(Editor’s note: The following are prepared remarks by Michael LaFaive, director of the Morey Fiscal Policy Initiative, presented at the Reason Foundation’s “Revitalizing Detroit After Bankruptcy” roundtable discussion held at the Crowne Plaza Pontchartrain in Detroit on Feb. 20, 2014.)
Audrey Spalding, director of education policy, explains in this Op-Ed at MLive today that despite a negative portrayal in the media, school choice has benefitted tens of thousands of students across Michigan access better schools.
Senior Economist David Littmann writes in the latest edition of DBusiness Magazine that it is “Full Steam Ahead for State’s Economy.” In the article, Littmann discusses why certain factors — including increased auto sales, lower state taxes and Michigan’s right-to-work law — make for an optimistic outlook in 2014 for the state’s economy.
WOOD Radio in Grand Rapids and WWJ AM950 in Detroit are both reporting on the Center’s new VoteSpotter app, which allows users to give instant feedback on how their legislators vote on key bills. Executive Vice President Michael Reitz also discussed the app, which is powered by MichiganVotes.org, on “The Frank Beckmann Show” on WJR AM760 in Detroit. Leader Publications, which prints the Niles Daily Star and Dowagiac Daily News, also reported on the app.
The recent defeat of a unionization effort by the UAW at a Volkswagen plant in Tennessee was not only a major setback for the union, but also for those pushing "card check" legislation.
Card check legislation, officially known as the "Employee Free Choice Act," was introduced in Congress in 2009 and would "authorize the National Labor Relations Board to certify a union . . . when a majority of employees voluntarily sign authorizations designating that union to represent them."
Audrey Spalding, director of education policy, was a guest on “Let Iit Rip” on Fox2 Detroit, discussing college affordability and the statewide Educational Achievement Authority.
House Bill 4808, End mandatory life for very serious offenses by minors: Passed 35 to 3 in the Senate
To revise Michigan's mandatory life sentence with no chance of parole for certain very serious crimes committed by minors. The bill is linked to Senate Bill 319, which would make life without parole no longer automatic in these cases, but prosecutors could request it. Otherwise, the minimum sentence would be 25 to 40 years, and the maximum at least 60 years. This and SB 319 respond to the U.S. Supreme Court's Miller v Alabama decision. The bills would not apply the new standard retroactively to the approximately 350 current prisoners in this category, but include a provision authorizing parole hearings for them if a future ruling requires this.
Bridge magazine has a good article about the importance of encouraging students to have fulfilling careers in an area that best fits them rather than assuming more schooling means a greater education and always pushing them toward universities.
The piece is written by Glenda Price, president of the Detroit Public Schools Foundation and former president of Marygrove College. She wrote:
A new commercial is attempting to make Michigan residents fear electricity deregulation.
It claims that Texas "decided to experiment with deregulating their electricity," and subsequently, prices "shot through the roof" and "blackouts threatened communities." It then tells that a proposed bill in this state that would "deregulate Michigan's electricity."
Labor Policy Director F. Vincent Vernuccio appeared on PBS News Hour and WTVC TV-9 in Chattanooga, Tenn., to discuss the attempt by the UAW to unionize a Volkswagen plant in that city.
Mark Perry, a member of the Center’s Board of Scholars and an economics professor at the University of Michigan-Flint, has an interesting blog post today at Carpe Diem that lists the GDP of each state with a comparable foreign country.
Michigan, with a 2012 state GDP of $400 billion, ranks 13th in the nation and is comparable with South Africa, whose 2012 GDP was $383 billion.
Though state spending on public education has increased in recent years, and though the governor recently proposed a further increase, the money isn't enough for some school officials.
Some district leaders, including South Lyon Superintendent William Pearson, Livonia Superintendent Randy Liepa and Howell Associate Superintendent of Business Rick Terres, have complained publicly that state funding is declining.
The Daily Caller is reporting on a story Michigan Capitol Confidential broke about a Michigan union that bullied members who exercised their worker freedom rights. The International Union of Operating Engineers Local 324 published the names of 19 former members who resigned under Michigan’s right-to-work law in its statewide winter 2013 newsletter, labeling the workers as “freeloaders.”
President Obama came to Michigan recently to sign the $1 trillion farm bill and in a press release touting the bill, Sen. Debbie Stabenow called agriculture the state's "second-largest industry after manufacturing."
That is false.
A quick look at the data shows there is no possible way to justify calling agriculture Michigan's second-largest industry. Yet the claim has been repeated for years. This is especially distressing because Sen. Stabenow, D-Lansing, is the chair of the Senate Agriculture Committee and should know the size and scale of the industry.
There are two things to keep in mind regarding the $1 trillion farm bill that President Obama recently signed into law at Michigan State University.
First, agriculture is a small component of both the U.S. and Michigan economies. According to the U.S. Bureau of Economic Analysis, the U.S. economy produced $16.2 trillion worth of output in 2012. Farming comprised $167 billion of this total, or about 1 percent. Only 1.5 percent of workers are employed in agriculture and related industries.
Michigan’s corporate welfare programs, which should be eliminated, at the very least need more transparency, according to an Op-Ed in Sunday’s Detroit Free Press co-authored by Assistant Director of Fiscal Policy James Hohman and Eric Mosher, a program associate at the Public Interest Research Group. The commentary originally was written as a Mackinac Center Viewpoint.
It’s an election year, which means many Michigan politicians want to be seen letting taxpayers keep more of their own money.
As they proceed, however, they should take a long view of measures that aren’t just politically popular, but will have positive effects on future employment and economic growth in this state.
Minimum wage laws are regarded by economists of all stripes as among the least efficient tools for boosting the welfare of those at the lower end of the earnings spectrum, inevitably harming many of those they are intended to help.
This leads some to conclude that politicians who champion increasing the minimum wage must be demagogues working for partisan advantage. In reality, most politicians simply don't understand economics. In fact, there is research to support this more generous view.
By Jack McHugh
Good policy is good politics. After accomplishing so much in 2011 and 2012 to move Michigan forward, progress nearly sputtered to a halt in 2013.
Here's how to get back on track:
-- Pass a broad based marginal rate income tax cut. This is an incentive changing reform that will lead to more jobs, higher incomes and a growing, more competitive state economy. In contrast, boutique tax cuts like vehicle "sales tax on the difference," and political tax changes like increasing homestead property tax exemptions have none of those virtuous effects.
President Obama was in Michigan last week to sign a 10-year, $1 trillion farm bill. While much of the debate has centered around the spending on food stamps, buried in the 1,000-page plan are many other provisions that are indefensibly bad policy.
While some are praising, and others complaining, about slightly rolling back spending on food stamps and eliminating some of the direct payments to "farmers" (who did not actually farm), the bill goes far beyond that. This bill continues special subsidy deals to farmers in every area in the country — from corn and beans to rice and peanuts to sugar and catfish.
Senate Bill 475, Establish trampoline court regulations & immunities: Passed 25 to 12 in the Senate
To establish standards and regulations for recreational trampoline court facilities and operators, and grant these businesses limited immunity from lawsuits if the proposed regulations are followed.
Michigan's school employee pension system is underfunded by $23 billion and to return it to full funding, it is necessary to continue to pay the system's annual required contribution.
The annual required contribution is the amount necessary to pay for the pensions that employees earn and to catch up on unfunded liabilities under the state's assumptions. The state has not been paying the full amounts.
The Mackinac Center is pleased to announce that three new economics professors have agreed to join our Board of Scholars. Our Board of Scholars members assist us in our research, helping us produce studies that are of the highest quality.
Chris Douglas is an economics professor at UM-Flint. He authored a 2011 Mackinac Center study, and has published in Oxford Review of Economic Policy, Journal of Economics, and Journal of Applied Econometrics, among others. Douglas's research interests include gasoline markets, smoking externalities and the economics of sports.
Mark Schauer, Democratic candidate for governor, is railing against tax breaks for businesses.
In a recent ad Schauer alleges that Gov. Rick Snyder cut education spending and used the revenue "to give tax breaks to businesses even if they send jobs overseas." Schauer's spokesperson, Zack Pohl, reiterated the claim in a recent Detroit Free Press article: "Snyder chose not to find new revenue for education because he used that money to pay for his huge $1.8 billion corporate tax break." The media has recently given more scrutiny to this narrative.
(Editor’s note: This is an edited version of testimony provided by Mackinac Center Senior Economist David Littmann to the Senate Finance Committee regarding Senate Bill 402.)
While Michigan is doing better, it should have been capitalizing far more on the past two years of national economic expansion. After all, the unusually low financing rates that have served as a catalyst for impressive improvements in auto industry sales, employment and profitability are unlikely to remain this favorable for another full calendar year.
