Tax and Union Battles Show Importance of Mackinac Center

(Editor’s note: The following is an edited version of a commentary written by President Joseph G. Lehman in the Spring 2011 issues of “Impact,” the Mackinac Center’s quarterly newsletter for members.)

It’s always challenging to explain why think tanks are important, but two policy debates dominating our headlines today answer that question. Mackinac Center research laid intellectual groundwork for key tax proposals by our governor, and helped define the battle to rein in union influence over government’s cost.

Policy debates aren’t merely academic. They affect how we live. Will taxes be levied simply on all, or will powerful interests get special deals? Will government unions impoverish private-sector workers to support public workers’ deluxe pay and benefits, or will we bring public servants’ compensation in balance with those they serve? Policy changes lives.

Gov. Rick Snyder’s budget proposal radically scales back special deals for politically favored businesses. His language echoes ours, saying government should not “pick winners and losers.” Way back in 1995, we irked many Republicans and our friend Gov. John Engler when we predicted the failure of his new Michigan Economic Growth Authority, which granted tax relief to select firms, and warned that it would distort our tax system and hurt the economy. Some predicted we’d soon be out of business for challenging a popular governor’s signature project. Instead, we were proved right.

Gov. Engler’s successor only doubled down on his unsuccessful initiative. Over a decade of government picking winners and losers, Michigan lost 848,000 jobs. Fiscal Policy Director Mike LaFaive constantly stressed low taxes and equal treatment. While some wondered if we’ve been tilting at windmills since 1995, last year gubernatorial candidate Snyder visited with our analysts, and now he proposes to dramatically reverse tax favoritism.

Key to controlling government’s cost is bringing public-sector employee benefits in balance with those of the private sector. One way is to reform state union laws, which is well within the authority of the Legislature and governor. But unions almost put their privileges out of legislative reach with a ballot proposal in 2002.

Proposal 3 would have amended the constitution to enshrine collective bargaining privileges for all state employees, making it much more difficult to check costs imposed by government unions. Labor Policy Director Paul Kersey detailed the proposal’s hidden costs, and union leader John Denniston listed the Mackinac Center first among the proposal’s “opponents.” Voters defeated the measure 54 percent to 46 percent.

If Proposal 3 had passed, our Legislature today could not even consider a host of recommendations to get union power — and government cost — under control.

Our work from years ago doesn’t always make today’s headlines, but its impact does. A group of Mackinac Center supporters is giving us the biggest challenge in our history. They will match $1.65 million in new support, for a total of $3.3 million for an aggressive campaign to limit the cost of government, stop the federal takeover of our health care and increase freedom in our schools and workplaces. I hope you understand the value of the Mackinac Center’s long-term commitment to limited government and increase your support to help us make and lock in historic gains now.

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Joseph G. Lehman is president of the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.