Senate Bill 934, Preempt $10.10 minimum wage initiative; hike mandated minimum: Passed 24 to 12 in the Senate
To concur with the House-passed version of a bill to repeal the current state minimum wage law that makes it unlawful to employ a worker for less than $7.40 an hour, and replace it with a new law gradually increasing the mandated minimum to $9.25 an hour in 2018. The minimum amount the employer of a "tipped" worker must pay will rise from $2.65 to $3.52 by 2018. (A tipped-worker’s employer must pay the difference between this and the regular minimum if tips come up short).
During the battle of Michigan becoming a right-to-work state, opponents predicted doomsday scenarios about what would happen to workers and the state. But in each of the most important economic measures — job growth, income growth and population — right-to-work states are far outperforming non-right-to-work states.
Mackinac Center President Joseph G. Lehman and Fiscal Policy Director Michael D. LaFaive wrote in Saturday’s Wall Street Journal about Michigan’s GOP-controlled Legislature and how it caved to Democrats on raising the minimum wage in exchange for support in raising the gas tax.
Some Michigan legislators appear to not understand the effect of Detroit pension legislation passed by the House last week as a condition of giving the city $194.8 million in state dollars — and as a result are misrepresenting what the bill does.
For example, on Facebook House Speaker Jase Bolger, R-Marshall, stated: "We did not mandate that they go to a DC (Defined Contribution retirement system); we said, however, that the employer (taxpayer) cannot contribute more than 7 percent."
A story in MLive on the movie "Batman vs. Superman" being filmed in metro Detroit demonstrates why it is so hard to get rid of programs that are nearly universally seen as economically destructive.
Susan Dorris, Oakland County film commissioner, provided little concrete evidence of any real economic impact the project will have, despite Warner Bros., which made $1.2 billion last year, receiving $35 million in corporate welfare courtesy of Michigan taxpayers.
While pondering all of the reasons the state House should not have approved a $195 million partial bailout of the Motor City Thursday, I couldn't help but think aloud (with tongue firmly planted in cheek) what a blessing it is to have a full-time, highly paid Legislature.
Senate Bill 791, Revise, make permanent non-transportation 7/8th cent gas tax: Passed 38 to 0 in the Senate
To eliminate the 2016 sunset on a 7/8ths cent-per-gallon gas tax that was originally supposed to expire in 1998 and only be used to clean up leaking underground fuel tanks, but which has been extended several times, and was diverted to other government spending by a 2004 “fund raid” enacted to avoid spending cuts in that and subsequent years' budget.
Numerous media reports are misinterpreting the way Detroit's retirement system will operate going forward.
According to the Associated Press, the bills eliminate, "a provision that would have required new hires to have 401(k)-only retirement plans once collective bargaining contracts expire. Instead, the city and unions could negotiate for pension or hybrid plans as long as the city does not contribute more than 7 percent of an employee's salary to retirement."
As I noted in a previous blog post, Detroit Emergency Manager Kevyn Orr has suggested that Detroit's lenders in effect deserve to lose their shirts because they should have known the city was "openly and notoriously" driving itself into bankruptcy.
Gov. Rick Snyder took a similar shot at lenders last year on the national "Face the Nation" TV program:
Gov. Snyder has referred to the package of bills to give Detroit a substantial amount of state money to alleviate some of its debts as a “settlement.” However, the move is clearly a bailout, even though it’s only a partial one. The way this move is discussed is important, considering that many Michigan residents are against this bail out.
Bridge Magazine, a publication of The Center for Michigan, had a recent series of articles on hydraulic fracturing ("fracking"), and while the author provides some value, including good interviews with residents and a look at the externalities of drilling, the pieces make some errors — one in particular is egregious enough that it should be corrected.
Forbes magazine’s May 5 edition contains an interesting quote from Gov. Rick Snyder taken from a March 27 speech at the “Reinventing America” summit in Chicago:
It is hard not to agree with him. Detroit should not get a bailout. Granted, he was talking about a federal bailout, but if it applies at the federal level, it should apply at the state level. His ideas for immigration reform are solid, too, but should be expanded.
The May 5 edition of Forbes magazine contains an interesting quote from Michigan Gov. Rick Snyder, taken from a March 27 speech at the “Reinventing America” summit in Chicago:
How can we bring people to our state? Don’t give Detroit a bailout. Give us 50,000 green cards for people with STEM degrees. Let them come here and work.
The Mackinac Center is hosting an Issues & Ideas forum at noon on Tuesday in Lansing to discuss ‘The Detroit Bailout and Meaningful Pension Reform.”
The event will be held at the Michigan Restaurant Association. No registration is required and lunch will be provided.
Fiscal Policy Director Michael LaFaive outlined in Sunday’s Detroit Free Press by the state should not give Detroit a bailout, and why if legislators force that move on taxpayers statewide they need to accomplish meaningful pension reform for city employees.
Michael LaFaive, director of the Center’s Morey Fiscal Policy Initiative, discusses why taxpayers across Michigan should not be forced to bail out Detroit in this new five-minute video recently posted to YouTube.
You can read more about Detroit’s self-created fiscal crisis and why the city should not receive state aid here.
The Center received mentions in The Wall Street Journal on two consecutive days this week.
The first, on Monday, was in a story about the disagreement statewide over whether or not taxpayers should be on the hook for bailing out Detroit. The story noted a public opinion poll we commissioned that found Republican and Independent voters are overwhelmingly opposed to the bailout.
Steve Cook, president of the Michigan Education Association, was quoted Tuesday in MIRS after he spoke about school funding at the State Board of Education meeting:
Cook's comment is a reference to the private, for-profit companies that manage charter public schools. Cook made $212,848 in 2013 as president of the MEA, a private organization with annual revenues of $133 million.
By Jack McHugh
A Detroit money-grant and reform legislative package just introduced in the Michigan House contains dozens of new institutional arrangements, but just two critical and concrete changes to the city's finances, one of which is both long term and potentially transformational all by itself: Ending the practice of granting new city employees traditional defined benefit pensions.
State legislators are discussing which strings to attach to a $194 million partial Detroit bailout.
One of those strings — a requirement that the city close its pension systems to new members — is being met with opposition over alleged "transition costs" from the move. But these costs are completely optional and easily avoidable, as other governments that have reformed their pension systems show.
A bipartisan 10-bill package has been introduced in the Michigan House related to a proposed Detroit bailout. A link to the concise, objective, plain-English MichiganVotes.org descriptions of all 10 bills is here.
It’s worth noting that the grant (or bailout) bills do not require passage of the reform bills to become law. Also, nothing would prohibit a future Legislature from repealing the reform measures, although in practical terms this could get complicated given that a potential federal court bankruptcy settlement may be all wrapped together with the grant and reforms — if they are approved.
Labor Policy Director F. Vincent Vernuccio writes in The Detroit News today how an increased minimum wage would negatively impact waters, bartenders and other tipped workers.
Research Associate Jarrett Skorup was a guest on “Let It Rip” on FOX2 Detroit with host Charlie Langton Sunday, discussing why corporate welfare for Hollywood is bad for Michigan taxpayers and how that $50 million a year could be better spent.
A new Minnesota law on civil asset forfeiture prevents the government from keeping money and property seized without a criminal conviction.
As noted by Nick Sibilla from the Institute for Justice:
Now the government can only take property if it obtains a criminal conviction or its equivalent, like if a property owner pleads guilty to a crime or becomes an informant. The bill also shifts the burden of proof onto the government, where it rightfully belongs. Previously, if owners wanted to get their property back, they had to prove their property was not the instrument or proceeds of the charged drug crime. In other words, owners had to prove a negative in civil court. Being acquitted of the drug charge in criminal court did not matter to the forfeiture case in civil court.
As described in a recent post, one of the challenges surrounding a partial bailout of Detroit using $350 million in state money spread over 20 years is that the current Legislature cannot guarantee that a future Legislature will follow through on the commitment.
