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.
Corporate welfare paid to Hollywood stars who visit Michigan to make movies “is costing taxpayers a fortune,” Michael LaFaive, director of the Morey Fiscal Policy Initiative, told WNEM-TV5.
LaFaive said not only is taking money from Michigan taxpayers and giving it to Hollywood troublesome, but so is the lack of transparency surrounding the film subsidies.
Surplus tax revenue collected statewide and put into the state’s “rainy day fund” that is meant to pay for unforeseen statewide needs that would benefit all taxpayers is being targeted as part of Gov. Snyder’s plan to bail out Detroit, according to The Detroit News.
MIRS news service in Lansing reported recently on a difference of interpretation in school spending between the Mackinac Center for Public Policy and an Oakland County school district official.
In the article, Mackinac Center Education Policy Director Audrey Spalding was quoted as saying, "The West Bloomfield superintendent is repeating the same misinformation that we have seen from the MEA and other school officials. By only considering the foundation allowance, he is ignoring nearly $1,200 per student in funding from state taxpayers."
Detroit Emergency Manager Kevyn Orr visited Lansing last week trying to persuade hesitant state lawmakers to ante up $350 million toward a partial bailout for the city.
It’s a tough sell for reasons Orr himself expressed with regard to a group that is getting no love from current policymakers — those who lent money to the city and would like to get repaid. Here is how he characterized the actions of some of these lenders:
As legislators consider a plan to partially bail out Detroit, they should consider some of the favors the state has already made to Detroit’s finances. These include casino taxes, utility taxes and borrowing. Perhaps the biggest favor is state generosity in revenue sharing. The state transfers more revenue to Detroit each year than any other government and its transfers go beyond levels justified by population.
A Michigan Capitol Confidential story about the 80 percent decline in membership in the SEIU Healthcare Michigan union is receiving national media attention. Some 44,000 home-based caregivers who had previously been shanghaied into the union under a scheme approved by the Granholm administration have chosen not to join the SEIU now that the stealth unionization has been overturned by law.
Since 2008, Mackinac Center for Public Policy analysts have periodically published estimates of cigarette smuggling in 47 of the 48 contiguous states. The numbers are quite shocking.
In 2012, more than 27 percent of all Michigan in-state consumption was smuggled. In New York, almost 57 percent of all cigarettes consumed in the state were also illicit. This has profound effects on the revenue generated by state (and sometimes local) government.
It’s a truism that a current legislature cannot bind future legislatures to follow through on its own policy and spending preferences. For example, this year’s House and Senate may vote to raise taxes and provide a chicken in every pot, but nothing prevents politicians elected in future years from cutting taxes and decreeing, “No more chicken soup for you!”
In previous weeks I’ve stressed the importance of Detroit rescuing itself from a bankruptcy of its own making. Among the possible solutions are asset sales, competitive contracting, ending unnecessary services and more, including some big, bold, outside-the-box ideas (see “Could Detroit Support Two Airports” and “Belle Isle Proposal To Be Featured On Fox Business”).
