Proposed legislation that would offer subsidies to companies the state contracts with if those companies hire Michigan-based workers would increase costs, Fiscal Policy Director Michael LaFaive told WEYI-TV25.
“We know that prevailing wage adds 15 percent to 20 percent to the cost of constructing new school buildings, for instance,” LaFaive said.
The Hangar42 film studio scandal in Grand Rapids continues to grow. This week a second person was charged with felony fraud for allegedly inflating the sale price of a piece of property in order to get more tax credits from the state. Some film incentive supporters may argue that since the scam was caught early enough (thanks to the Mackinac Center), no tax credits were granted and therefore Michigan taxpayers lost no money in the deal.
Mlive.com reports that Detroit Public Schools signed contracts with private vendors to clean and maintain the district’s buildings. DPS will join 145 other school districts in Michigan that contract out for these services.
The moves are expected to save the district $75 million over five years, a significant amount of savings. Thirty-two districts were new to custodial service contracting in 2010 and were expecting to save $14 million in the first year of their contracts.
Although details are not yet clear, according to early reports Gov. Rick Snyder’s proposed Michigan Business Tax replacement appears to be good news for advocates of sound economic policy. Whatever the final details, lowering the tax burden on job providers and making the system much less complex will surely provide a boost for commerce in the Great Lakes State.
The House and Senate took no votes on legislation, so this report instead contains several newly introduced bills of interest.
House Bill 4139 (Require government employee health benefit eligibility
audits)
Introduced by Rep. Tim Melton (D), to require state and local governments, schools,
colleges and universities to immediately perform audits to determine that all
persons covered by the health insurance benefits the unit provides are actually
eligible to receive them. Referred to committee, no further action at this
time.
A Detroit News editorial today taking the Michigan Education Association to task for blocking education reform cites research by Education Policy Director Michael Van Beek that shows public school funding in Michigan is 16th highest in the nation, yet student performance “ranks between 33rd and 39th on national fourth- and eighth-grade reading and math scores.”
The American Legislative Exchange Council has just published a “State Legislators Guide to Repealing ObamaCare.” However, the 15-point summary prepared by ALEC staff and posted below is a Mackinac Center/MichCapCon.com online exclusive, because to our knowledge this bullet-point version not been published except in hard copy:
It appears that the political hype surrounding alternative fuels is based more on wishful thinking than facts. RAND Corporation, a nonprofit research group, recently released a study that concludes alternative fuels do not benefit the military. As reported by The New York Times, the study resulted from a directive in the 2009 Defense Authorization Act calling for further study of alternative fuels in military vehicles and aircraft.
In today's lead editorial, The Wall Street Journal attributes America's lackluster economic recovery in part to the politically orchestrated misallocation of scarce resources, including subsidies for alternative energy. Says The Journal, “. . . if wind turbines are a good business, they will find a market on their own. If wind power turns out to be an uncompetitive bust, then the government will have misallocated hundreds of billions more dollars that could have found more productive uses.”
Mike LaFaive, director of the Morey Fiscal Policy Initiative, told The Saginaw News that President Obama’s State of the Union speech reminded him of Gov. Granholm.
“It was almost Granholm-esque in many parts,” LaFaive said. “I found that these investments in clean energy rang hollow to me.”
A scandal first exposed by the Mackinac Center last June has led to a second set of felony fraud charges filed by the state Attorney General, according to The Grand Rapids Press. The charges stem from an alleged conspiracy to obtain a state subsidy worth as much as $10 million through "false documentation" purporting to show a property transfer that constituted the basis for the subsidy claim. The transfer never actually occurred, however.
A friend of mine who works at a Kroger in metro Detroit passed along his thoughts on the "Item Pricing" law, and I figure they're worth sharing:
Snyder's right. It's a waste of time for us and basically a game for customers to "Item Price" us. The Item Pricing Law gives folks five times the difference if they are overcharged with a $5 maximum. Fortunately the game players are only allowed to do this with one item at a time, so if we're dealing with a lot of price changes this is the one break the store gets.
The first three weeks of Gov. Snyder’s administration has provided plenty to cheer, especially on fiscal policy issues.
Cheer No. 1: Candidate Snyder said more than once that the extraordinary cost of providing expensive and generous benefits to public employees would need to be reduced. He then repeated this as Governor-elect Snyder in a Washington Post article. In his first State of the State speech he courageously brought up the state’s massive unfunded post-retirement employee benefits liabilities and costs, which theoretically exceed $50 billion. Our new governor appears to be ready to address these fiscal policy problems openly and directly.
It is encouraging that members of the newly elected Michigan Legislature are taking action to thwart over-zealous environmental regulations that are killing jobs in Michigan. Rep. Greg MacMaster, R-Kewadin, has introduced House Bill 4044, which seeks to get a handle on the cost of environmental regulation in the state.
Today is the 5th anniversary of Gov. Jennifer Granholm’s promise that Michigan residents would be “blown away” by the gobs of jobs her latest economic development program would create. How ironic then that she of all people would flee the state to find work. She is certainly not the first governor to do so, but her failed promise of economic nirvana—timed to coincide after she had safely left office—is one that should not be forgotten by those left behind.
Since the onset of the Great Recession, nearly every state has experienced budget shortfalls. Most have recognized the need to cut spending and restrain government employee benefits rather than raise taxes. Not all do, however: As reported last week, Illinois is going the opposite direction with massive tax hikes on individuals and businesses.
One of the three limitations of government in Gov. Rick Snyder’s 2011 State of the State speech was a call to do away with Michigan’s Item Pricing Act, which Mackinac Center scholars suggested more than eight years ago.
Today kicks off National School Choice Week. Support for school choice comes from groups ranging across the entire political/ideological spectrum, and evidence from Michigan shows that parents strongly favor more learning options for their children. Favoring market-based policy, personal liberty and free association, the Mackinac Center has long been a supporter of educational freedom.
More than just the economy is responsible for declining union membership in Michigan, Labor Policy Director Paul Kersey told The Detroit News.
“This is a result not only of a recession that has hit unionized industries hard, but also of an erosion of confidence that workers in Michigan and throughout the country once had in unions,” Kersey said. “This is reflected in losses in members, in solid support for right-to-work (laws in the polls) and in increasing concern over government employee compensation.”
An Op-Ed in the Lansing State Journal by President Joseph Lehman and Assistant Editor Hannah Mead explains how Michigan could save $5.7 billion a year by brining public-sector benefits in line with the private sector.
More information on those numbers is available here and here.
Mike LaFaive, director of the Morey Fiscal Policy Initiative, told National Public Radio that Michigan’s film subsidy program is only a way for politicians to buy “good PR,” but the program is “symbolism over substance.”
Mackinac Center analysts have produced a large body of work examining the film subsidy program and its numerous flaws, which can be found here.
The House and Senate took no votes on legislation, so this report instead contains several newly introduced bills of interest, including ones to cut government employee pay, restrict government union use of public facilities, grant permits to new coal generating plants, ban "ergonomics" regulations, replace the MBT, authorize more special tax breaks, ban partial birth abortion and more.
The latest BLS figures on union membership came out today. For union officials and supporters, the results are grim.
During 2010, employment in Michigan actually ticked up slightly according to BLS, as the state added 21,000 jobs (not an especially impressive number, as there are 3.8 million jobs in the state), but unions in Michigan lost 83,000 members, a decline in membership of 11.7 percent.
Mackinac Center analyst Jack McHugh has called the long process of hollowing out a private economy to prop up an unsustainable government "Detroitification." Detroit's most recent comprehensive annual financial report shows just how much the title-city itself has been hollowed.
Late last month, while all reasonable people were engaged in some combination of recovering from Christmas, preparing for New Years, or watching football, the UAW released its "Principles for Fair Union Elections," a pretentious document that demonstrates the extent to which denial still reigns at Solidarity House.
