(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 Michigan Capitol Confidential or the Mackinac Center for Public Policy.)
In studies, essays and blog posts since 2008, we have noted the raft of unintended consequences associated with Michigan’s illicit trade in cigarettes. Often we zero in on smuggling itself. A quarter of all the cigarettes consumed in Michigan in 2013 were contraband.
Michigan’s prevailing wage law sets an arbitrary mandate for what public entities (like schools) have to pay for construction projects.
Top Republicans in Lansing rightly want to eliminate these mandates, as the Mackinac Center has recommended for years. This is estimated to save taxpayers more than $200 million per year.
Dear Commissioners:
By now you may know that the Mackinac Center for Public Policy has filed a lawsuit against the Michigan Liquor Control Commission over illegal costs associated with a Freedom of Information Act request I submitted. The suit arose out of my investigations into your so-called “post and hold ” rules for distributors and wholesalers of alcoholic beverages. Previous empirical research has shown these rules may artificially raise prices paid by consumers between 6.4 to 30 percent, depending on the product.
News reports today tell of a Macomb County tobacco store burglary by four men who stole cigarettes and escaped capture after a police chase. This unlawful behavior is a direct and unintended consequence of the high excise taxes imposed on Michigan cigarettes ($2 per pack) statewide.
Attorney General Eric Holder last week limited local and state law enforcement from using federal asset forfeiture laws to seize property and funds without proof that a crime has occurred.
According to the most recent state report, Michigan seized $8.8 million worth of property in federally shared asset forfeitures in 2013. Michigan statute allowed agencies to take another $15 million that was officially reported.
By Jack McHugh
As required by the state Constitution, Michigan’s 98th Legislature opened on the second Wednesday in January, Jan. 14. It will be several weeks before any substantive non-procedural votes are taken, so this report describes some bills of interest introduced during the first week.
(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.)
New research by Mackinac Center experts on the effect of high tobacco excise taxes on cigarette smuggling rates is featured in The Washington Post. The study was also cited by WLUC TV-6 in Negaunee, WWMT-TV3 in Kalamazoo, WKZO AM-590 in Kalamazoo and WSJM FM-94.9 in Benton Harbor, as well as Hot Air.
Senate Majority Leader Arlan Meekhof, R-West Olive, said today that the Michigan Legislature will seek to repeal the state’s costly prevailing wage law.
Here is more information on why such a policy change would benefit Michigan.
With little discussion, legislators extended Gov. Granholm’s $75 million-a-year “Blown Away” program. It has never lived up to expectations.
There are allegations that Michigan lawmakers are suffering a bout of “tax cut fever” and have slashed taxes over the past decade. These accusations are a way of denigrating the desire of people who would rather keep more of their money than be forced to give it to Lansing. Considering the state’s financial situation, there is more of an outbreak of tax cut phobia than fever.
The Mackinac Center’s focus is policy, not politics. But since all policy moves through a political process, even a policy institute must exhibit sensitivity to important political developments.
On Monday, Jan. 5, shortly after Michigan Republican National Committeeman Dave Agema posted offensive material to his Facebook page, the Mackinac Center withdrew from a Jan. 9-10 activist event headlined by Mr. Agema. We had intended our withdrawal to speak for itself. But instead of letting our action speak louder than words, we granted interviews that produced reports that confused, rather than clarified, our apparent position.
Michael LaFaive, director of the Morey Fiscal Policy Initiative, was a guest live in-studio this morning on “The Wayne Powers Show” on WKZO AM590 in Kalamazoo, discussing a wide range of topics including migration data, legislators’ priorities and road funding.
Last April, Michigan Capitol Confidential published “From Detroit to the Ivy League: One Student’s Journey,” about Cesar Chavez Academy student Daniel Felix, who comes from a poor community but achieved high academic scores and letters of acceptance from many of the top universities in the country.
Media statewide are reporting on the 2014 Missed Votes Report, including MLive, Midland Daily News, Ludington Daily News, WOOD Radio in Grand Rapids, the Holland Sentinel, WZZM-TV13 in Grand Rapids and WCHT-AM1600 in Marquette.
The Detroit News also editorialized on the matter.
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
