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."
As Michigan legislators debate whether to close the teacher pension fund, a new report on the state’s other major employee pension system — the state employee fund — warns about the need to close the system.
Even though policymakers closed the state employee retirement system to new hires in 1997, thousands of employees still participate in the defined-benefit system and tens of thousands receive benefits. The state has only 61 cents saved for every dollar of benefits earned by members and retirees.
Michigan Information & Research Service News reports that in a legislative battle pitting taxpayers against the prison guards union, the guards have won: There will be no prison privatization in next year’s state budget. This eliminates for now an opportunity to realize hundreds of millions of dollars in savings over the next several years by increasing the incentives of the non-privatized prisons to “sharpen their pencils” and operate more efficiently.
In an article today at Michigan Capitol Confidential, I focus on painting to highlight some of the absurdities in Michigan’s licensing laws. As the article notes, “Michigan law requires painting contractors to pay $235, take 60 hours of state-approved prelicensure education, pass two exams and be over 18 years of age … Michigan is one of only 10 states that licenses painters — and only five states require any education to paint for a living.”
The headline from a recent Reason-Rupe poll of Wisconsin voters is that reformist Gov. Scott Walker is likely to win a June 5 recall election.
Other findings have relevance for debates underway here in Michigan, notably one on government employee pension reforms.
The Service Employees International Union will no longer be able to skim dues from Medicaid subsidies that go to home health aides, according to the Detroit Free Press, Midland Daily News, MIRS Capitol Capsule and The Grand Rapids Press.
The SEIU took more than $30 million in dues over the last six years under the scheme. Michigan Attorney General Bill Schuette issued an opinion Friday saying the collection must end.
Bottom line first — a personal note: I believe Rep. Chuck Moss, R-Birmingham, is sincere, and don't think he has "sold out" to the MEA teachers union. People can agree to disagree on down-in-the-weeds interpretations of GASB rules, etc., and time will tell who is correct. However, even if it involves some relatively minor risks, Michigan will be well served if its leaders enact what would arguably be the most transformational fiscal reform since 1996, closing the school pension system to new employees. That would be a real feather in the cap of this Legislature, whereas failure to realize the oh-so-close opportunity would be a black mark — and a victory for the union.
Y = Yes, N = No, X = Not Voting
Senate Bill 1052, Repeal state “beach grooming” regulations and restrictions: Passed 26 to 11 in the Senate
To essentially repeal state regulations mandating a permit for "beach grooming." The restrictions were passed in 2003 during a period of low Great Lakes water levels, when many lakefront property owners and resorts were unable to access or use beaches because of excessive weed growth.
Senior Economist David L. Littmann today writes in Michigan Capitol Confidential that the state’s competitiveness hinges on school employee pension reform and lays out the case why teachers should be in a defined-contribution system.
More information on the issue can be found here.
Today’s Detroit News editorial cites Center research on the transition costs associated with reforming the Michigan Public School Employees’ Retirement System.
James Hohman, assistant director of fiscal policy, addressed the issue in his recent policy brief titled “Five Options for Addressing ‘Transition Costs’ When Closing the MPSERS Pension Plan.”
