducible, and transparent science to support their regulatory efforts.
As President Reagan noted, though, we can trust, but should still verify, and the average person should not be viewed as unreasonable for asking “Why?” when faced with new, life-changing regulations. “Just trust us” is not good enough when regulations will affect the availability or expense of energy, cost people their jobs or raise prices and restrict access to essential goods and services.
Of course, this isn’t the first effort by Congress to impose transparency on the EPA. The Secret Science Reform Act of 2014 and 2015 both attempted to address this issue. However, some in the Senate attacked the bills as laughable and even insane. President Obama promised to veto the bills if they ever made it to his desk.
Smith says, though, that the EPA has not lived up to its stated commitment to scientific integrity. Others agree; the agency has faced a growing chorus of critics who say it is not transparent and uses questionable practices when it appoints scientists to its advisory board.
For example, the Energy and Environment Legal Institute has worked for years, using Freedom of Information Act requests and lawsuits, to force transparency on the agency.
The institute’s work has revealed, among other things, that EPA Administrator Lisa Jackson had secret email accounts. Additionally, EPA staffers were found to have used personal email accounts, apparently to avoid federal requirements for preserving and reporting data. The institute also found out about a string of secret meetings and communications between senior EPA officials and environmental groups carried on while the agency was preparing energy-focused regulations.
The Senate Environment and Public Works (EPW) Committee also experienced difficulties when dealing with the EPA. In April 2016, Sen. Jim Inhofe, a Republican from Oklahoma who chaired the committee, sent a letter to EPA Administrator Gina McCarthy describing a strained, multi-year interaction between the EPA and the committee. He noted serious “concerns the agency is not committed to a transparent or meaningful public input process” for selecting members of the advisory board.
Transparency in this area is absolutely essential as the board is the primary means of peer review for the EPA’s science. However, the Congressional Research Service has shown that, in 2014, board members had received substantial EPA-funded research grants. Those grants raise the obvious question: To what degree (if at all) has the presence of a substantial funding relationship affected the peer review decisions of the agency’s advisory board?
The Mackinac Center for Public Policy has a consistent track record of calling for transparency from all levels of government and publicly funded organizations. This case is no different.
Some will bemoan demands for transparency in EPA science and peer-review processes as a partisan attempt to hinder the agency. But the reality is that open, public access to the science underlying regulation — the science that affects everyone’s lives and the science we have all paid for — should be a basic, first principle. Furthermore, we should be able to expect that the peer review process EPA regulators tell us is trustworthy is not carried out by scientists who also rely on the agency for funding.
These expectations are eminently reasonable. In fact, they should be science 101.
Happy ‘Sunshine Week’ 2017
In simple terms, government is a group of people using resources that belong to the public. Since these funds were earned by taxpayers, they have a right to know exactly how their government is using their money.
Sometimes government entities do things that conflict with what’s in the best collective interest of the public, many times in secret. In the wake of the Watergate scandal, there was an increased interest in making governments more transparent. In response, politicians created the Freedom of Information Act, or FOIA, as it’s commonly called. FOIA is perhaps the most important tool that journalists and the public have to keep governments accountable. These laws differ by state, but they all give citizens the right to request and receive information from public entities.
March 12-18 is “Sunshine Week,” a national event celebrating “your right to know” information about your government. To show the importance of this week and government transparency laws, here are some of the key ways we’ve used Michigan’s FOIA law to hold public entities accountable.
- From 2006 to 2012, the state of Michigan transferred millions of dollars each year from day care providers and home caregivers to unions to use for political purposes. Most of the 100,000 people affected had no idea they were even in a union. Nevertheless, unions skimmed tens of millions of dollars in dues from government subsidies meant for the poor and disabled before legislators finally put a stop to it. We were able to expose this tragic scheme largely from public records we obtained through FOIA.
- Every year, taxpayers are spending millions of dollars on “union release time” and “pension spiking” schemes. Public records requests to all 540 school districts turned up the dozens of school districts that redirect money meant for educating students to release time. They pay union officials and release them from all of their public duties, such as teaching. Instead, these officials work full-time for their union on the taxpayer’s dime. And union officials across the state have also entered into agreements where they pretend to work for school districts while actually working for a private union, in order to gain extra pension benefits — which taxpayers fund, of course.
- The Flint water crisis rocked the state in 2015 and 2016. It was hard for anyone to know who was responsible and how much blame-shifting was going on. Our simple FOIA was delayed for four months when we tried to get to the bottom of some of the issues. (Other reporters eventually broke key stories.) We’ve filed a lawsuit against the state to ensure openness going forward.
- FOIA requests to every school district showed that less than 0.001 percent of all tenured teacher are ever fired, including those who were caught kissing and assaulting students, using drugs and committing other criminal acts. The Legislature eventually passed a bill making it easier to get rid of bad educators and, today, districts report far fewer of these problems.
- After the president of the University of Michigan made disparaging remarks about supporters of President Donald Trump, we requested documents to understand why a university president would make disparaging comments about some of his students. The university took more than 100 days to give us four documents, but denied others related to the request. Given our commitment to government openness, you shouldn’t be surprised about this: We’re now in the middle of a lawsuit about it.
- In Michigan, school districts must use merit as the main driver for teacher compensation. But most of the state’s largest school districts ignore the law, instead basing pay strictly on degree-level and seniority. We learned of this through FOIA requests we sent to school districts.
- The Detroit Land Bank’s blight demolition program has come under scrutiny and was subject to a federal investigation for wasted funds and inefficiencies. An open records request showed that the person accused of wrongdoing was simply transferred to another department with a pay cut, while taxpayers are out over $800,000.
- Detroit Public Schools borrowed and spent more than $500 million to upgrade facilities. Despite the massive influx of funds, more than dozen schools (which each received millions for upgrades) were cited for health and safety violations. We used a FOIA request to show how much they got and what the violations were.
Though Michigan’s FOIA laws are powerful, they still have flaws. The state should close loopholes that allow public entities to delay giving information for months. Both the governor and the Legislature should be subject to the law, a practice other states follow. And legislators should continue to pursue changes that make as much information public as possible, especially when it can be done easily and cheaply electronically.
Without government transparency laws, it would be very difficult for reporters to do their jobs. And thanks to tools like FOIA, regular citizens can help hold public officials accountable.
Advice for the Legislative majority
Editor's Note: This piece was originally published in The Detroit News on March 9, 2017.
Michigan Republicans own a unique moment in this state’s political history. If you are a member of the GOP, your party controls the White House, Congress, the governor’s office and the state legislature. The last time this occurred? The Hoover administration. Given this opportunity, policymakers should pursue their agenda with gusto.
Gov. Rick Snyder will finish his second term with the luxury of single-party control in the Legislature for his entire administration. During that time, he and lawmakers contributed to an impressive economic recovery, pulling the state out of a 10-year nosedive.
But the last two years have tested Republicans’ ability to achieve significant reforms. The Flint water crisis disrupted the governor’s plans and it rightfully requires his attention. In the Legislature, internecine fights over Detroit education, infrastructure spending and energy reform have at times stymied a free-market agenda.
Looking ahead to the next two years, I humbly offer this advice:
■Govern boldly. The governing party must create the future and not merely react to it. Playing not to lose is a risky proposition — just ask the Atlanta Falcons, who coughed up a 28-3 lead in the Super Bowl. When a party governs only to not lose a majority, it results in milquetoast achievements. If Donald Trump’s election teaches us anything, it is that one who discards political norms may give himself the best chance to win.
Governing with boldness may require lawmakers to defy political convention, as House Speaker Tom Leonard showed recently. The new speaker put a modest tax cut up for a vote, knowing he lacked the necessary votes within his own caucus. Political commentators labeled the move divisive, but time may reveal that voters appreciated the clarity the vote gave. Let’s hope the House reconsiders a tax cut for Michigan families.
■Govern for all people. Too much legislation carves out special privileges that benefit small groups of people. A more appropriate approach is to serve people broadly. Policymakers are debating bills that would give well-connected developers a generous slice of tax revenue if they develop certain blighted properties. This benefit to a few will be paid for by many. Not only are corporate giveaways unfair, they rarely work. Subsidies like this represent the triumph of hope over experience, to paraphrase Samuel Johnson.
One method of governing for all people is to build alliances with those who are troubled by the current political environment. Go to them; listen to their concerns. Many policymakers, to their credit, are doing so this year in their town hall meetings with constituents. If you go to people with an open mind, you may find priorities you can advance together. Another modest suggestion to keep politicians grounded: Serve people in a hands-on way. Hard work has a way of centering us; find opportunities to break a sweat and get dirty while serving others.
■Embrace constitutional exegesis. It is never out of season to explain what makes America great. The rule of law, opportunity, separation of powers, liberty and responsibility — each person involved in the political process should pass these values on to the next generation. An example: The right to free speech is enshrined in the First Amendment. But the right to speak is best exercised with courtesy and engagement. It does not mean that a person can expect to be free from being offended or from hearing divergent views. Are we modeling this?
■Govern for the long term. One of the consequences of partisan politics is that elected officials focus only on the next election. Laws are enacted for the immediate benefit — a press release, a headline — but not with the next decade in mind. Tackling the state’s unfunded pension liabilities would be a good start for lawmakers. Such a priority won’t earn much short-term praise but could divert the state’s course away from a pending fiscal calamity.
Govern boldly. Do so for the benefit of all people. Explain our constitutional values. And be mindful of the long-term effects of policy.
The next two years provide a perishable opportunity. What will you do with it?
Online charters already perform OK for much less money
In his 2017-18 budget, Gov. Rick Snyder has proposed reducing funding for certain types of public schools: cyber schools, which are charter schools that provide students with full-time online instruction.
Currently, all public charter schools receive the same minimum foundation allowance as most traditional districts: $7,511 per student. While all other districts and charters funded at that minimum level would receive a $100 increase in their foundation allowance, cyber school financing would drop to $6,089 per student, a 19 percent hit.
Rep. Tim Kelly, who chairs the education reform and school aid committees in the House, criticized the governor’s proposal as unfair in the Detroit News: “We fund students, not schools. So Billy and Sally shouldn’t be dinged by the choice they make for what school they go to. Why is Billy worth less than Sally simply because of the choice of schools?”
The governor’s proposed budget justifies the cut by claiming that cyber schools have “minimal facilities costs when compared to their brick-and-mortar counterparts.” That argument really doesn’t work though, because brick-and-mortar school districts pay for their facilities with local property tax revenue, not state funds. Cyber schools (and all other charter schools, for that matter) cannot levy taxes on local property owners to pay for their facilities like districts can. So, even if cyber schools’ costs for facilities are less, they, unlike brick-and-mortar districts, have to pay for them out of their state revenue — the same revenue Snyder plans to cut.
The estimated cyber school spending reduction of $16 million is not the governor’s only pushback on a nontraditional educational choice. He also wants to significantly reduce funding to districts that offer “shared time” services for private school students or homeschool partnership programs — from $115 million this year to $60 million in 2018.
These cuts would be more than offset elsewhere in Snyder’s K-12 budget plan. The governor proposes an additional $150 million for current and newly designated at-risk students, along with an extra $22 million to boost funding for high schools.
While the relatively new mode of virtual learning may not prove a good fit for most students, some families have found online schooling to be a lifesaver. A 2012 state law raised the cap on cyber schools, but Michigan still limits the number of schools to 15 and the number of students served to 2 percent of all public school students statewide. Currently, 13 charter cyber schools operate in Michigan, four of which opened their doors in 2016.
The Detroit News’ Jonathan Oosting reported that cyber schools “are consistently underperforming their peers.” Yet on the Mackinac Center’s recent Public High School Context and Performance Report Card, which factors in student poverty rates when grading schools, five of the seven cyber schools serving high schoolers performed on level with most of their peers. One performed slightly below average but another, Michigan Connections Academy, did better than 90 percent of public high schools in the state and earned an A.
Cyber schools get these results with less money already. The foundation allowance provides a minimum guarantee, but schools have access to other sources of local, state and federal funding. In 2015-16 cyber schools overall spent $9,039 per student — less than 99 percent of conventional school districts and even less than most other charter schools. The state’s per pupil spending averaged $12,243 last year.
Critics say that these online education programs can absorb the cuts because they don’t have to fund student transportation, food service and certain infrastructure costs. Yet even when you factor those costs out, cyber schools still spend over $2,000 less per pupil. Meanwhile, 68 percent of cyber school operational spending paid for teachers and other instructional costs, compared to 58 percent for all schools. So, even if cyber schools spend less on brick-and-mortar costs, they appear to use those savings to fund teaching and learning. Isn’t that what taxpayers want?
If there’s evidence to support the governor’s view that the cyber-school funding disparity should be widened even further, he should bring it forward. Because Kelly is right about the current plan: It just treats students differently based on the choices they have made.
March 10, 2017 MichiganVotes weekly roll call report
Senate Bill 129, Regulate small copper mines different than big ones: Passed 24 to 11 in the Senate
To establish a separate and more streamlined regulatory regime over small ("native") copper mining operations.
Senate Bill 19, Cut off parole absconders from welfare: Passed 101 to 6 in the House
To cut off cash welfare or food stamp benefits given to an individual who absconds from parole. This and the next few votes are part of a large Senate probation and parole reform package the House approved this week (except for one bill that would give subsidies to employers who hire ex-convicts).
Senate Bill 13, Cap penalties for technical parole violations: Passed 99 to 8 in the House
To cap at 30 days in jail the penalty for probationers who commit technical probation violations, except for multiple offenses.
Senate Bill 12, Facilitate release of medically frail prisoners: Passed 107 to 0 in the House
To authorize expedited prisoner commutation hearings and procedures if this is requested by the governor for a particular prisoner, and the request is based in part on the individual’s medical condition.
Senate Bill 22, Create new rules for housing young prisoners: Passed 107 to 0 in the House
To require the Department of Corrections to develop rehabilitation plans for inmates aged 18 to 22, and provide programming designed for that age group. This is a change from the Senate-passed version of the bill, which required young prisoners to be housed together and separated from older prisoners. Prison officials criticized this, warning of “gladiator schools.”
House Bill 4208, Ban expelled legislator from running in replacement election: Passed 72 to 36 in the House
To revise a procedural detail related to when legislators are expelled or resign. The bill would require a resignation letter or expulsion resolution to explicitly cover the full balance of the term (rather than be temporary).
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.
After four long years of debate, change has finally arrived
It seemed everyone was ready to tackle criminal justice reforms after the Council of State Governments released its study of Michigan in 2013.
The Legislature, Gov. Rick Snyder and the Supreme Court issued a joint invitation to the CSG to observe Michigan’s criminal justice system, and the House of Representatives introduced several proposals the following year based on the council’s findings.
But disagreement over presumptive parole — which would automatically put some prisoners out on parole after serving their minimum sentence — held up the reform process. The 2014 legislative session ended before any criminal justice bills passed.
House Republicans tried again in 2015, to no avail. The opposition to presumptive parole remained strong. But the heat had been turned up on the debate, and Snyder issued a statement calling for lawmakers to pass reforms within the next six months.
Last year saw more reforms introduced, this time from both legislative chambers. The Senate proposed 21 wide-ranging reforms, while the House passed four more targeted ones. Although there was bipartisan support for all of the bills, only one — the repeal of the “successor judge veto” — ended up making it into law.
Senate Republicans wasted no time getting their proposals back on the table in early 2017, and, under the leadership of Speaker Tom Leonard, the House has finally approved the Senate’s sweeping reforms.
The final bills underwent a few changes in the House, but the Senate has concurred with the amendments and the whole package is now on its way to Snyder for his signature.
This is a big moment. The bills include many commonsense measures to enhance public safety and save taxpayer dollars at the same time. They include directing the flow of state funds to probation and parole programs that rely on proven best practices, cutting off welfare benefits to people who abscond from parole and creating special rehabilitative plans for younger inmates. They also include requiring the state to collect data about the corrections system and establishing special problem-solving courts that will help parolees re-enter society.
If all goes well, Michigan may be on the path to becoming a national model for modern and effective administration of criminal justice.
Massive expansion after sensible regulations passed
We’ve written a lot about ridesharing over the last year, explaining why services that use smartphone apps to link people who have cars with people who need rides are good for Michigan.
Two companies stand out in the ridesharing business in Michigan: Uber and Lyft. When we started talking to drivers a year ago, Uber was operating in six cities (metro Detroit, Ann Arbor, Lansing, Flint, Grand Rapids and Kalamazoo). Lyft was operating in only two (metro Detroit and Ann Arbor), although it expanded in summer 2016 to include the Lansing and Grand Rapids areas.
But these companies, and more importantly, the people who drove for them, were operating in a legal gray area. Michigan law didn’t have a place to put ridesharing, and some drivers received tickets for lacking a license they didn’t explicitly need. The companies were slow to expand, or not expanding at all, because of the uncertainty surrounding regulations.
Ridesharing provides jobs and a safe ride home. It correlates with safer roads and less crime. Allowing these companies to continue operating in a gray area jeopardized their future expansion and innovation in Michigan. Some drivers warned that passing the wrong rules and regulations for ridesharing could force the companies to pull out of the state completely.
Fortunately, late last year the Legislature created a sensible, statewide framework for ridesharing companies, and streamlined taxis and limousine regulations, too. Less than three months later, that move is already paying off. Over the last few weeks, Lyft has added services in six new cities: Flint, Jackson, Kalamazoo, Midland, Mount Pleasant and Saginaw. Uber has followed suit, announcing launches in Jackson, Midland, Bay City and Saginaw.
Thousands of additional Michiganders can now take advantage of cheap, easy transportation through ridesharing as a result of last year’s changes. Hopefully, even more will have access soon as the companies expand into new markets. It’s another example of the positive impact sensible regulations can have on a state.