Gov. Rick Snyder’s first State of the State speech was a “mixed bag,” Fiscal Policy Director Mike LaFaive told The Kalamazoo Gazette. “Gov. Snyder hinted at some positive things, but didn’t go nearly far enough with specific, cost-saving ideas that Michigan desperately needs to right its economy.”
In a highly-anticipated State of the State address, new Gov. Rick Snyder touched lightly on the topic of government employee benefits. Early on the governor did call attention to $54 billion in unfunded pension and other benefit liabilities, but said nothing further on the topic, giving neither a target for how much these liabilities will be reduced nor laying out a general approach for getting these costs back under control. This came in the context of a speech that was vaguely corporatist in nature, with little in the way of strong pro-market material.
Although Gov. Rick Snyder drew applause when he announced an increased subsidy for the Pure Michigan advertising campaign during his State of the State speech Wednesday night, Fiscal Policy Director Mike LaFaive said the move concerns him, according to The Detroit News.
House Bill 4003 would prevent private employees from being forced into public-sector unions, according to the Livingston Daily Press & Argus.
The Mackinac Center Legal Foundation filed a lawsuit against the Michigan Department of Human Services on behalf of three home-based day care owners who were shanghaied into a government union because they receive subsidy checks from the state for providing services to low-income families.
The first bill introduced in the Michigan House this year would repeal the much-reviled Michigan Business Tax 22 percent “surcharge,” and the first Senate bill would repeal the MBT altogether. Gov. Rick Snyder has proposed replacing the tax with a 6 percent corporate income tax, a change that would mean a big net tax cut for job providers.
According to data released by the Michigan Office of Labor Market Information today, the state’s unemployment rate dropped by 0.7 percentage points from 12.4 percent in November 2010 to 11.7 percent in December 2010. This is a record for this data series that began in 1976.
(The following is an unpublished letter to the editor of The Grand Rapids Press regarding an excellent editorial on cost savings ideas for local government.)
Applause is in order for the Grand Rapids Press Jan. 5 editorial “How to save money for local governments,” which correctly concludes that removing barriers to freer association between local units of government can cut costs.
President Barack Obama in a recent Wall Street Journal Op-Ed extols the virtues of regulatory reform. He opines that: “Sometimes …..rules have gotten out of balance, placing unreasonable burdens on business — burdens that have stifled innovation and have had a chilling effect on growth and jobs.” The President signed an executive order that he says, “requires federal agencies protect our safety, health and environment while promoting economic growth.”
Gov. Rick Snyder tonight is expected to outline his agenda for dealing with a looming state and local financial crisis as part of his State of the State address. If Gov. Snyder were to ask me for my advice about what might be the most important speech he ever gives, it would be as follows:
Gov. Rick Snyder has said he admires the leadership model of former Gov. William Milliken. In his first State of the State address tonight, it will be interesting to see whether the new governor emulates the earlier one in the number of proposals to expand the scope of state government.
As significant and real reforms and spending cuts are being discussed in Lansing, it’s hard not to feel a touch of sympathy for the “constituent services” staffers employed by lawmakers, and even for some of their politician bosses. This was brought home to the Mackinac Center following the publication of a particular blog post last week, “Are Corrections Costs a Mystery?” The angry calls and letters it generated were not unlike those fielded by constituent services workers in Lansing.
Gov. Rick Snyder is expected to address regulatory reform in Wednesday night’s State of the State speech, according to The Detroit News.
“State-level regulatory reform may be the most important factor in reversing our job losses,” Russ Harding, senior environmental analyst, told The News.
An editorial in today’s Detroit News cites the Mackinac Center Legal Foundation’s work in attempting to expand the scope of public information.
The editorial agrees with MCLF Director Patrick Wright, who said the Michigan Supreme Court’s ruling late last year “cripples the state Freedom of Information Act and shields government officials who break the law from public scrutiny.”
A Detroit News editorial today refers to research by Mackinac Center analysts that show a major part of the large increases in public school funding over the last several decades are due to ever-increasing school employee benefits.
Education Policy Director Mike Van Beek explains that only five states spend more on teacher benefits than Michigan. Van Beek also has compiled a list of the most common school funding myths.
National and state media are reporting that a more responsible approach to public-sector benefits could help ease Michigan’s financial crunch.
The Chicago Tribune cites research by Mackinac Center analysts that show Michigan taxpayers could save some $6 billion in the next decade if state employees were enrolled in health savings accounts.
Related to “Obamacare’s Michigan Collaborators” posted here last week, Americans for Tax Reform has created a “Comprehensive List of Tax Hikes in Obamacare.” This adds another wrinkle to the “collaborate vs. resist” discussions state lawmakers are currently having.
A Wall Street Journal editorial cites research by Mackinac Center Education Policy Director Mike Van Beek that shows average teacher pay in Michigan from 2003 to 2009 was tops in the nation compared to relative state wealth.
You can read more about teacher salaries here, here and here.
The House and Senate met this week to elect officers and adopt rules, but took no votes on legislation. Because there were no votes, this report instead contains several newly introduced bills of interest.
House Joint Resolution C (Extend term limits)
Introduced by Rep. Sharon Tyler (R), to place before voters in the next general election a Constitutional amendment to revise the term limits on legislators. Currently, representatives may only serve three terms of two-years each, and senators may only serve two terms of four-years each. The bill would allow legislators to mix-and-match these House and Senate terms in any combination for a total of not more than 14 years in the legislature. The measure is cosponsored by Reps. Greg MacMaster, Peter MacGregor, Al Pscholka, Matt Lori, Kevin Cotter, Kenneth Kurtz, Mike Shirkey, Mike Callton, Ken Yonker, Gail Haines, Hugh D. Crawford, Kurt Damrow, and Wayne A. Schmidt, all Republicans. Referred to committee, no further action at this time.
Elections do have consequences. MIRS reports that Michigan House Democrats in their first press conference for the 96th Legislature called for the creation of clean coal-fired power plants as one of their top three priorities. House Minority Leader Richard Hammel and House Democrats should be applauded for breaking with former Gov. Jennifer Granholm and the environmental lobby, who have launched a war on energy by consistently opposing the use of coal to generate electricity. The Obama administration has initiated a series of Environmental Protection Agency rulemakings that will make coal-fired power plants much more expensive to operate, causing energy costs to increase for both businesses and consumers.
Business owners are cheering a proposal in Lansing to repeal and reform the Michigan Business Tax and the 22 percent surcharge that comes with it, according to WJRT-TV12 in Flint.
Mike LaFaive, director of the Morey Fiscal Policy, provides this analysis, which shows repealing the surcharge would create nearly 28,000 through 2016.
Lobbyists for deep-pocketed, politically well-connected health care interests are already pressing for Michigan to create an ObamaCare insurance “exchange.” In a recent Mackinac Center Op-Ed published by the Detroit Free Press, scholar John Graham explains why this is a bad idea:
Earlier this week, on its last day of session, a lame-duck Illinois Legislature passed a 67-percent income tax increase, along with large business and corporate tax hikes. The measure was approved by just a single vote, and was shrouded in backroom deals and payoffs to constituency groups across the board. The Chicago Tribune’s lead editorial the following day had a short headline: “Goodbye, Jobs.”
A Boston Globe columnist cites this blog post by Paul Kersey, director of labor policy, in discussing the pitfalls of binding arbitration for public-sector unions. As Kersey also notes, the issue is gaining attention from several governors.
Michigan voters in 1984 approved amending the state Constitution requiring that oil, gas and mineral lease and royalty payments be placed into a trust fund creating the Natural Resource Trust Fund. The legislature then passed Public Act 101 of 1985 to implement the new amendment.
The Bay City Times and The State News are both reporting that Michigan does not rank first in the country for outward migration for the first time since 2005.
The data put out by United Van Lines shows Michigan is now No. 2 nationally, with 62.5 percent of all moves made by the country involving outbound traffic. Mike LaFaive, director of the Morey Fiscal Policy, analyzes the UVL report here.
