2012 Off to a Great Start — Six Significant Legislative Reforms

As reported in the Spring 2012 Impact (“25 Reforms in 2011”), last year was a banner year for government reform in Michigan. While the pace has slowed in 2012, we’re still making important progress.

1. School pension reform. As this issue of Impact goes to the press, there is agreement between the House and Senate on discontinuing post-retirement health care benefits to new school employees, and requiring current retirees to pay 20 percent of cost for this benefit (up from the current 10 percent). School employees would also have to kick-in more for their pensions. The final agreement may also include closing the school pension system to new employees, as was done for all state workers hired since 1997. This would be transformational, making Michigan just the second state to place itself on a glide path to eventual elimination of government employee legacy costs. Stay tuned to Mackinac.org and CapCon for the latest.


2. Online charter “cyber school” expansion. For reasons appreciated by teacher unions and the conventional school establishment, Michigan allows just 1,000 students statewide to benefit from innovative online learning opportunities. This will gradually increase to 2 percent of the state’s public school students — a partial reform since the state Senate had earlier voted to eliminate the artificial enrollment cap altogether. It’s still a demonstrable increase for those on waiting lists.


3. School union dues collection. Public school payroll systems will no longer be vulnerable to teachers union dues collection abuses under a new law that prohibits school districts from automatically deducting these from employee paychecks (and forwarding the money to the union). A fringe benefit, the bill also requires more rigorous union reporting of how they spend those dues, including lobbying and political campaigns.


4. “Stealth unionization” (finally) banned, Part 1. Citizens were outraged when the Mackinac Center exposed a scam in which money from thousands of disabled individuals who get home health assistance was redistributed to the SEIU government employee union as phony “union dues.” Although delayed, the Legislature finally passed a bill banning this, and the looting ended in May with a state Attorney General opinion cutting off the flow sooner than scheduled.


5. “Stealth unionization” banned, Part 2. University graduate students who earn money by working as research assistants for professors won’t have to worry about union dues being taken from their paychecks under a new law signed by Gov. Snyder in March. The Mackinac Center Legal Foundation highlighted this potential abuse by representing a group of University of Michigan students resisting forced unionization.


6. As this issue of Impact goes to press, work is still underway on cutting the property taxes currently imposed on business tools and equipment. This pits local governments (who want the money) against small businesses and manufacturers, who point out that a tax on the tools and equipment employers who provide goods, services and jobs may be destructive. The Mackinac Center’s first of many articles pointing out the repeated inefficiency of this “personal property tax” was published in 1990. Nothing is guaranteed, but the odds favor some reform this year.

As legislators’ memories fade of the voter anger that swept in a Republican governor and big legislative majorities, reform in Lansing becomes increasingly difficult. Nevertheless, as the preceding demonstrates, progress is still made by efforts from those committed to limited government and free-market solutions.

Going forward, the emphasis will likely shift to protecting progress against union-funded ballot measures, which would undoubtedly usher in a “back to the future” return to the previous decade’s decline. Some major battles have been won, but the war for Michigan’s future is hardly over.