Reports from the state Capitol late last year were filled with stories of a $1.9 billion tax hike the previous Legislature wants Michigan taxpayers to impose on themselves come May 5. But hours before that vote it appeared all the state's problems had been solved, because time had been found to introduce the following bill, as described by MichiganVotes.org:
For years Mackinac Center analysts have written about the subject of interstate migration. We view it is as arguably the best metric for measuring quality of life issues among many important tradeoffs.
Each year, one source of data Mackinac Center scholars look to for insight is the annual United Van Lines (UVL) National Movers Study. This study tracks relatively closely with actual census data that won’t be released for nearly a year, making UVL data something of a leading migration indicator. This year’s survey reports good and bad news for Michigan. Policymakers in Lansing should do more to improve the state’s prospects.
In a recent interview with Michigan Capitol Confidential, Brandeis University economist Bob Tannenwald remarked that film incentives were a bad deal for taxpayers.
"Another way to look at that would be that a state might be getting only 50 cents or 75 cents value for each dollar per dollar of personal income created by the program for the state’s residents. A state might be better off just sending the checks out directly to its residents rather than creating the program."
MLive columnist Rick Haglund is skeptical about the state’s choices of favored industries, noting that much of the Michigan Business Development Program subsidies go to manufacturers. “[D]eluded by the recent resurgence of manufacturing jobs, state policymakers are doubling down on promoting Michigan as a state that makes things,” he writes.
With the new calendar year upon us it is time to remind lawmakers about sound public policies. One overlooked area the new Legislature needs to take up is large, across-the-board tax cuts. Center analysts have recommended a personal income tax cut from 4.25 percent to at least 3.75 percent.
The Hon. Paul Gadola, who served on the Mackinac Center’s Board of Directors from 1992 to 2008, passed away today at the age of 85.
“Judge Gadola was an early board member of the Center who lent us his good name, as well as his guidance and wisdom, beginning at a time when we had no reputation to lose,” said Mackinac Center President Joseph G. Lehman. “As he served for nearly two decades, the Mackinac Center became the nation’s largest and most effective state-based think tank. We will always be grateful to Paul and we extend our heartfelt sympathy to the Gadola family.”
House Joint Resolution UU, Increase sales tax: Passed 26 to 12 in the Senate
To place before voters in a May 5, 2015 election a constitutional amendment increasing the state sales tax from 6 percent to 7 percent. This is part of a package that represents a net tax increase of $1.945 billion, of which $1.2 billion would go to road repairs and the rest to other spending. The next several bills will not go into effect unless voters approve this measure on the May 5 election.
There is nothing new under the public policy sun. Gov. Rick Snyder announced last week a government reorganization that will marry Michigan’s existing “economic growth and job training efforts under one department.” They’ve been married before and didn’t work well then either. The fact is, corporate welfare doesn’t work and no amount of reorganizing will make it so.
By Jack McHugh
Note: House and Senate votes on a road funding/tax increase package taken after midnight on Dec. 19 came too late for inclusion in this report. A supplemental report on these and other late votes will be sent on Monday, Dec. 22.
Tax Hike/Road Funding Package
Asset forfeiture, illegal language in teacher contracts, union bullying and intimidation and Michigan Education Association finances were the most popular items on our website in 2014. Below are the top 25 articles you, the readers, clicked on during the past 12 months.
Legislators are trying to make a deal for more road funding before they finish their term. Their latest proposal show less sympathy for taxpayers than for spending interests.
The new deal is reported to move the sales tax on gasoline to fund the roads instead of schools, local governments, and other general budget items. Few states levy sales taxes on gasoline. They would also ask voters to approve increasing the state sales tax from 6 percent to 7 percent. The changes reportedly will not go into effect if the proposal loses at the ballot box.
(Editor's note: Jack Spencer is capitol affairs specialist for Michigan Capitol Confidential and a veteran Lansing-based journalist. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)
Michael LaFaive, director of the Center’s Morey Fiscal Policy Initiative, was a guest on “The Tony Conley Show” on WILS-AM1320 in Lansing today, discussing his ideas to cut $2.1 billion from a state budget of more than $52 billion, allowing for tax cuts and providing money for road and infrastructure improvements.
The Michigan House and Senate continue to discuss competing plans to bolster road funding, with some claiming that the House plan would decrease funding for schools.
The Detroit News cites a blog post by James Hohman, assistant director of fiscal policy, titled “When a School ‘Cut’ Is an Increase,” in which he explains: “Rep. Bolger’s plan devotes more of the state’s resources to the roads without reaching deeper into taxpayer pockets. Continued growth can ensure that you can have both more funding for schools and more funding for roads without a tax hike.”
Fiscal Policy Director Michael LaFaive and Barbara Levine, associate director of the Citizens Alliance for Prisons and Public Spending, write in the Detroit Free Press that prison sentencing and parole reform bills now before the Legislature should be revamped to save money and end the practice of warehousing people beyond their parole dates.
Gov. Rick Snyder is touting his handling of the Detroit bankruptcy to media outlets around the country. While the bankruptcy went smoothly compared to other municipal proceedings, there is a difference between emerging from bankruptcy and fixing the city government’s problems. Whether Detroit will be successful remains to be seen.
The Mackinac Center exists to educate Michigan residents about the importance of sound economic policy, and what it looks like. That often means discussing whether existing or proposed laws contribute to, or detract from, freedom and prosperity.
It’s no coincidence that states with greater economic freedom tend to prosper more over time and attract more inbound migration. We know this thanks to various efforts to measure the level of economic liberty in different places. Among the more interesting of these is a new report from the Canada-based Fraser Institute called “Economic Freedom of North America.”
Over the past four years, there’s been a lot of talk about “reinventing” Michigan. Gov. Rick Snyder and this Legislature have made significant strides toward that goal by improving the state’s tax structure, modernizing education policies and beginning to revamp the state’s regulatory regime. On that last item there is more to be done. House Bill 5951 would embrace innovative ride-sharing technologies used by companies such as Uber and Lyft.
Media statewide are reporting on the salary increases for Michigan Education Association union officials, a story that first appeared in Michigan Capitol Confidential.
The Detroit Free Press, Lansing State Journal and Livingston Daily have covered it, as has WKZO 96.5FM in Kalamazoo and the Observer & Eccentric.
A recent CapCon story and video documented the Michigan State Police using civil asset forfeiture to freeze the bank accounts and take the property of two men for months without even charging them with a crime.
Forfeiture is a complicated process, but essentially allows for an end-run around what most people see as basic constitutional rights. Michigan should join other states, like North Carolina or Minnesota, in requiring a criminal conviction before assets can be seized. That won’t happen anytime soon, but in the meantime there are other reforms that politicians should consider during this lame-duck period.
By Jack McHugh
Senate Bill 1149, Authorize new state Senate office building: Passed 25 to 13 in the Senate
To authorize the sale of the Farnum Senate office building in Lansing and construction of a new building for Senators’ offices.
On this date in 1933 the nation said goodbye to one of the biggest social experiments in its history: Prohibition of alcohol. The experiment was a disaster, but the remnants are still with us today in the form of archaic and unnecessary laws and regulations. (See the Mackinac Center’s work on alcohol control here.)
A Michigan House Committee just approved House Bill 5951 introduced by Rep. Tim Kelly, R-Saginaw Township, which would create a statewide regulatory framework for transportation network companies, such as Uber and Lyft. State-based regulations can be worse than locally derived ones, but these proposed rules are reasonable and would make Michigan a leader in innovative transportation services. But how will these services benefit Michiganders?
In the subscription-only MIRS newsletter, Mitch Bean discusses how Michigan House Speaker Jase Bolger’s road funding plan would have affected the state budget had it been in place over the previous decade. While his takeaway was to say that schools would have had less money, it also points to the importance of economic growth to delivering both more school revenue and more road funding.
(Editor’s note: Jack Spencer is capitol affairs specialist for Michigan Capitol Confidential and a veteran Lansing-based journalist. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)
