President Obama's call to provide tax relief for some, but not all, job providers was a "mixed bag," according to Michael LaFaive, director of the Mackinac Center's Morey Fiscal Policy Initiative. Obama talked during last night's State of the Union address about eliminating the capital gains tax on small businesses.
The American labor movement reached what may prove to be a critical milestone last year when government employees, for the first time ever, made up a majority of union members. According to the Bureau of Labor Statistics, a little more than 7.9 million government employees across the country were union members. Government employees now make up 51.4 percent of union membership, a sharp increase over the 48.7 percent of union members who were employed by government in 2008. The public-sector “takeover” of the union ranks is part of a long trend in which unionism has become more and more a feature of government. In 1983, the first year reliable numbers are available, only 27.9 percent of union members were in the public sector.
MIRS News reports that two Michigan legislators will introduce legislation to increase the state gas tax by 8 cents per gallon and the state diesel tax by 12 cents per gallon.
According to the American Petroleum Institute, Michigan now imposes the nation's 7th highest state tax on gasoline, and the 13th highest tax on diesel. This is because in addition to a 19-cent per gasoline tax and 15-cent per gallon diesel tax, the state levies the 6 percent sales tax on fuel, plus a 0.875-cent per gallon tax that was originally imposed to clean up leaking underground fuel tanks, but was diverted to displace general fund money in the Department of Environmental Quality budget in one of the Legislature's many "fund raids" in recent years.
Although public charter schools are required by law to admit all students who apply, a common criticism is that charters fail to enroll enough special education students. Statistics show that public charter schools have proportionately smaller special education enrollments than conventional public schools, but recent trends suggest the difference will continue to dwindle.
President Obama should make tax cuts a centerpiece in his State of the Union address tonight, according to a Detroit Free Press columnist, and Michael LaFaive, director of the Morey Fiscal Policy Center, agrees.
LaFaive told Stephen Henderson that the president should cut marginal tax rates, rather than offer rebates. Henderson also said Obama should "embrace health savings accounts," and allowing companies to sell health insurance across state lines, two ideas Center scholars have addressed in the past.
One of the new ideas to come out of Lansing is sure to make state government more expensive by increasing the cost of the state vehicle fleet. House Bill 5042 introduced by Rep. Alma Wheeler Smith, D-Salem, requires that all future new light trucks purchased by the state be alternative energy vehicles. Existing state owned trucks for the model year 2007 and newer are to be retrofitted to achieve greater fuel efficiency or converted to alternative fuels if it can be done cost effectively. In addition, the legislation requires that 50 percent or more of new vehicles purchased by the state for passenger transport be alternative fuel vehicles.
The Michigan House has passed legislation (House Bill 4075) to let local governments borrow to pay for retirement health insurance benefits that current and past officials have offered to local government employees. Senate Bill 927, sponsored by state Sen. Mark Jansen, R-Grand Rapids, would do the same, and the Senate Appropriations Committee has reported the bill to the GOP-controlled Senate with a recommendation that it pass.
David L. Littmann, the Center's senior economist, said a proposed new tax on banks could hamper their growth and reduce their willingness to loan money.
The tax of 0.15 percent on bank liabilities would be levied against banks with more than $50 billion in consolidated assets, according to an editorial in The Detroit News. Littmann told The News that banks just under that cap might be motivated to stay under the limit, which in turn means less money to loan.
Michigan's unemployment rate of 14.6 percent was the highest in the country, according to today's release from the U.S. Bureau of Labor Statistics. The next closest state was Nevada, which increased to 13.0 percent.
Michigan's rate actually decreased by 0.1 percentage points from November. But before calling the recession over in Michigan, the rate fell because there were fewer people looking for jobs, not because there were more people finding jobs. The BLS estimates that, when including marginally attached workers and people employed only part-time for economic reasons, Michigan's rate is above 20 percent.
Parents are demanding more public charter schools according an annual survey conducted by the Center for Education Reform. While demand grew by 21 percent over the last year, there aren't enough charters to meet demand, often due to legislatively imposed caps. For every public charter school in the country, there are 239 students denied the opportunity to attend.
Bradley Smith, a former Mackinac Center adjunct scholar and former chairman of the Federal Election Commission, weighs in on Thursday's Supreme Court ruling in Citizens United v. Federal Election Commission, which found that some parts of federal campaign finance laws violate First Amendment rights.
An editorial in today's Livingston Daily Press & Argus compares the forced unionization of home-based day care owners to "stealing candy from babies."
The Livingston Daily editorial board also says "The only ones who seem to get it" are the Mackinac Center Legal Foundation and "a handful of home day care providers."
A plan introduced yesterday by Senate Majority Leader Mike Bishop, R-Rochester, to reduce state spending by $2 billion and suspend collective bargaining for government employees could gain enough interest among voters due to Michigan's budget problems, according to Paul Kersey, the Center's director of labor policy.
Part of the new Michigan Senate Republicans' spending reform proposal would mandate public school districts to seek competitive bids for food, custodial and transportation services. The Mackinac Center surveys each district annually to see whether they contract out for these services. You can view the 2009 survey results here.
In response to Senate Majority Leader Mike Bishop's plan to, among other things, reduce public employee pay by 5 percent, the Michigan Education Association is repeating a claim they've made in the past. This time around, the MEA asserts that they've saved taxpayers $1 billion by accepting reduced compensation packages through their locally bargained contracts. The statistics tell a different story.
The Mackinac Center Legal Foundation yesterday filed a motion to reconsider with the Michigan Court of Appeals over that court's dismissal of the foundation's lawsuit against the Department of Human Services.
According to the Livingston Daily Press & Argus, the DHS claims people who own home-based day care businesses are "government employees because they care for children whose parents qualify for government assistance with day care."
Americans are optimistic by nature, at least until recently when they have become increasingly worried about the direction the country is headed and what that means for our children's future. Nowhere is our national optimism more apparent than in quest for perpetual motion through the electrification of the automobile. Quoting from an article that appeared in the Detroit Free Press: "[C]ompanies are searching for a billion-dollar breakthrough in battery design. General Dynamics is working on a zinc-air cell battery. Ford is actively interested in a sodium-sulfur cell. Gulton Industries and General Motors are tinkering with lithium — nickel and lithium — chlorine. Westinghouse is in the act. The Edison Electric Institute is all charged up. All the activity is bound to pay off probably within the next five years — in the production of an electric car that would meet minimum design requirements."
The Mackinac Center Legal Foundation continues its quest for answers in the day care scheme being perpetrated by the Michigan Department of Human Services and a so-called home child care union by filing a motion with the Court of Appeals to reconsider its curt dismissal of Dec. 30, 2009.
Two Mackinac Center scholars have been invited to participate in a "Great Lakes Bay Region Summit" to discuss public school funding in Michigan.
Michael Van Beek, director of education policy, has done extensive research on this issue and was invited to address the State Board of Education on the matter last week.
Michigan Secretary of State Terri Lynn Land is trying to make people "drive further and further, just to receive assistance," according to state Sen. Roger Kahn, R-Saginaw, who says his fellow Republican should focus her attention instead on "bringing services closer to the people." Kahn's criticisms were directed at the Dept. of State's ongoing Branch Office Modernization Program, which aims to save scarce taxpayer dollars by consolidating branches into fewer, but more technically-savvy and customer-friendly, locations. For Kahn's district, this means the loss of a branch in Frankenmuth and enhanced services at another in Saginaw — decision that Kahn calls "a mistake," but that Land's office defines as "fiscal responsibility."
Earlier today Michigan Senate Majority Leader Mike Bishop released a reform agenda on behalf of his caucus. The agenda, which is directed at state spending and the overall cost of government, makes some potentially important changes to government-employee compensation. Among them: a 5 percent across-the-board wage cut, a new requirement that public employees contribute 20 percent of the cost of health care and an expedited binding-arbitration rule for police and firefighters. In addition, the package sets limits on school districts noninstructional costs and encourages privatization, a proposal with serious implications for school employees. The agenda is available at the GOP Senate Caucus Web site.
Behold the Cadillac Tax, a shining example of interest-group horse-trading. As a means of funding the Obama administration’s health-care proposal, the Senate passed a tax on the most expensive private health-care plans. The tax of 40 percent on premiums of over $8,500 (or $23,000 for family plans) is technically supposed to be paid by health insurers themselves, but union officials, in a notable exercise of economic literacy, recognized that the costs would be passed on to consumers, and that many of their members, who have pretty generous health care plans of their own, would wind up indirectly paying the tax.
Lansing policymakers are discussing plans to shift taxes around and are being supported by some faulty observations. Some of them made their way into a column by Susan Demas in The Detroit News. She noted, "Michiganders have gone from paying 9.5 percent of their incomes in taxes in 1999 to 7 percent today."
Therapists are reporting an increase in green disputes between couples and family members, according to the Jan. 17 edition of The New York Times. Linda Buzzell, a family and marriage therapist, is quoted in the article: "The danger arises when one partner undergoes an environmental 'waking up' process way before the other, leaving a new values gap between them." For many, "being green" has become their religion of choice. One of the Webster Dictionary definitions of religion is: a cause, principle, or system of beliefs held to with ardor and faith. This reminds me of sage advice many of us received from our parents — to avoid conflict, do not discuss politics or religion with family, friends or strangers.
Detroit Mayor Dave Bing is going to crack down on the owners of homes the city has demolished, according to The Detroit News. The paper reports:
After years of failing even to send bills for costs, the city soon plans to begin filing suits against the owners of the 40 most expensive demolitions of the past six years. ...
