Michigan House Republicans argue that their plan to reform the school retirement system offers superior savings over a Senate-passed bill that would close the system to new employees. But much of the supposed savings come from accounting gimmicks. A better idea is to close the plan to new members, where the state will not be able to play these games.
Republicans in the Michigan House have let alleged “transition costs” attached to closing the state’s defined-benefit school pension system plan to new hires halt what would be a transformational fiscal reform. The issue is how the state “catches up” on current shortfalls in underfunded state pension funds. Paying huge upfront “transition costs" is one way, but it’s not the only way - incurring these costs is entirely optional.
The MichiganVotes.org weekly roll call report that just went out to newspapers all over the state contains suggestions that the reform momentum generated by the 2010 election may be giving way to complacency and a reluctance to rock the government establishment's well-appointed yacht.
Y = Yes, N = No, X = Not Voting
Senate Bill 1125, Authorize more state government housing subsidy debt: Passed 33 to 5 in the Senate
To increase from $3 billion to $4.2 billion the amount of debt the Michigan State Housing Development Authority (MSHDA) may incur in performing its role of providing taxpayer-backed mortgage loan guarantees, subsidies to certain developers and more.
If some legislators have their way, the state would gradually raise its minimum wage to $10 per hour and adjust it to inflation.
This would give Michigan the highest mandated minimum wage in the nation. It would also greatly harm the majority of workers and businesses in the state.
The president of the Ann Arbor teachers union, who has been a supporter of the now-suspended effort to recall Gov. Rick Snyder, said he will shift his efforts to the union-backed “Protect Our Jobs” ballot initiative, according to AnnArbor.com. The online news site also reported that Mackinac Center President Joseph G. Lehman issued an open letter to UAW President Bob King to publicly debate the issue.
Who was Ray Bradbury that he should be remembered by readers of this blog? Yes, he was a formidable writer, an enchanter, a conjuror of fantastic alternative realities. But, specifically, what is it about Bradbury’s legacy that bears mention here?
From my personal experience, Bradbury took me to Mars, past the Golden Apples of the Sun to sip goblets of Dandelion Wine with the Illustrated Man. His prose and subject matter resonated with this burgeoning science fiction/fantasy fan and future literature student far more than the books and stories by Isaac Asimov that I still read with zest. Asimov, you see, despite my inability to recognize or articulate it at the time, presented scientific knowledge as the summa of human understanding, desires and happiness. Not so with Bradbury, who portrayed the emptiness of lives devoid of magic, imagination and mystery. Science, too, is important in this universe — but balanced against the realities of humankind’s condition it is depicted as less a panacea for human frailties and suffering than as a placebo. Science makes life better, to be sure, but it also threatens to dehumanize if left unchecked by what T.S. Eliot and Russell Kirk deemed the permanent things — shorthand for recognition of a moral order that abjures decadence and materialism and champions beauty, truth and ordered liberty.
June 7, 2012
Mr. Bob King
President, UAW
UAW International Headquarters
Detroit, MI 48124
Dear Bob,
I was genuinely disappointed when event organizers said you withdrew from our scheduled debate over the “Protect Our Jobs” ballot initiative at the Detroit Regional Chamber of Commerce’s Mackinac Island Policy Conference last week. I looked forward to a lively and informative exchange on this far-reaching constitutional amendment. John Bayerl, who served as your last-minute replacement, did a fine job, but I’m sure the attendees would rather have heard your take on a proposal you’ve passionately endorsed.
Mark J. Perry, an economics professor at the University of Michigan-Flint and a member of the Mackinac Center’s Board of Scholars, recently testified before the U.S. House Committee on Oversight and Government Reform, according to MLive.
Perry, who also runs the Carpe Diem blog, told the committee that President Barack Obama’s energy policy, which the president has called an “all of the above” approach, is actually more of a “some of the above” policy, MLive reported. A video of Perry’s testimony is embedded in the story. His comments begin around the 26-minute mark.
During a debate last week with Mackinac Center President Joe Lehman, John Bayerl, a teachers union member from Dearborn standing in for UAW President Bob King said, “I don’t believe our schools will run without collective bargaining.”
It’s not surprising that a long-time school unionist might see the world this way, but a larger perspective shows it to be false.*
In a "Coalition for Secure Retirement-Michigan" press release arguing against closing the school employee pension fund to new members and converting to a 401(k) plan, former head of the Michigan Senate Fiscal Agency Gary Olson argued that the state would face transition costs mandated by the Governmental Accounting Standards Board.
Opponents of reform repeatedly argue that making alcohol easier to obtain by permitting more retail outlets creates more alcohol-related harms. With the same concern of an overanxious parent, they worry that proximity to alcohol automatically means increased consumption of alcohol. It’s like they don’t trust their kids or something.
The Detroit Free Press and MLive both covered the debate between Mackinac Center President Joseph G. Lehman and a representative of the “Protect Our Jobs” ballot initiative held recently at the Detroit Regional Chamber of Commerce Mackinac Island Policy Conference. MLive also noted it as one of the top 12 moments of the conference. The union-backed proposal would reverse several cost-saving measures achieved by the Legislature over the last 18 months enshrining privileges for the 2 percent at the expense of taxpayers in the Michigan Constitution.
John Maynard Keynes once said that “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”
Today marks the 129th anniversary of Keynes’ birth. Below you can read a sampling of Mackinac Center commentary from years past about the damaging impact Keynes has had on America due to his advocacy of central planning and government spending and those who have been slaves to his ideas.
Huffington Post today cites a 2008 Mackinac Center study co-authored Michael D. LaFaive, director of the Center’s Morey Fiscal Policy Initiative, on the adverse impacts in states that increase cigarette taxes.
Huffington Post cites this 2000 commentary by Michael LaFaive, director of the Morey Fiscal Policy Initiative, which put forth the idea that Belle Isle should be sold to private investors. A recent consent agreement between the state and Detroit would lease the island to the Department of Natural Resources.
A recent editorial in The Detroit News cites Mackinac Center research on the cost to taxpayers of union “release time” and cites this commentary by Jarrett Skorup, research associate for online engagement, in calling on the Michigan Senate to adopt stricter rules to prohibit the practice.
Y = Yes, N = No, X = Not Voting
House Bill 5365, 2012-2013 state budget (non-education part): Passed 20 to 16 in the Senate
The non-education part of an "omnibus" state government budget for the fiscal year that begins on Oct. 1, 2012. (House Bill 5372 contains school, college and university spending.) This would appropriate $34.355 billion, compared to $33.022 billion the previous year. Of this, $16.237 billion comes from state tax, fee and other revenue, and the rest is federal money ($18.118 billion, compared to $17.469 billion the previous year).
The new actuary report on the school employee pension fund shows that the state has a $22.4 billion gap between what it has saved for school employees’ retirement and what workers and retirees have earned.
That is a $4.8 billion increase from last year. All told, the costs to catch up on this underfunded system represent nearly $6,000 per Michigan household.
Historian James Coffield once described the British income tax system as “scaffolding for plunder.” Michigan has its own version — hordes of government tax-borrow-and-spend authorities like Downtown Development Authorities, Corridor Improvement Authorities and at least 10 others that get little public or media attention, have minimal accountability, and once created are almost impossible to dismantle.
(Editor’s note: Below are the edited remarks of Mackinac Center President Joseph G. Lehman that he delivered at a 1 p.m. debate Thursday on the “Protect Our Jobs” constitutional ballot initiative during the Detroit Regional Chamber of Commerce’s annual policy conference on Mackinac Island. Lehman was originally scheduled to debate UAW President Bob King, but the “Protect Our Jobs” campaign instead sent a substitute. After the debate, attendees voted 77-23 percent against the union-backed ballot measure.)
A growing number of school districts are seeking competitive bids on noninstructional services from private contractors as a means to save money. For example, Ypsilanti is looking into a plan that might save about $700,000 — $180 per pupil — by contracting out custodial labor.
Taxpayers in scores of Michigan communities may not realize it, but when they send in their winter and summer property tax payments, some of their money is extracted to pay union bosses not for their assigned job duties, but for time spent on union business. That’s because their school board members, mayors and city councils have signed union labor contracts that require taxpayers to compensate union stewards to do union work on government time.
Walter Russell Mead on the “big lie” of government pension systems — like the one Michigan runs for school employees, which could be put on a glide path to elimination if state House Republicans find a way to say to say “yes” to a Senate-passed bill closing the system to new hires starting next year:
A Wall Street Journal editorial today reports on a new Sierra Club campaign to strangle a natural gas revolution that promises both energy security and an American industrial renaissance. The group’s plan is called “Beyond Natural Gas,” and the Journal quotes Sierra Club Executive Director Michael Brune saying, "We're going to be preventing new gas plants from being built wherever we can."
