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.
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.
Gov. Jennifer Granholm cried poverty yesterday, claiming that her administration already cut 11,000 state employees and that the state cannot make further cuts without lowering "critical services that struggling families count on to survive in this tough economy."
Attorney General Mike Cox's office knew about concerns regarding the Hangar42 film studio as early as February, according to a story in today's Grand Rapids Press. Cox, however, did not officially announce an investigation of the film subsidy deal until a day after being called on to do so by Mackinac Center Legal Foundation Director Patrick J. Wright.
The local teachers union in the Ann Arbor Public Schools just ratified a new contract that saves the district $4.3 million in the 2010-2011 school year. According to AnnArbor.com, the union president said his members wanted to do their part to close a $20 million gap between district revenue and projected costs of $183 million.
It would seem that there is no bad legislative idea that cannot be sold by giving it an idealistic title or a clever acronym. Apparently you get bonus points for both, hence the Democracy is Strengthened by Casting Light On Spending in Elections Act, or DISCLOSE for short (Get it?). Aside from the self-righteous title, DISCLOSE is a one-sided campaign law that casts blazing light on some groups while leaving unions to do their political activism in the shadows.
The Gulf oil spill tragedy has focused the nation's attention on a regulatory system that has failed in preventing an environmental disaster. The typical response from politicians and government officials to regulatory failures is to demand more regulations — a solution likely to fail. New and more complex regulations will not prevent future environmental disasters because they are practically impossible to enforce.
Last week the the Michigan Economic Development Corp. upped the ante on a $100 million "refundable" business tax credit approved by the state House and Senate for a subsidiary of the South Korean battery maker LG Chem. The MEDC in effect converted the credit into an outright cash subsidy from Michigan taxpayers by granting the firm's 120-acre plant site in Holland "renaissance zone" status for 15 years.
The amount of state resources consumed by and the political leverage of public-sector employees were the focus of two Op-Eds by Mackinac Center analysts in The Oakland Press recently.
Paul Kersey, director of labor policy for the Mackinac Center, wrote about how public-sector unions are gaining membership and spending more money on politics while private-sector unions decline, while James Hohman, fiscal policy analyst, wrote about "unsustainable" levels of state government employee compensation.
The (Adrian) Daily Telegram reports that custodians and maintenance workers in the Adrian school district are switching to a high-deductible health plan with a health savings account. The Blissfield, Madison and Onsted districts already provide these types of plans to some employees, as does Northwest Community Schools near Jackson.
A Grand Rapids Press columnist said Sunday that those who support film subsidies in Michigan should embrace scrutiny of the program.
Nancy Crawley pointed to the questions surrounding film studio Hangar42, which came to light after Mackinac Center analysts were the first to publicly raise following a months-long investigation.
