The work of Michael D. LaFaive, Todd Nesbit, Ph. D. and Scott Drenkard is used as the basis of a reports by the Wall Street Journal, Reason, New York Post, The Sacramento Bee, The Wichita Eagle, SILive.com, CSPnet.com and several radio stations in Kansas: WHBL, WSAU, WNCY, WTAQ, WYDR. An op-ed by Dr. Nesbit also appeared in the Columbus Dispatch.
Senior Legislative Analyst Jack McHugh’s Feb. 18 testimony to a House committee received attention in media outlets including WOODTV, Detroit Free Press, The Detroit News, Grand Rapids Press, Lansing State Journal, WZZM 13, Battle Creek Enquirer and HometownLife.com. Members of the House Tax Policy committee expressed concern about the $9.38 billion tax credit liability estimate from Michigan Economic Development Corp (MEDC), a nearly $3 billion increase from previous estimates. McHugh’s testimony also questioned the lack of economic development and transparency from the MEDC.
(Editor's note: Jack McHugh, senior legislative analyst, delivered this testimony to the Michigan House Committee on Tax Policy on Feb. 18, 2015.)
I’m going to touch on three issues in the next few minutes. First, some recent history on Michigan’s government economic development programs. Second, characterizing what an extensive body of scholarly research on such efforts has found. And third, offering some reform recommendations.
Approximately two billion dollars in additional taxes will be collected if voters approve a May 5 ballot proposal, based on figures projected by Michigan's legislative fiscal agencies. Here is the breakdown:
The May 5 ballot measure would increase the state sales tax from 6 percent to 7 percent. If approved by voters it would by itself collect an additional $1.427 billion in sales tax each year, and also automatically trigger an additional $523.9 million tax increase in the first year, and $663 million annually when all tax changes are fully realized (not counting inflation indexing provisions that could make the number higher in future years).
Last year, the Legislature passed a bill that blocks the direct sale of automobiles in Michigan. This makes it significantly more difficult for innovative car manufacturers, such as Tesla and Elio, to do business in Michigan, and limits the choices of consumers. Although cars dealers benefit from having their competition curbed, a 2009 study by the U.S. Department of Justice claims that this policy, according to the best available estimate, costs consumers about $2,000 extra per vehicle, or about 9 percent of the average cost of a new car.
By Jack McHugh
Only two roll call votes occurred in the full House and Senate this week. Two substantive committee votes are also described in this report.
Senate Bill 44, Hold GOP presidential primary on March 15, 2016: Passed 38 to 0 in the Senate
To require the Republican presidential primary election to be conducted on March 15, 2016, rather than Feb. 23 as currently required.
Executive Vice President Mike Reitz and Miriam Aukerman, a staff attorney with the ACLU of Michigan, recently co-authored an Op-Ed in the Lansing State Journal outlining the “overcriminalization” of Michigan and how the Legislature can take steps to correct the problem.
(Editor’s note: Jack Spencer is capitol affairs specialist for Michigan Capitol Confidential and a veteran Lansing-based reporter. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)
Michigan House Republicans recently released a reform agenda that calls for closing the state-run school employee retirement system to new employees. Senate Majority Leader Arlan Meekhof, R-West Olive, reiterated the proposal.
The necessity of closing the current defined-benefit pension system and instead offering new employees a defined-contribution plan is simple: the state underfunds pensions.
The 2015-16 House Republican legislators have laid out a solid plan with many great ideas for legislative goals they want to accomplish. Many of these priorities would limit government interference in the economy, establish more freedom for citizens and align with long-time Mackinac Center goals.
By Jack McHugh
Senate Bill 34, Revise concealed pistol license procedures: Passed 28 to 9 in the Senate
To eliminate county concealed pistol licensing boards and transfer their duties to the State Police and county clerks. A similar bill passed by the previous legislature was vetoed by Gov. Rick Snyder due to some specific provisions which have been removed from this version, including one requiring a concealed pistol license be issued to the target of a personal protection order who is otherwise eligible for a permit.
In his recent State of the Union address, President Obama at least called for one area in which governments should scale back their rules: licensing.
The president proposes funding for states to assess these regulations which put obstacles in the path of people trying to legally work, often in the form of fees and mandated education. According to a fact sheet from the White House, “The Budget seeks to reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do by putting in place unnecessary training and high fees.”
Labor Policy Director F. Vincent Vernuccio writes in The Washington Times about the recent announcement by the Bureau of Labor Statistics that union membership is on the decline, including a 7.6 percent drop in Michigan from 2013 to 2014.
Vernuccio draws on his recent study, “Unionization for the 21st Century: Solutions for the Ailing Labor Movement,” to suggest how unions can stem the tide.
The Office of Regulatory Reinvention granted permission to the Michigan Liquor Control Commission to open a review of alcohol control rules. The Mackinac Center for Public Policy weighed in on two (beer and wine) of them today.
The Mackinac Center has long had an interest in the state’s beer and wine rules because they, among other things, raise the cost of beer and wine in the state while enriching a handful of crony capitalists. One study indicates that these rules may raise the cost of beer and wine by 6.4 percent to 30 percent, depending on the price.
Bridge Magazine has just announced that it will be releasing its report card grades for Michigan schools next week. Bridge's report card ranks schools in a way that is nearly identical to how the Mackinac Center ranks schools on its annual school report cards. Both report cards take into consideration a school’s poverty level when comparing their performance to other state schools. This should not be surprising, since Bridge credits the Mackinac Center for its methodology.
WZZM-TV13 in Grand Rapids recently featured a Mackinac Center study on the “overcriminalization” of Michigan and the number of new laws passed each year. Michigan has a far larger penal code than surrounding states.
“Most lawmakers come into office not thinking about the laws they want to delete, but they think about the laws they want to create,” Executive Vice President Michael Reitz, who co-authored the study with the Manhattan Institute, told WZZM.
Michigan has thousands of businesses that are constantly responding to people’s changing wants and needs. This means that the state economy is gaining and losing jobs simultaneously. But it also means that the state’s economic development strategies are unfit to meet their stated goals of improving Michigan’s job picture.
By Jack McHugh
Since the Jan. 15 opening day, members of the new 98th Legislature have introduced 196 bills and proposed 12 amendments to the state constitution. It will be several weeks before any bills get a vote so this report describes some new bills of interest.
Some legislators have introduced fiscally sound ideas to fix Michigan’s projected deficit. The budget hole was created by select tax credits largely approved by a previous Legislature with Gov. Jennifer Granholm.
State Rep. Sam Singh, D-East Lansing, told MIRS News (subscription required) that the Legislature may want to scale back funding for the Michigan Economic Development Corp. to deal with the problem.
President Obama recently announced his goal to provide two years of “free” community college for American workers. This has been met with cheers from community college leaders, high school administrators, and plenty of Americans.
Such cheers, however, are not such a clear sign that President Obama would have us believe in the wisdom of providing free community college education. First, let’s not pretend that this is going to result in saving the country money on education — it merely changes who foots the bill. Instead of people attending community colleges paying for their own education, the American taxpayer will be tasked with doing this. Second, there is no reason to suspect that this policy will actually help anyone.
Michigan became the 26th state 178 years ago today. Here are some commentaries that give a glimpse into the state’s early days.
Michigan: Privatization Pioneer
Education Policy Director Audrey Spalding was a guest on “Current State” on WKAR-AM90.5 this morning, discussing school choice ahead of Tuesday’s celebration of National School Choice Week at the Michigan Capitol. The discussion included charter public school performance and why families utilize the Schools of Choice program. Also on the show was Rep. Sarah Roberts, D-St. Clair Shores, who introduced anti-school choice legislation last year.
An important if usually under-the-radar public policy issue is occupational licensing – state rules that require residents to meet various criteria (and pay for them) before they may earn a living in a particular profession.
Rolling back licensure mandates requires taking on groups with a vested interest in preserving these restrictions on opportunity (and potential competitors). To its credit the previous Legislature did do some good if still-modest work in this area. In a bipartisan manner, legislators eliminated rules having to do with dieticians and nutritionists, interior designers, auctioneers, community planners, carnival workers, ocularists, school solicitors and immigration clerical assistants. It also tweaked some licensing requirements for barbers.
Although union membership in Michigan fell 7.6 percent from 2013 to 2014, the full effect of the state’s right-to-work law has yet to be seen, according to Labor Policy Director F. Vincent Vernuccio.
“Right-to-work still has not kicked in for many Michigan workers,” he told The Detroit News. “As the contracts with the Big Three expire later this fall, tens of thousands of UAW autoworkers will be eligible for right-to-work. This includes many second-tier workers who are being paid far less than their co-workers because of UAW negotiated contracts. Past deals favoring older workers at the expense of new ones may come back to haunt to the UAW when younger workers are able to choose whether or not to support a union that short-changed them.”
By Jack McHugh
In the four regular session days so far, members of the new 98th Legislature have introduced 88 bills. It will be several weeks before any substantive non-procedural votes are taken, so this report describes some new bills of interest.
House Bill 4032: Regulate Uber, Lyft, etc.; preempt local bans
