What Senate Bill 571 actually does
The Michigan Legislature passed and Gov. Snyder signed Senate Bill 571, which prohibits schools and local governments from using taxpayer dollars to put out information about ballot proposals 60 days before an election. In the past, these entities have used public money to advocate for higher taxes.
Here is the exact language of the controversial part of the bill:
Except for an election official in the performance of his or her duties under the Michigan election law … a public body, or a person acting for a public body, shall not, during the period 60 days before an election in which a local ballot question appears on a ballot, use public funds or resources for a communication by means of radio, television, mass mailing, or prerecorded telephone message if that communication references a local ballot question and is targeted to the relevant electorate where the local ballot question appears on the ballot.
Local government and school district leaders as well as the groups that represent many of them are outraged. Public entities say they inform voters with neutral language that is needed to educate people before they vote.
But local governments and schools go well beyond that. There are many examples of government units using taxpayer funds to advocate for more money.
Based on their main arguments, the opponents of the new law don’t seem to grasp the problem.
Robert Showers, a county commissioner and board member of the Michigan Association of Counties, wrote that it “silences me and my six colleagues on the Clinton County Board of Commissioners.” He added:
Across Michigan, there have been hundreds upon hundreds of local ballot measures since 2012. And, yes, complaints about improper advocacy were filed in some cases. After review by the state, though, the issues involving local ballot questions represent about ½ of 1 percent of all such elections since 2012. And, remember, these were caught by the law before special interests started urging legislators to pass bills they didn’t have a chance to read. The facts are clear: We local officials take seriously our responsibility to not use public resources for advocacy on ballot measures.
MIRS News notes a similar view from another group which advocates for local governments: “Chris Hackbarth from the Michigan Municipal League noted that in the last three years, the Secretary of State has only found five instances where a local government crossed the line into advocating for a local ballot question using taxpayer money.”
The problem with that analysis is that the only real limit to date on local governments is that they can’t specifically say “vote yes” for a proposal. But they have been allowed to advocate by: asking everyone to “pitch in,” “ask for your support,” “fund our future,” and “ask voters to renew.” They have been able to say a tax increase “can mean the difference between life and death,” ignore $260 million of tax increases, claim a tax increase will “boost Michigan’s employment rate and the economy,” “secure a better future” and more.
The Secretary of State is in charge of policing the campaign-related activities of local governments and MIRS News notes that, “Elections Director Chris Thomas [said the] new bill deals with what he calls ‘electioneering,’ which doesn't overtly ask for support of opposition, but leaves the reader or viewer with no other interpretation than one side of an issue. Thomas called this the ‘functional equivalent’ of expressed advocacy, which currently is not in his purview.”
When signing the bill, Gov. Snyder asked for clarification that elected officials could respond to questions about ballot proposals and give information as a function of their job. A new proposed bill, House Bill 5219, ensures that and allows local governments to send out the ballot language and the election date of proposals.
That seems like a good change to the new law, ensuring that informational language as neutral as possible can be sent out while limiting local governments from advocating for tax increases. And, of course, anyone who wants to advocate for or against a tax increase is able to do so – just without taxpayer dollars.
Reitz discusses Flint water crisis on Michigan Radio
Mackinac Center Executive Vice President Michael Reitz was featured in Monday’s edition of Stateside on Michigan Radio to discuss the need for more transparency in government in light of what is happening in Flint.
“The justification for FOIA unfortunately is very clear and very apparent in situations like the one we have now with the Flint water crisis where decisions were made that will affect people’s lives in horrific ways for years and years to come,” Reitz told host Cynthia Canty. “The people of Flint and the people of Michigan justifiably want to know who made these decisions and how were they made and why did we get it wrong.”
Reitz joined Melanie McElroy, executive director of Common Cause Michigan, who agreed that the governor’s office should be subject to the Freedom of Information Act. Michigan and Massachusetts are the only two states where the governor’s office and state legislature are exempt from this public records transparency law. Reitz explained it is time to change this standard:
We think generally it is a good idea to have the governor’s office treated the same way as other branches of government or other agencies under the Freedom of Information law. And really it comes down to the statement of public policy that FOIA includes in the statute. It says that, ‘All persons are entitled to full and complete information regarding the affairs of government and the official acts of those that represent them as public officials.’ If that’s true of a school board member or a local city council member, certainly it’s true of a person in the governor’s office or some other state agency.
Read more about the interview, and listen to the segment in its entirety, at Michigan Radio.
West Virginia could become 26th right-to-work state
With West Virginia poised to become the nation's 26th right-to-work state, the Mackinac Center’s Director of Labor Policy F. Vincent Vernuccio and Michigan Capitol Confidential reporter Jason Hart co-authored an op-ed in the Charleston Gazette-Mail. The piece explains worker freedom and details how it has improved quality of life in other states:
Right-to-work has helped other states. They have higher wage growth, more job growth, higher population growth and historically lower unemployment. Almost all right-to-work states have lower workplace injury rates than West Virginia, too.
Right-to-work can even strengthen unions. How is that? It makes them more responsive to members because they now cannot take forced dues for granted. Instead, they need to earn the voluntary support of their members by becoming better.
Indiana is one example of this dynamic. In 2014 Indiana tied for the state with the most new union members when it added 50,000 new dues-paying members.
The West Virginia AFL-CIO says right-to-work will mean pay cuts for workers; union officials in Indiana and Michigan said the same, but average wages increased in both states after they implemented right-to-work.
West Virginia could soon join the ranks of these states and others that allow workers the freedom to choose whether or not they will join a union.
Read the op-ed in its entirety at the Charleston Gazette-Mail.
Additionally, Vernuccio joined "Decision Makers" on WOWK out of Charleston to discuss West Virginia's prospects as a right-to-work state:WOWK 13 Charleston, Huntington WV News, Weather, Sports
It harms current employees and retirees as well
Scarce tax dollars are needed to fill the gap between what has been promised workers in the school pension fund and what the state has saved to make good on those promises. Yet some officials shrug off the underfunding as the cost of doing business.
The cost of underfunding pensions to school budgets is massive: $6 billion to $7.8 billion would have been saved if employees had been offered defined-contribution benefits over the past decade — enough to pay for every public school teacher salary for a year.
Using pension officials’ own assumptions and projections, the state now owes current and future school retirees $26.5 billion more than it has saved. This year alone, catching up on that debt will cost schools an amount equal to 22.3 percent of their entire payroll. When the cost of pensions earned by employees in the current year is added, the total hit to school budgets this year is 25.95 percent of payroll.
When these same pension officials lobby against closing the defined-benefit system to new employees, they ignore the underfunding. But the system has carried more liabilities than assets in all but one of the past thirty years.
Over the past decade the size of the unfunded liability has more than quadrupled, from $6.1 billion in 2006 to the current $26.5 billion. So when legislators compare the costs between the current system and a defined-contribution system, they need to include an extra expense in the former for paying down its unfunded liabilities.
Imagine instead that the state had been paying 5 percent of payroll into employee defined-contribution plans. Doing so would have saved schools and taxpayers $7.8 billion over the past decade. A more generous plan with 7 percent contributions would have saved $6 billion.
The state has an obligation to deliver the pension benefits that were already earned by current employees and retirees. So it is not possible to flip a switch and start realizing these kind of savings right away.
It is possible to adopt this reform going forward, and the Legislature should do so immediately. This will contain future damage and put the state on a path to gradually eliminating legacy costs.
Continuing the current perpetually underfunded system is unfair to retirees who must worry about their pensions, and to current employees whose compensation is limited by the state’s need to service unfunded liabilities. And of course it is unfair to taxpayers, who are ultimately responsible for government pensions.
Free event in Lansing next month
In 2015, four states totally deregulated African-style hair braiders. The Institute for Justice, a public interest law firm, notes that this style of braiding uses no chemicals and is extremely safe. But according to a 2014 IJ report, more than 20 states still require braiders to get thousands of hours of training and purchase a state license. Fortunately, Michigan does not require braiders to take extra classes or pay fees, and as such, is one of 10 states to which IJ gives an A rating.
But the Great Lakes State is still fairly heavily regulated when it comes to occupational licensing. If this issue interests you, the Mackinac Center will be hosting a free event (with lunch included) in Lansing on Wed., Feb. 17, entitled, “Let Them Work: Solutions for Michigan’s Overbearing Occupational Licensing Laws.” Here’s the synopsis:
Occupational licensing is now one of the largest issues in labor economics, perhaps even surpassing unionization and the minimum wage. On a national basis, 25 percent of all Americans need the government’s permission and specific credentials before they can work. That is more than twice as many people who are members of unions — 11 percent and declining — and 25 times the number who earn the minimum wage.
The problem of licensing is becoming increasingly apparent and it is being addressed in a bipartisan fashion. The U.S. Supreme Court and President Obama’s Council of Economic Advisers issued a landmark opinion in February 2015 and a 77-page study in July 2015, respectively. Both questioned the legality and wisdom of occupational licensure laws.
Lee McGrath is an expert in this field, having litigated and advocated for licensing reform across the nation. His firm, the Institute for Justice, has been a national leader in pushing to reduce barriers to earning an honest living since its founding in 1991. He will discuss the problems with current licensing laws, explain recent court cases on the issue and show how Michigan can lead the way in reforming these harmful regulations.
For more information and to sign up, click here.
Flint water money, driving while stoned, more
Senate Bill 434, Authorize highway drug testing pilot program: Passed 28 to 10 in the Senate
To authorize a one year pilot program in five counties for roadside drug testing, to determine whether drivers are operating vehicles while under the influence of a controlled substance (marijuana in particular) by means of “oral fluid analysis” (saliva test). After the first year the State Police could continue the pilot programs in other counties.
Senate Bill 233, Expand new car purchase tax break: Passed 37 to 1 in the Senate
To revise a 2013 law that exempts from sales tax the value of a trade-in when buying a motor vehicle, boat or RV, so it also applies to purchases made from dealers in other states. Under the 2013 law the tax exemption is supposed to be phased in over 24 years.
House Bill 4535, Exempt police from pistol purchase red tape: Passed 32 to 3 in the Senate
To exempt law enforcement officers from the law that prohibits purchasing a pistol from an individual unless a person gets a "purchase permit" from local police. A 2012 law repealed this requirement for pistols bought by civilians from a federally licensed firearms dealer.
House Bill 4187, Authorize jail for vandalizing road signs, lights, etc.: Passed 88 to 18 in the House
To authorize criminal penalties of up to 93 days in jail and a $500 fine for vandalizing or removing a traffic control device, light post, sign, etc. on a road or highway. For a third or subsequent offense the penalty would be one year in prison and a $10,000 fine.
House Bill 5220, Appropriate money for Flint water contamination response: Passed 106 to 0 in the House
To appropriate $28 million to pay for response activities related to the contamination of the Flint water supply, of which $2.8 million is federal money.
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.
State gets no benefit from protectionist rationing scheme
New research from the Virginia-based Mercatus Center indicates that schemes to ration health care services through certificate-of-need requirements — such as those imposed in Michigan — increase the difficulty of getting access to health care services while doing nothing to reduce their costs.
A CON law restricts the ability of health care providers to expand or open new facilities, or to acquire powerful diagnostic tools. Providers must first get permission from a government commission. Some members of that commission may represent the incumbent facilities against which the new entrant would like to compete.
CON laws supposedly help keep medical costs low by avoiding overinvestment in facilities and expensive technologies. A second rationale offered in their defense is that they help the poor by requiring providers to provide charity care as a condition of obtaining the required approval.
Among other restrictions, Michigan’s law requires existing or would-be providers to get permission for new or even replacement imaging equipment used to take CT, MRI, or PET images. The multistep CON process requires applicants file a letter of intent, an application, plus additional requested information and then wait 45 to 150 days, depending on the type of review. They must also pay fees that range from $3,000 to $15,000, based on the cost of the project.
The Mercatus research found that CON laws negatively affect independent providers of imaging services. These businesses may be kept out of the imaging market by having their application denied, or because they assume this will happen and don’t bother to apply in the first place.
Hospitals, meanwhile, have several advantages over their would-be competitors in obtaining the required certificates. Not surprisingly, when CON laws exist, hospitals dominate the market for imaging services. They are more politically popular than independent providers and can absorb application costs more easily, making it possible for them to acquire enough equipment to perform as many scans as hospitals in states without CON laws. Hospital associations also have the financial resources to mount lengthy legal challenges to keep anti-competitive regulation in place.
CON laws play no positive role in public health or health care provider quality. They also don’t help the poor, because while providers who get the required permissions are supposed to increase charity care, the logic of cross-subsidization is ineffective at making them do so. The law is effective at one thing, though, and that is shrinking the pool of services available to all Michigan residents.
Congress repealed federal CON laws in 1987, after which many states rolled back their own versions. The Federal Trade Commission has since issued official statements calling for the repeal of all state CON laws. The commission says that they prevent efficiently functioning health care markets and can harm consumers by posing barriers to expanding the supply of providers. As a result, they put limits on consumer choice and inhibit innovation.
Michigan’s Legislature should repeal the CON scheme altogether. If the Mercatus report does not lead to its abolition, at the least it shows that the scheme does not live up to its own logic.
In a state that would like to see its health care services sector become a magnet for consumers in other states and nations, it makes much more sense to allow the forces of supply and demand to optimize the availability of health care tools, services and innovations for all of us.
Occupational licensure mandates, African-American needs, more
Senate Bill 90, Create African-American Affairs Commission: Passed 34 to 2 in the Senate
To create an Office of African-American Affairs in the state Department of Civil Rights, and a government African-American Affairs Commission consisting of 15 political appointees who have "a particular interest or expertise in African-American concerns," with the mission of developing “a unified policy and plan of action to serve the needs of African-Americans in this state.”
House Bill 4459, Allow embedding emergency contact info in drivers license: Passed 37 to 0 in the Senate
To require the Secretary of State to embed machine-readable emergency contact information in digitized drivers licenses if a person requests this. Access to the embedded information would be limited to law enforcement agencies. House Bill 4460 does the same for state ID cards.
House Bill 4813, Revise electrician licensure mandate detail: Passed 58 to 49 in the House
To revise details of a law that requires a person to accumulate 8,000 hours as an apprentice before he or she can get a state license to independently earn a living as an electrician. The bill would change a current restriction that limits a licensed electrician to having just one apprentice, by increasing this to three apprentices.
House Bill 4552, Impose additional training mandate on school counselors: Passed 78 to 29 in the House
To mandate that school counselors must accumulate 50 hours of training on career and college admissions counseling, which would be provided by schools in lieu of other topics covered by existing "professional development" programs.
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.
And without more taxpayer money
You might get the impression that no one in Michigan values higher education, given the way university funding gets portrayed. A new report from a group called the Young Invincibles gives the state an F for the size of its subsidies to public universities. But the numbers tell a different story.
State and local governments spend more on higher education in Michigan than all but three other services according to the U.S. Census Bureau, trailing only K-12 education and public welfare. But higher education is not funded exclusively with tax dollars — it is also funded with tuition, fees, grants and other support.
Revenues have been growing over time even without additional money from state taxpayers. Total general revenues at state universities increased from $4.18 billion to $5.95 billion from 2006 to 2014, according to state reports. This is a 42 percent increase. Indeed, this is faster growth than seen in the state budget.
As state support dropped from $1.7 billion to $1.3 billion over the period — a 23 percent decrease — revenues from tuition and fees increased from $2.4 billion to $4.2 billion — a 77 percent increase.
Students get something for the extra money that they — or their parents — have provided universities. State higher education institutions are spending more on instruction and support activities. And universities are spending more on financial aid to their own students. This assistance increased from $336 million to $693 million from 2006 to 2014.
Financial aid is part of a strategy many universities use to get more revenue from the people that can afford its tuition while helping others with fewer means to attend the school.
The universities are also turning this additional money into more degrees. Overall, these state institutions awarded 15 percent more bachelor degrees and 10 percent more of other kinds of degrees and certification. (The student population only increased by 3.8 percent over the period.)
In this environment, what do taxpayers get in return for their spending? It doesn’t seem to be much. Michigan public universities are spending more money and pumping out more college graduates without taxpayers putting more money into the system.
As the budget season for Michigan lawmakers begins, residents should question the actual value of the $1.4 billion in state tax money given to these universities in 2015, considering that university revenues and expenditures seem to grow just fine without increased taxpayers support.
Michigan students slow to improve, despite increased funding
Some Michigan officials are preparing to tell us how many more dollars ought to be poured into the state’s K-12 school system. They expect to have an official report in hand soon to make their case, but other recently released numbers raise some tough questions.
On last week’s edition of “Off the Record,” Michigan Association of School Administrators Executive Director Chris Wigent confidently declared that his group is “very, very optimistic” about forthcoming results from the state’s adequacy study.
Wigent prefaced his optimistic assertion by noting that Michigan’s “current funding system is just broken.” There may be flaws in the way the state allocates funds to schools. But the real challenge comes in finding genuine solutions that best serve students while honoring the investment taxpayers are compelled to make.
The typical game plan of commissioning adequacy studies, as demonstrated in numerous other states, is to lay the foundation for new legislation or a court order to significantly increase K-12 funding.
Michigan’s study was commissioned as part of a December 2014 legislative deal to place a road funding proposal before voters. According to Martin Ackley, spokesman for the Michigan Department of Education, the Michigan Department of Technology, Management and Budget was in charge of the process of getting the bids for the study, reviewing and scoring them, and awarding the contract. The State Administrative Board approved the final $399,000 contract with the Denver-based firm Augenblick, Palaich & Associates to perform the analysis.
APA is an experienced hand at this sort of work, as they say, seeking to determine “what resources are necessary to ensure students, schools, and districts can meet” state academic standards. One of APA’s four touted approaches to develop its findings is the professional judgment model, in which investigators ask panels of education leaders how much money they need to meet student proficiency goals.
A careful look at a new national report places that kind of thinking on very shaky ground.
Every year, the publication Education Week releases its Quality Counts survey, which grades states on a host of funding and achievement measures. This year’s survey gauged how states fared during the 12 years under the strict accountability guidelines of the federal No Child Left Behind education regime. Education Week's analysts used the highly regarded NAEP test, nicknamed the nation’s report card, to determine how many students were proficient in reading and math in 2015 compared with 2003.
Over this 12-year period, only one state actually lost ground on the battery of fourth-grade and eighth-grade tests: Michigan. Overall, no other state actually experienced the misfortune of a lowering of the proficiency rate.
To accept the logic behind the state’s pending adequacy study, one would have to assume that cuts to Michigan education funding have caused the decline.
The fiscal data undermine that story, however. While final spending amounts haven’t been reported for the 2014-15 school year, Quality Counts has tallied finances through 2012-13. Michigan’s K-12 spending outpaced inflation by 7 percent over the 10-year period (up to $12,000 per pupil), an overall increase that includes the potent effects of a deep recession.
Simply put, as Michigan’s K-12 enrollment has fallen, more dollars have been spent on each remaining student. Meanwhile, measurable results are flat, or floundering.
Some may wish to write it off as a Detroit problem, or a poverty problem. But a deeper look at the NAEP tests offer no such consolation. Michigan’s middle- and upper-class students showed less progress than their low-income peers, especially in the area of reading, from 2003 to 2015.
During the last dozen years, most of the nation has advanced — albeit modestly — toward meeting important academic goals. Yet Michigan kids from middle- and upper-income families most clearly buck the trend. That’s one way to close the stubborn achievement gap between rich and poor. But it’s not a way to brighten the futures for more students.
When the state releases its adequacy study, some may only ask education officials if they agree with how much more should be offered from the state’s checkbook.
But what’s really needed is a serious look at the track record of turning resources into results in Michigan schools, and evidence for how to spend the money more wisely.
Editor's Note: This piece originally said that the state Board of Education approved the contract. The board was not involved in the deal.