Studies

What's Wrong With Michigan's No-Fault Automobile Insurance

A PDF copy of this study is available.
On Oct. 1, 1973, Michigan joined a growing number of states in adopting a “no-fault” automobile insurance law, which has remained in tack ever since. This policy brief outlines the variety of problems plaguing Michigan's auto insurance laws and explains why these issues are leading to the most expensive car insurance premiums in the nation.
The brief also describes several reform ideas for how to fix Michigan's no-fault insurance system. These reforms would maintain the no-fault approach to car insurance, but would put downward pressure on premiums, a benefit that would be enjoyed by all Michigan drivers. … more

A Survey of Michigan Parents Who Use School Choice

This report highlights the results of a survey conducted of Michigan parents who exercise some form of public school choice for their children. Among the diverse group of 837 parents from across the state who were interviewed, substantial majorities gave high marks to their chosen schools, said the experience boosted their expectations of their children’s future success and would likely recommend choice options to other parents. Respondents also said that information they receive from other parents influences their school choice decisions, in addition to published school performance data and in-person visits. Survey results further revealed that most parents highly value academics in making their decision, though safety and discipline are leading considerations as well. … more

Michigan School Privatization Survey 2017

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This is the 15th edition of the Mackinac Center's annual school privatization survey. We ask every school district in the state if they outsource one of the three main noninstructional services — custodial, transportation and food services. The results from this year's survey show that 71.5 percent of school districts contract out for at least one of these services. … more

How School Funding Works in Michigan

Discussions about school funding can create more confusion than clarity. Each state has its own intricacies and peculiarities. Michigan is no exception. Funding flows down from different sources, often based on different formulas and intended for different purposes. There’s no one unified system that controls school funding — rather, schools rely on a number of systems layered on top of each to supply them with resources.
This publication presents a brief overview of some of the key components of Michigan’s school funding system, if it can be called that. The goal is to provide a general understanding of how tax dollars reach schools and what they are intended for.  … more

How to Stop the 'Dues Skim' of Federal Home Health Care and Child Care Funding

A PDF copy of this study is available.
Introduction
United States taxpayers currently spend $545 billion annually on the federal government’s Medicaid program. This money is meant to aid the disabled and vulnerable and to support low-income families. However, millions of these dollars are being redirected before they ever reach the people they are meant to support.
About $41.5 billion of Medicaid funds are sent to states through the Home and Community-Based Services “waiver” program.This waiver allows those eligible for Medicaid — individuals suffering from a disability, illness or other affliction — to use these funds to pay for in-home care, as opposed to enrolling in an institution. These in-home services are often provided by family members or friends, or other local, independent providers. Medicaid payments are sent directly to these providers on behalf of their Medicaid-eligible “client.”
  … more

This Isn’t Working: How Michigan’s Licensing Laws Hurt Workers and Consumers

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The Declaration of Independence lists the “pursuit of happiness” as one of Americans’ “unalienable rights.” For most, this includes the ability to pursue a vocation of their choice. But occupational licensure laws stand in the way of many people trying to exercise this right. For too many people, the right to pursue their dreams has been halted by governments that require them to jump through hoops, pay fees and meet other often arbitrary and inconsistent requirements.
This report gathers data on every occupational license in Michigan. It describes the impact and costs of licensure laws, as documented in the empirical research that has been conducted on this issue. It explains how and why licensing requirements are typically created, but also outlines some of the fundamental problems with a broad licensing regime. Finally, it compares Michigan’s licensing requirements to those of other states and makes recommendations for how the state could reform occupational licensure for the benefit of job-seekers and entrepreneurs and for the state’s economy as a whole. … more

Cigarette Taxes and Smuggling: A 2016 Update

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Introduction
Since 2008 the Mackinac Center for Public Policy — and more recently in conjunction with the Washington, D.C.-based Tax Foundation — has worked to estimate the degree to which cigarettes are smuggled into and out of American states. Our research, and that of other scholars too, suggests that smuggling is a rampant problem, particularly in states with high cigarette excise taxes.
Unintended and unforeseen consequences are a frequent problem in public policy. Few politicians realize when they vote for higher excise taxes that doing so may dramatically increase cigarette-related crime, such as smuggling. These crimes not only deprive local and state governments of tax revenues, they also tend to descend into violence, which produces all sorts of unnecessary damage. Policymakers should take these realities into consideration when contemplating how much to tax cigarettes.
This report analyzes the relationship between cigarette tax rates and cigarette smuggling rates. It relies on the same statistical model used in our previous studies, but uses the latest available data from 2014. New York State once again claims the highest smuggling rate in the nation. In fact, according to our analysis, New Yorkers consume more smuggled cigarettes than they do legally taxed ones. New York state has the highest excise tax rate on cigarettes in the country at $4.35 per pack and New York City adds another $1.50 tax. Arizona, Washington state, New Mexico and Minnesota round out the top five states for percentage of in-bound smuggling. Michigan ranks 12th, down two positions. … more

Problems With Estimating the Union Wage Premium

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The “union wage premium” — the amount a union worker makes in wages and salary above a similar nonunion worker — is often used to highlight the potential value of joining a union. Unions claim that if workers unionize, their wages will increase, because allegedly the average union worker makes more than the average nonunion worker. If this were universally true, it seems like a compelling argument for enrolling in a union. However, the decline in union membership rates over the last several decades shows that an increasing number of workers have not been persuaded to join existing unions or organize new ones, suggesting that they are not convinced that becoming a union member will automatically boost their pay.
Some still maintain that union members earn significantly more, on average, than nonunion workers: the American Federation of Labor and Congress of Industrial Organizations union says that “union workers’ wages are 27 percent higher than their nonunion counterparts” and the U.S. Secretary of Labor claims that union workers make $950 per week compared to nonunion workers’ $750 per week. But these statistics are based on a relatively simplistic view of the data. As this paper will demonstrate, there are significant challenges to using official government data to estimate the size of the union wage premium.  … more

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