Michigan leaders who are enamored with building new light-rail passenger lines should look to Greece's experience with its railway system. The New York Times reports that Greece's Hellenic Railways is bleeding red ink at a rate of $3.8 million per day. The total debt of the Greek railway system has increased to $13 billion, or roughly 5 percent of Greece's gross domestic product. Greek government officials who are interested in selling a stake in the state railway system may have difficulty finding a buyer — the Greek rail system pays three times as much for interest payments on its debt as it takes in on revenues.
Michigan has lost forever the contributions of a stalwart freedom fighter: Chetly Zarko was found dead this morning at the age of 39. Reportedly, he slipped away while reading, sitting in a chair in his apartment.
Requieset in Pace.
Chet's greatest passion was defending the people's right to know through the state Freedom of Information Act. The University of Michigan's bureaucracy was one early target of his dogged pursuit of the truth.
Last spring, the Legislature adopted a largely-gutted version of a modest school employee pension reform proposed by Gov. Jennifer Granholm in January. One of its features is what the governor and her speechwriters labeled a "hybrid" retirement plan for newly hired teachers, one that supposedly falls midway between a traditional "defined-benefit" pension and the modern "defined-contribution" or 401(k)-type plans.
The work of Mackinac Center analysts has provided information to challenge conventional wisdom on several points, and Michigan newspapers have taken note.
The Grand Rapids Press picked up on Michael Van Beek's work taking down the claim that public schools are underfunded, part of Van Beek's "Debunking School Funding Myths" series. The Press article quotes Van Beek saying "The real reason for school money troubles is not 'underfunding,' but a failure to contain employee costs that comprise about 80 percent of operational budgets."
Media outlets across the state are highlighting the debate about job-creation policies. Mackinac Center Fiscal Policy Director Michael LaFaive has long argued that tax incentives and subsidies are not the path to improving Michigan's economy.
The Grand Rapids Press is hosting a live chat about tax incentives at 12:30 today. For the chat, LaFaive will join Brigit Klohs, president of an economic development agency. Listen in and ask your own questions here.
(Cross-posted from The Michigan View)
On Monday, Rush Limbaugh dedicated a substantial portion of his show to an incredible article by Angelo M. Codevilla in the current American Spectator: America's Ruling Class — And the Perils of Revolution. (Here's the text of Limbaugh's monologue.)
With the appointment of an interim Senator in West Virginia, Democrats in Washington are pushing through an extension on unemployment benefits. Under current law, benefits run out after 99 weeks (up from a previous record high of 65 weeks in 1975).
There's valid argument that a compassionate society with a dynamic economy should provide unemployment benefits, and a legitimate debate regarding how much and how long. But recently, some have gone beyond this and argued not only that these benefits are necessary, but that they actually stimulate the economy.
Yesterday, President Barack Obama and Gov. Jennifer Granholm came to Holland bearing gifts: cash subsidies for an electric car battery plant owned by the Korean firm LG Chem. The federal contribution is $151 million in "stimulus" money, and Michigan taxpayers are kicking in another $100 million in cash (plus more later). Of course the real gift-givers are taxpayers, who are all but buying the plant for the company, given that its construction is expected to cost between $244 million and $303 million.
Every week, MichiganVotes.org sends a report to newspapers and TV stations showing how just the state legislators in each publication's service area voted on the most important and interesting bills and amendments of the past seven days. The legislature did not meet this week, so instead of votes this report contains eight newly introduced bills of interest:
Centrally planned jobs with a "green" focus are not the way to boost the economy in Michigan or nationwide, a Mackinac Center analyst told The Daily Caller, a Washington, D.C.-based political news website.
"There's no evidence that electric cars are the future; the market will sort that out," Jack McHugh, senior legislative analyst, told The Daily Caller for a story about President Obama's appearance in Michigan Thursday to promote an electric car battery maker that received $151 million in subsidies.
By Jack McHugh
The operators of another Michigan electric car battery plant, A123 Systems, will receive a $100 million cash subsidy from the state for a 75-acre facility the company has leased in Romulus. The subsidy will be in the form of cash because the plant has been granted "renaissance zone" status by the Michigan Economic Development Corp.
It must be acknowledged that there is more than a whiff of political calculation in Mike Bouchard’s embrace of right-to-work. The Oakland County sheriff and GOP gubernatorial contender trails in most of the independent polls. Embracing RTW gives him a way to distinguish himself from the rest of the field and generate enthusiasm among grass-roots conservative leaders and tea party activists who are paying closer and closer attention to the role that unions have played in Michigan’s economic struggles. Polls have consistently shown that a majority of Michigan voters support right-to-work in principle (that includes union households — check out question 20 here) and most of his primary competitors have at least left the door open for RTW as well. So why not embrace a potentially winning issue and see if you can ride it into the governor’s mansion?
The Obama administration has issued another moratorium on deepwater drilling for oil in the Gulf. The administration's initial temporary ban was struck down previously by federal courts. The ban on drilling in the Gulf has much in common with the ban on directional drilling for oil and gas under the Great Lakes imposed by the Michigan Legislature - both are knee-jerk reactions that are short on science and technical merit and long on political posturing. There have been thousands of wells drilled safely in the Gulf and eight wells directionally drilled under the Great Lakes without incident.
The Chinese market for Michigan goods continues to grow. So it's strange that politicians here continue to point fingers at Chinese trade for Michigan's economic decay.
Since 2005, Michigan's exports to China increased by 91 percent, while Michigan's exports to the world dropped by 14 percent, largely due to a substantial decrease in 2009.
The city of Detroit is slowly moving toward adopting a recommendation Center analysts made more than eight years ago.
The Detroit News reports that Detroit Mayor Dave Bing is proposing that the city buy electricity from DTE Energy. The $150 million contract is projected to save the city $3 million annually.
One thing my years as a government regulator taught me is that business hates uncertainty. Regulatory uncertainty is a major barrier to job creation in this state. Companies are reluctant to invest in new or expanded operations in Michigan unless they have a reasonable expectation that if they meet the necessary environmental requirements they will receive a permit in a timely manner.
Every week, MichiganVotes.org sends a report to newspapers and TV stations showing how just the state legislators in each publication's service area voted on the most important and interesting bills and amendments of the past seven days. The version shown here instead contains a link to the complete roll call tally in either the House or Senate. To find out who your state senator is and how to contact him or her go here; for state representatives go here.
Since the beginning of the national recession in December 2007, Michigan's private sector has lost 70 times more jobs than its government sector.
Specifically, there are now 388,100 fewer Michigan's private sector payroll jobs as measured by the Bureau of Labor Statistics, while government payrolls (which include federal, state, municipal and school employees) are down by just 5,400 jobs.
The cost of the Michigan film subsidy program continues to be ignored, according to a Mackinac Center fiscal analyst.
"The first lesson you learn in economics 101 class is at what cost," Mike LaFaive, director of the Morey Fiscal Policy Initiative, told The Detroit News.
Michigan taxpayers can breathe a sigh of relief: The Detroit Free Press reports that Gov. Jennifer Granholm has abandoned hope that her service tax will become law. At a news conference on an unrelated issue, the Governor stated that she did not expect the Legislature to enact her plan.
The U.S. Environmental Protection Agency has announced it is drastically lowering the standard for sulfur dioxide under the Clean Air Act.
SO2 emissions come primarily from coal-fired power plants and are a primary cause of acid rain. The current standard for SO2 of 140 parts per billion averaged over 24 hours will be lowered to 75 parts per billion measured hourly (one part per billion is equivalent to one second during 33 years). The EPA claims the new standard will prevent 54,000 asthma attacks per year. Cost estimates for utilities to comply with the new standard range from $1.5 billion to $3 billion, which will result in higher energy bills for households and businesses.
About 75 percent of the Wayne-Westland Community School's $111 million budget goes towards paying employees covered by its current collective bargaining agreement for teachers and a few other employee groups. (The budget figure does not include debt service payments on past construction projects.) Wayne-Westland Community Schools enrolls about 13,100 students and employs approximately 830 teachers.
The Wall Street Journal highlights "do-it-yourselfers" in Detroit, who are volunteering their time and effort to keep their neighborhoods beautiful. The city cannot afford the resources to maintain public services in all areas, according to the article. To fill the void, individuals are stepping up to maintain parks and sidewalks.
In a Holland Sentinel article last week, I said the following about the Michigan Lottery giving $40,000 to Grand Rapids for a fireworks display: "This expenditure is motivated by politics, not maximizing lottery sales." Given the context of the article, I appeared to be referring to the personal motivations of a particular individual, the Lottery director. That was wrong, and I apologize for the remark.
The U.S. Census Bureau recently released state and local government quarterly tax information that shows Michigan's tax revenue continues to outperform the rest of the state economy. Policymakers should keep these figures in mind as Lansing cries poverty over this year's budget.
