Michigan legislators who might consider borrowing billions to prop up government employee pension and post-retirement health care benefits should first look at recent developments in California. That state's massive state pension system, CalPERS, may lower its expectations for investment returns. According to the Wall Street Journal, it is considering a drop in its return expectations from 7.75 percent to as low as 5 or 6 percent.
Seriously, maybe we should just turn the state over to the Michigan Education Association, given that they are so much more brilliant than our elected officials in Lansing. Consider the following two stories, both connected to the Race to the Top legislation that is starting to look like something of a fiasco for everyone who isn’t an MEA lobbyist.
The League of Women Voters put out a press release on March 8, 2010, touting its plan to bring almost 100 "Sisters on the Planet" ambassadors to Washington to lobby Congress on the need to pass cap-and-trade legislation. Even proponents of this legislation widely acknowledge that it will drive up the cost of electricity. The League's press release states, "Women around the world are disproportionately affected by climate change." They would have it right if their statement read: Women around the world are disproportionately affected by climate change policy.
Mackinac Center Legal Foundation Director Patrick J. Wright will testify today before the Senate Families and Human Services Committee on proposed legislation to end the forced unionization of home-based day care owners and prohibit any stealth attempts to unionize contractors involved in home health care services. The committee will consider Senate Bills 1173, 1178 and 1179 at 2:30 p.m. in Room 210 of the Farnum Building.
Arguing against a 3 percent pay hike for state employees is actually an argument in support of saving their jobs, according to an Op-Ed in The Michigan Daily.
The commentary cites a recent blog post by Paul Kersey, director of labor policy, which explained that compensation increases for state employees outpaced that of the private sector by one-third between 2002 and 2008. The author explains that rejecting this newest salary bump can save state workers' jobs. As an example he uses the 100 state troopers who were laid off last year after their union rejected a request from Gov. Jennifer Granholm for unpaid leave.
The Michigan Education Association is taking heat even from some of its friends in the media because of the state's failure to qualify for $400 million in competitive "Race to the Top" federal grants. To be eligible, Michigan had to enact a slate of education reforms including expanding the number of charter schools, creating a more rigorous "failed school" takeover process, establishing "merit pay," increasing performance accountability for teachers, and more.
Between now and April 10, the Legislature has the ability to cancel a scheduled 3 percent across-the-board pay raise for unionized government employees.
It has been argued that government employees have already made concessions. But the bottom line is that state employees are still doing pretty well. According to the Bureau of Labor Statistics, the average wage in Michigan (not corrected for inflation) increased by 14.9 percent between 2002 and 2008. But for state employees, the average wage calculated by the Civil Service Commission increased by 21.9 percent. Wages for state employees have gone up half again as fast as they did for workers throughout the state. Certainly they can afford to go without an across-the-board raise this year.
In explaining his refusal to vote on a resolution that would cancel a 3 percent raise for state employees, State Sen. Bruce Patterson, R-Canton, cited the opinion of the state’s budget director that such an action would constitute an “unfair labor practice.”
The Congressional Budget Office today said a proposal by the Obama administration to levy a "tax" on banks would ultimately be "borne to varying degrees by an institution's customers, employees, and investors," according to ABC News.
David Littmann, the Center's senior economist, explained why the idea was faulty way back in January.
An editorial in today's Midland Daily News says a study about the failures of the Michigan Economic Development Corp. should be "required reading" for legislators.
The study authored by Mike LaFaive, fiscal policy director, and James Hohman, fiscal policy analyst, details the history of the MEDC and uncovers that its subsidies, tax credits and other corporate favors results in less than one-third of the jobs it claims to create.
Since December members of the Legislature have proposed 13 amendments to the Michigan Constitution. To become law these must garner a two-thirds vote in both the House and Senate, and then be approved by voters at the next general election.
These "joint resolutions" can be categorized in several ways. Some are serious in that they represent a real or plausible consensus on important matters of principle or policy. Some are sincere but not "serious," in that they reflect a strong belief of the sponsor but have no chance of passage.
Energy studies out of Spain and Denmark have shown that wind energy is a net jobs loser. These studies cast serious doubt regarding the optimistic claims of wind energy advocates that windmills will help drive the green energy revolution in America by creating jobs and leading us once again into economic prosperity. The energy studies coming out of Europe have also proven to be a serious embarrassment to politicians like President Barack Obama and Gov. Jennifer Granholm, who have made wind and other alternative energy the central tenant of the national and state energy policy. Apparently the U.S. Department of Energy is being used to try and refute these studies.
Nearly every single aspect of a teacher's job falls under the rules of a union contract. The following is a synopsis of just one of those agreements in Michigan. It comes from Walled Lake Consolidated Schools.
The main source of teacher compensation is the single salary schedule, which pays teachers based only on their years of experience and college degree. Walled Lake's pay scale has 25 automatic 2-to-3 percent annual pay increases. The average teacher salary is $74,105.
The average salary of the 346 employees of the Michigan Education Association increased 19 percent - to more than $89,000 each - since 2005, according to the Lansing State Journal. Union President Iris Salters was paid $239,000 in 2009, the State Journal reported, which is more than four times the average pay of the classroom teachers the MEA represents. Salters received a 15 percent pay increase over the previous year.
Northville Public Schools removed a press release from its district Web site announcing that a school board member was running for the Michigan House of Representatives after being contacted by Tom Gantert, senior correspondent for Michigan Capitol Confidential, according to Hometown Life, part of the Observer & Eccentric newspaper chain in metro Detroit.
According to the state constitution, once the Legislature is formally notified of government employee pay raises, it has 60 days to rescind them. That means that the Legislature has until April 10, 37 days from today, in which to cancel out pay increases of 3 percent that the state has negotiated with unions representing its employees.
Daniel Henninger highlighted recently in The Wall Street Journal a book titled "The Myth of the Robber Barons: A New Look at the Rise of Big Business in America," written in 1991 by Dr. Burton Folsom Jr., senior fellow in economic education for the Mackinac Center.
Two votes in the state Senate on Wednesday may cause residents to question how seriously lawmakers are treating the need to restrain government spending. The first vote was on a resolution rejecting a 3 percent pay hike for unionized state government employees. The total cost of the raise is $77 million. To be fair, a majority of Senators did vote to reject the pay hike, but not enough to attain the two-thirds supermajority required on such measures. (See previous post on this site.)
Excerpts from Senate Concurrent Resolution No. 35, which would have rejected a 3 percent pay hike for unionized state government employees for the fiscal year beginning Oct. 1, 2010:
Whereas, The additional cost of these state employee contractual increases to the fiscal year 2010-2011 budget is estimated to be $77.3 million; and
One hates to argue with such a trusted and beloved figure as Kermit the Frog, but nowadays it’s easy to be green — if anything it’s too easy. Witness Ron Gettelfinger’s half-baked argument for green automobile jobs in today’s Detroit News.
The UAW chief tells us that there are 190,000 new automotive-sector jobs about to be created, and we can have them all right here if Republicans and Democrats do…something. What exactly Gettelfinger hopes they will do isn’t spelled out or even hinted at but it probably involves gobs of taxpayer money. That’s a favorite tactic of salesmen who are tasked with moving an expensive product of dubious value: wait as long as possible to mention a price tag.
The forced unionization of home-based day care owners, which the Mackinac Center Legal Foundation is fighting against in Michigan, is spreading to other states.
Michael Jahr, senior director of communications at the Center, told The Daily-Record of Wooster, Ohio, "It appears to be little more than just an effort to refill the ranks of unions that have seen a depletion of members over the years."
The second annual report from the Michigan Film Office shows that $69 million was transferred from Michigan taxpayers to movie makers in 2009, but is sketchy on further details, according to the Livingston Daily Press & Argus.
The report mostly promotes the film office and "doesn't sufficiently account for taxpayer dollars," Mike LaFaive, director of the Center's Morey Fiscal Policy Initiative, told the Livingston Daily.
Another nationally syndicated columnist has written about the Mackinac Center Legal Foundation's fight to end the forced unionization of small business owners.
Marybeth Hicks, writing in The Washington Times and at Townhall.com, details the state of Michigan's shell game that forced some 40,000 home-based day care owners into a union, and the millions of dollars in "union dues" that are now being taken from those owners.
Everyone can agree that Michigan's roads are in need of repair. How to pay for it, however, is another issue.
"We're enthusiastic fans for sound infrastructure, provided it's done cost-effectively," Mike LaFaive, director of the Center's Morey Fiscal Policy Initiative, told The Grand Rapids Press. LaFaive also told The Kalamazoo Gazette that, "After a lost decade of economic growth, the people of Michigan would be willing to try almost anything to see the government improve service and save money, as long as it's done wisely."
Just when there was hope that Congress might actually be listening to the majority of Americans who do not want higher energy costs through federal cap-and-trade legislation, here comes another attempt by some in Congress to take more money from consumers and kill more American jobs.
