The MC: The Mackinac Center Blog

The Detroit News Points to Mackinac Center Research

Fact-checking right-to-work claims

Opponents of right-to-work policies often point to flawed research to make claims of decreased wages and employment in states with forced unionization.

In a Sept. 15 Editor's Note in The Detroit News, Ingrid Jacques pointed to a critique of some of those claims, backing up national findings with research from the Mackinac Center:

Michigan became a right-to-work state in 2012, and since then the state’s unemployment rate has dropped.

The Mackinac Center attributes that reduction to the fact companies are now considering the state for new sites, where they likely would have overlooked Michigan in the past. As the overall economy improves, so should wages.

The full Editor's Note is available at The Detroit News.

The “Economic Freedom of the World Index” published by the Fraser Institute of Canada measures the degree to which the world’s 157 nations and territories permit voluntary, peaceful economic exchanges between their own citizens and with people in other countries. The most recent index has just been released, and based on data from 2013, it ranks the United States 16th in economic freedom.

Given this country’s history and traditions, America should be far and away No. 1; that fact that it does not hold the top slot is yet more evidence of how governance has gone off track in this country in recent years.

The index is based on five major categories of data: the size of the government; the strength of the legal system, including property rights;  the soundness of the local currency; the freedom to trade with other nations; and economic regulations. Within these categories are more than 40 variables, such as “government consumption as a share of total consumption” (in the “size of government” category) and “inflation: most current year” (in the “sound money” category). Each variable gets a score. All the scores within a category are converted into an average score for the category, and the categories are averaged together to give a country’s overall score. The highest possible score is 10.

The overall score for the U.S. is 7.73, down 0.9 points since 2000. This decline may seem small, but the index’s authors observe that it is three times the average decline among the top-20 nations that comprise the Organization for Economic Cooperation and Development, the largest and most diversified economies in the world. More important for real people, our decline is reflected in the real-world consequence of slower economic growth, which means less opportunity for all Americans.

America’s declining economic liberty goes against a worldwide trend of growing freedom. In 1980 the average freedom index score for nations appearing in the index was 5.31. As of 2013 the world average stands at 6.86. According to the authors, the U.S. was ranked first among OECD nations from 1970 through 2000 (and in about third place if Hong Kong and Singapore were added to that list).

Since then our decline has been precipitous. It also portends a slower economic growth rate than Americans have been accustomed to, as much as half of the three percent annual growth we once enjoyed.

Some of the 15 nations that outperformed the U.S. in the current index may surprise you. They include, ranked from highest to lowest: Hong Kong, Singapore, New Zealand, Switzerland, United Arab Emirates, Mauritius, Jordan, Ireland, Canada, United Kingdom, Australia, Georgia, Chile, Qatar and Taiwan.

Good for them, but honestly: Georgia, Jordan, UAE and Qatar? How low the mighty have fallen to be surpassed by such recently benighted polities.

For example, just 25 years ago Georgia was the “Georgian Soviet Socialist Republic,” its people chained by the dead hand of communist central planning, coercion and corruption. On a more hopeful note, if even Georgia can throw off its chains, then surely the U.S. can unwind the damage done by 15-plus years of bad federal policies.

This is a vital task, because economic freedom correlates with so many of the things people value, not the least of which is material well-being. Per capita personal income for countries in the bottom 25 percent of the index averages less than $7,000, while average annual incomes in the highest quartile all exceed $38,600. Those who imagine this to be just coincidence might consider investing their retirement nest eggs in Venezuela, Republic of Congo or Libya, the three least-free nations economically.

The Fraser Institute also publishes economic freedom indexes for the states and provinces of Canada, Mexico and the U.S., with the 2015 edition coming out later this year. In last year’s index, using data through 2012, Michigan was a mediocre 37th among the 50 states, up from a dismal 45th place in 2009. It will be interesting to see how the Great Lake State fares in rankings assembled after its right-to-work law went into effect in 2013.

Empirical evidence shows that economic liberty and human well-being are highly correlated. If the world’s policymakers were to govern on this basis, world poverty would be reduced and the untold human tragedies associated with subsistence-level existence would be that much fewer.

Midland Daily News Features Mackinac Center Partnerships

Joining organizations across the spectrum

The Mackinac Center has partnered with many likely and less-likely organizations in its history, from the ACLU, to the Sierra Club, to other free market think tanks.

On Sunday, Sept. 13, the Midland Daily News published an article describing some of these efforts, specifically the relationship with the ACLU — an association that has recently brought attention to overcriminalization and civil asset forfeiture reform.

Mackinac Center Executive Vice President Michael Reitz was quoted for the article:

“Casual observers of the public policy process may assume that all policy debates occur along sharply divided partisan lines,” Michael Reitz, executive vice president of the Mackinac Center for Public Policy, said. “That isn’t the case. When the Mackinac Center decides to study an issue, we always assess who else is engaged. This often allows us to forge partnerships with organizations that hold fundamentally different views on the role of government or specific policy issues.”

Reitz noted that policy change is most effectively developed when lawmakers consider a wide range of perspectives.

The full article is available at the Midland Daily News website.

Courser's and Gamrat's 'Orphan Bills'

Bills abandoned by the two former legislators

Following a tawdry marital infidelity and cover-up scandal that has dominated state Capitol headlines since early August, freshman state Rep. Cindy Gamrat (R-Plainwell) was expelled from the House of Representatives on Sept. 11, 2015.  Rep. Todd Courser (R-Lapeer) stayed “one step ahead of the sheriff” by resigning moments before a House vote that would have expelled him too (roll call vote here, text of expulsion resolution here).

When a legislator is expelled, the bills he or she introduced in that session can still be taken up and passed by the legislature. For reputational and human-nature reasons this is unlikely, however. Specifically, other politicians are hesitant to associate their names with a disgraced former member by championing one of his or her bills, and committee chairs are unlikely to take up and advance the bills for the same reason.

Therefore, legislation introduced by Courser and Gamrat have become orphan bills, or perhaps zombie bills — not dead but not likely to show any signs of life, either. This may be the most substantive outcome of the forced departure of the two legislators.

Below are the newly orphaned measures, listed with their taglines. Click on a bill to see its concise MichiganVotes description. You can also review Courser's and Gamrat’s complete voting record here and here, respectively.

12 Bills Introduced by Rep. Todd Courser (R)

21 Bills Introduced by Rep. Cindy Gamrat (R)

September 11, 2015 MichiganVotes Weekly Roll Call

Sex! Scandal! Expulsion! And substantive issues too

Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit and download VoteSpotter today!

House Resolution 141, Expel Reps. Gamrat and Courser: Passed 91 to 11 in the House

To expel freshmen Representatives Todd Courser and Cindy Gamrat from the House for using government personnel and resources to cover up an extramarital affair, and for other irregularities in the operation of their offices. Courser resigned moments before the vote, so the final version only expels Gamrat.

Who voted “Yes,” and who voted “No”

Senate Bill 356, Authorize property tax to cover dissolved school district's debt: Passed 31 to 7 in the Senate

To allow the school districts that absorbed portions of the Buena Vista school district in Saginaw County, which was dissolved in 2012 after becoming fiscally unviable, to levy non-homestead property taxes in the dissolved district's territory to pay off debt the failed district incurred to cover operational expenses. Reportedly the alternative would be for a court to impose a "judgment levy" property tax on residents.

Who voted “Yes,” and who voted “No”

Senate Bill 384, Authorize establishment of welfare agency police force: Passed 27 to 11 in the Senate

To give the Department of Human Services (the state welfare agency) the authority to appoint agents with the same powers as peace (police) officers and limited arrest powers, for the purpose of investigating welfare fraud.

Who voted “Yes,” and who voted “No”

SOURCE:, 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

Vernuccio Quoted on UAW Opt Out in The Detroit News

Michigan autoworkers can soon leave their union

On Sept. 14, the United Auto Workers contracts with Ford, Fiat Chrysler, and General Motors will expire for the first time since right-to-work legislation took effect in Michigan, allowing autoworkers to opt out of union membership for the first time.

F. Vincent Vernuccio, director of labor policy at the Mackinac Center, discussed the expiration with The Detroit News in an article published Sept. 8:

Some organizations have been working to assist autoworkers who want to opt out. The Mackinac Center for Public Policy, a conservative think tank in Michigan, recently launched a website,, that includes an opt-out form and information for UAW members considering it.

“We just want people to be aware of their options,” said F. Vincent Vernuccio, director of labor policy for the Mackinac Center.

The full article is available at The Detroit News website.

September 4, 2015 MichiganVotes Weekly Roll Call

New bills on road debt, child deaths, squatters, gender bending, more

Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit and download VoteSpotter today!

The House and Senate have not cast any votes in recent weeks. Therefore, this report contains several recently introduced bills of interest.

Senate Bill 432: Ban drones near Mackinac Bridge

Introduced by Sen. Tom Casperson (R), to make it a criminal misdemeanor to fly a drone within 1,000 feet of the Mackinac Bridge. Referred to committee, no further action at this time.

Senate Bill 436: Borrow to pay for road repairs

Introduced by Sen. Marty Knollenberg (R), to authorize state borrowing of an unspecified amount to augment the amount of regular gas tax, vehicle registration tax and related tax revenue spent on new road projects. Note: Approximately $200 million from the current annual road budget is needed to repay debt incurred for routine road work in the 1990s and 2000s. Referred to committee, no further action at this time.

House Bill 4635: Extend “commercial rehabilitation” tax break law

Introduced by Rep. Kathy Crawford (R), to extend for another five years a Dec. 31, 2015 sunset on a “commercial rehabilitation act” that authorizes property tax breaks for the developers of commercial redevelopment projects selected by local government officials. Referred to committee, no further action at this time.

House Bill 4643: Establish legal recourse for illegal union picket victims

Introduced by Rep. Gary Glenn (R), to revise a law that makes it illegal to picket a business for purposes of blocking access to individuals doing or seeking work there. The bill would allow an employer to ask for a court injunction to stop the picketing, and a union that disobeyed the injunction could be fined $10,000 per day, and $1,000 for individuals. Referred to committee, no further action at this time.

House Bill 4646: Ban local government contracts to campaign contributors

Introduced by Rep. Jim Townsend (D), to prohibit local governments from awarding contracts worth $25,000 or more to a vendor who made a political contribution of at least $100 in the previous 12-month period to an elected officeholder. Referred to committee, no further action at this time.

House Bill 4672: Ban smoking in car with minor

Introduced by Rep. Sam Singh (D), to ban smoking in a vehicle with a minor present, subject to a $500 fine. Referred to committee, no further action at this time.

House Bill 4673: Prescribe requirements for removing “squatters” from property

Introduced by Rep. LaTanya Garrett (D), to prohibit a property owner from attempting to evict “squatters” from the property unless he or she is accompanied by a law enforcement officer who has been provided with proof that the person entering the premises is the owner. Referred to committee, no further action at this time.

House Bill 4678: Give state flag to deceased legislators' survivors

Introduced by Rep. Fred Durhal, III (D), to create a new law called the "Legislative Funeral Act” that would require the state to give a state flag to the survivor of a current or former legislator who dies. Referred to committee, no further action at this time.

House Bill 4688: Authorize penalties for not reporting child’s death

Introduced by Rep. John Bizon (R), to make it a felony punishable by up to four years in prison to fail to immediately report the death of a child for which a person is responsible, or fail to report that a child is missing within 48 hours. Referred to committee, no further action at this time.

House Bill 4697: Ban no-exception school expulsion policies

Introduced by Rep. Jeff Irwin (D), to prohibit school districts from adopting a policy that requires a student to be expelled for certain violations and does not give school officials discretion in enforcing it, except as required by state law. Referred to committee, no further action at this time.

House Bill 4698: Authorize drivers license, state ID gender change

Introduced by Rep. Brian Banks (D), to require the Secretary of State to change the gender indicated on the drivers license of a person who requests this if the individual has obtained a “sex change” operation, or produces a court order authorizing the change in designation, or other official identification to that effect. Referred to committee, no further action at this time.

SOURCE:, 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

Watch Vernuccio Discuss Labor Reform at Heritage

Panel discussion on right-to-work and wages

On Sept. 1, Mackinac Center Director of Labor Policy F. Vincent Vernuccio joined the Heritage Foundation as a panelist for their event "Do Right-to-Work Laws Really Reduce Wages? Examining the Evidence." He compared and contrasted Michigan and other right-to-work states against without right-to-work policies:

The full video is available at the Heritage Foundation's website.

New Survey Says Texas Schools Behind Contracting Curve

Only 22.8 percent of conventional public school districts contract out

This commentary originally appeared in the Austin American-Statesman on September 1, 2015.

Money that could be spent on classroom supplies and textbooks is being lost to the educational bureaucracy, according to a new survey of Texas school districts.

The new statewide survey of Texas’ 1,025 independent school districts, prepared by the Mackinac Center for Public Policy, a Michigan-based research institute, sought to find out how many school districts — if any — are getting the most bang for their buck by contracting out noninstructional services, like transportation, food, and custodial work. What the survey found is that there’s a almost-universal need for improvement in the current spending structure, with lots of potential upside for classroom kids.

Done right, competitive contracting, whereby government invites competition into the bidding process from qualified service providers, can help the school districts realize cost savings, relieve district leaders of management headaches, and improve service delivery by finding the best providers at the best possible price. This tactic is one that’s already proven effective in other states.

In Michigan, as one example, many of the state’s 542 school districts have come to widely embrace the competitive contracting concept — and have realized some impressive gains as a result.

In 2005, the number of Michigan school districts contracting out for transportation services was a mere 3.8 percent, almost exactly where Texas is today. Today, Michigan’s figure is closer to 27 percent, a 598 percent increase. What’s more, contracting out for custodial and food services has also risen dramatically, growing from 9.4 percent and 28.6 percent of districts in 2005 to 52.2 percent and 42.8 percent today, respectively.

Part of the reason that Michigan school districts have come to rely so heavily on competitive contracting is that it frees up valuable resources for the classroom. It’s something of a win-win for administrators and students.

Competitive contracting has so much potential that Texas school districts, always vocal about the perceived lack of available funding, can no longer afford to ignore it.

The Mackinac Center found that only 153 districts, or 15 percent of those surveyed, contracted out for food services, the highest contracting rate of all three areas. Custodial and transportation contracting topped out at just 9.8 percent and 3.8 percent, respectively.

Statewide, 22.8 percent of all conventional public school districts in Texas contract out for at least one of the three major noninstructional services. Only nine districts, or less than one percent, contracted out for all three noninstructional categories, transportation, food, and custodial services.

Texas school districts’ reluctance to adopt competitive contracting practices means that a whole lot of money is being left on the table. In recent years, the Mackinac Center has found per-pupil savings ranged from $34 for food contracts, $110 for transportation and as high as $191 for a custodial services. If even a fraction of those savings can be realized in Texas, then that’s a whole lot of money that can be better spent providing pencils and paper to kids and incentives to good teachers.

It’s time that Texas school districts learned a thing or two about competitive contracting from Michigan schools.

California Tax Bills Asking for Trouble

Lawmakers raising cigarette excise taxes are well-intentioned but misguided

Legislation permitting counties to increase the excise tax on cigarettes was approved by the California Senate Thursday, Aug. 27. Another bill — introduced the day before — would hike the state excise tax by $2.00 per pack. The state legislature should prevent both bills from passing.

If the local excise tax option is adopted, the law will almost assuredly lead to higher excise tax burdens in some if not most counties. (Counties would need to have to submit an increase to a public vote.) This will increase price differentials between counties (and differentials with other states and nations) and invariably be followed by the lawlessness associated with cigarette tax avoidance and evasion, among other unintended consequences. Local excise taxes will only compound the damage done by a statewide hike. Worse, research shows that the health benefits of excise tax hikes are weak, and perhaps even counterproductive.

Local excise taxes on cigarettes are not a new invention. We see them used prominently in New York City ($1.50) and Chicago ($1.18) and by Cook County ($3.00), Illinois to name a few. Scholarly research on contraband smokes in these jurisdictions — and others — should serve as a warning to the California Legislature.

A 2013 study of cigarette consumers in South Bronx, New York by university scholars found that 76.2 percent of discarded cigarette packs there did not bear tax stamps from both New York state and New York City, suggesting massive local tax evasion.

A 2007 study of cigarette packs discarded around the Chicago area — this before recent excise tax hikes — indicated that many came from other jurisdictions. Indeed, the study’s author notes that “Chicago littered packs were slightly more likely to have an Indiana stamp than a Chicago stamp.”

In 2008 we looked at wholesale cigarette sales on a county-by-county basis in Michigan, Wisconsin and Indiana. With information we received from a major Midwestern wholesaler, we examined changes in purchases by Michigan retailers before and after cigarette excise tax increases in each state.

We found that sales to Michigan retailers increased by 53.2 percent when Indiana raised its excise tax by nearly $1.00 or 79 percent. This change in sales is explained by the fact that Michigan retailers understand customer sensitivity to tax-induced price changes. The incentive for Michigan smokers in border counties to smuggle cigarettes in from Indiana dropped when Indiana raised its taxes.

If SBX2–9 is adopted, many counties may vote for higher taxes and will be giving their local residents an incentive to cross into another county for cheaper cigarettes.

Lost in the debate is the cost of enforcing countywide excise tax hikes in the face of large-scale smuggling. The federal government can’t prevent people from illegally crossing into California; how will government at any level keep illicit smokes from crossing the state’s porous county borders and entering through its busy ports? Suppose Los Angeles County imposes a countywide excise-tax increase of $2.00 per pack but Orange County declines to lift its rate. Does anyone rationally believe that illicit cigarettes will not roll into LA en masse from Anaheim or another city?

We have also built a statistical model designed to estimate statewide cigarette smuggling rates. We estimate that California’s state smuggling rate through 2013 was equal to 31.5 percent of the total market already. If a $2.00 statewide per-pack hike is adopted, it will rocket to 63.0 percent of the total market, easily eclipsing New York as the state with the most smuggled cigarettes.

The irony of the excise tax hikes — sold as a way to improve health — is that the illicit behavior resulting from high cigarette taxes may actually undermine the health benefits lawmakers hope to achieve.

A 2008 study by economist Michael Lovenheim looked at casual smuggling of cigarettes and found that the percentage of cigarette consumers who smuggle is between 13 and 25 percent. He concludes that “the central implication of this study is cross-border smuggling confounds many of the potential health and revenue gains from cigarette taxation.” He is not the only scholar to come to such a conclusion.

Lawmakers bent on raising excise taxes are well-intentioned but misguided. Raising excise tax rates will increase lawlessness without necessarily bringing meaningful public health benefits.