(Editor's note: The House Tax Committee and House New Economy and Quality of Life Committee will hold a joint session at 9 a.m. today in Room 352 of the State Capitol Building. This text was e-mailed to all members.)
Dear Joint House Committee Members:
At its monthly board meeting today, the Michigan Economic Growth Authority voted to give a state business tax credit worth $2 million over five years to the corporate subsidiary of the Service Employees International Union for an operation that will provide administrative services for the SEIU and other local unions. MEGA is considered the "flagship" of the state's growing empire of "economic development" programs and authorities.
Apparently in terms of federal stimulus money and thousands of new jobs allegedly created, the luckiest place to live in Michigan is in the 48933 zip code. According to the U.S. Postal Service Web site, 48933 is none other than Lansing, our state capital.
"Pirate Radio," in theaters now, is a silly and inconsequential movie that represents a missed opportunity to show the negative impacts of government overreaching into what should be a private enterprise. In this instance, British government bureaucrats stymie a broadcast outlet for rock music in the mid-1960s.
A pattern of sorts is starting to emerge: When one hears numbers of “jobs created or saved” by various government programs, it appears to be more and more likely that such numbers were pulled by someone out of the vicinity of his or her own back pocket. Consider:
My colleagues at Watchdog.org and its state-level affiliates were the first in the nation to break the story that the $787 billion federal stimulus package "has doubled the size of the House of Representatives, according to Recovery.gov, which says that funds were distributed to 440 congressional districts that do not exist."
John Hood at National Review Online yesterday called Michigan the "epicenter of the fiscal earthquake," referring to the overspending crisis created by Gov. Jennifer Granholm and the Legislature.
Hood said there are alternatives to using tax increases and more federal bailout money to solve Michigan's budget problems, and that Michael LaFaive, director of the Center's Morey Fiscal Policy Initiative, "has plenty of ideas." Hood also linked to LaFaive's bio, which gives access to every article, commentary and study LaFaive has authored during his time with the Center.
A Detroit Examiner columnist Friday cited Michael Van Beek, the Center's director of education policy, on Michigan's refusal to pursue school reforms that could help the state secure federal funding.
Van Beek detailed the situation here.
A Mackinac Center July Viewpoint was prescient, to say the least.
The piece, written by Oakland County Deputy Executive Robert Daddow, an adjunct scholar with the Center, was titled "A Perfect Storm: Batten Down the Hatches or Drown," and detailed the need for local governments to address falling property values, home foreclosures and property taxes when budgeting for the future.
Thursday's Wall Street Journal carried an article about Republican candidates for federal offices who are favored by establishment GOP power brokers, and how these candidates are suddenly finding themselves on the business end of the grassroots "Tea Party" opposition in many states. The article notes that this is creating heartburn for the National Republican Senatorial Campaign Committee because the GOP was behind finding these more establishment-minded politicians in the first place and now can't sell them to even the GOP primary voters.
A study co-authored almost a year ago by Michael D. LaFaive, director of the Morey Fiscal Policy Initiative at the Center, continues to garner media attention.
"Cigarette Taxes and Smuggling," released Dec. 2, 2008, and LaFaive were cited Friday in Chicago Talks and Saturday by NBC Chicago. Both media outlets addressed two major points in the study: higher cigarette taxes do not increase government revenue, and those higher taxes can also lead to more cigarette smuggling.
Although the fiscal 2010 Michigan budget requires no new taxes, Gov. Jennifer Granholm nevertheless has been trying to gin up support for a $600 million tax hike. This would be on top of the $1.4 billion tax hike she orchestrated in 2007, and would break a promise she made soon after that episode to never raise taxes again.
Jack McHugh spoke to members of the Association for Capital Growth in Farmington Hills this week, and the following is an edited excerpt from the text of that speech.
In too many categories, Michigan residents just pay too much for the government services we receive. We pay $5,447 more per prisoner than the average for other Midwest states. We pay teachers $5,713 more than the national average — and seventh most in the nation — even though this state has fallen to 37th place in personal income. Michigan state and local governments provide employee benefits whose cost exceeds private-sector averages by $5.7 billion.
New Hampshire's inspiring state motto is a tribute to individualism, but it shines a bit less brightly today after the state offered to guarantee part of a "loan" to an ailing newspaper. That's a mistake, and if residents of the "Live Free or Die" state have any doubt, they should look to the record of the Great Lakes state.
A recent Detroit Free Press editorial too easily dismisses Gov. Jennifer Granholm's now infamous 2006 quip, "you'll be blown away" ("Granholm an unfortunate victim of her own words," Nov. 11). They did so by truncating the full sentence and arguing that it was simply "delivered as an inspiration."
An Op-Ed by Russ Harding, senior environmental analyst for the Mackinac Center, appeared in today's Marquette Mining Journal, warning voters that a ballot proposal that appears to be about clean water is actually intended to stop mining.
Harding has addressed mining regulations in the past here and here, while MichiganScience explored the issue in-depth in this article.
The Detroit Free Press finds some very suspicious behavior on the Detroit pension boards: records destroyed, perks taken advantage of. One Detroit-area attorney wielded considerable clout in terms of how the boards functioned and was compensated handsomely for it — at one point earning $260,000 on a $1 investment.
The three dozen or so Michigan school districts affected by a line-item veto of so-called "section 20j" supplementary funding payments are clearly the biggest losers in this year's school budget battles. When combined with per-pupil foundation grant cuts affecting all districts, the funding loss for some of these districts exceeds $600 per student.
Susette Kelo stood resolute in fighting New London, Conn., politicians who were anxious to take her house to make way for grandiose development plans involving the pharmaceutical giant Pfizer. She fought all the way to the U.S. Supreme Court, where she lost a controversial split decision in 2005. Four years later, the formerly quiet and well-maintained Ft. Trumbull neighborhood that Kelo called home sits empty and neglected. And it will remain so for the foreseeable future after Pfizer recently announced it is abandoning New London, Conn., for nearby Groton, Conn., as part of a merger with drug maker Wyeth.
Aware of Americans' aversion to socialized medicine, Washington politicians have been carefully dishonest in describing health care reform as a boon to market competition and medical choice. Occasionally the facade drops, however, and the true nature of Washington's plan to nationalize health care is revealed. Rep. Barney Frank, D-Mass., for example, has been blunt that the public option is the best path to a single-payer system.
Since Proposal A of 1994, inflation-adjusted total revenue for public schools grew by 33 percent. What have we got for this investment? The chart below provides some answers.
This type of return on investments in public schools is hardly unique to Michigan. For federal results, click here.
Yesterday, I described an analysis performed by Mackinac Center scholars finding a correlation between public sector unionism, faster government spending growth and weaker state employment growth.
The history and actual mechanism that brought about these sad outcomes were detailed last month in a Weekly Standard piece by professors Fred Siegel and Dan DiSalvo called, "The New Tammany Hall: Public sector unions have become a labor aristocracy — and they are bankrupting states and municipalities."
Last August, the Mackinac Center released a study critical of the Michigan Economic Growth Authority. This was the second of two rigorous analyses of MEGA by the Center, and both found that — at best — the program has had no net positive job creation impact. Indeed, the latest results suggest that the program may actually destroy jobs. Not surprisingly MEGA apologists have bristled, and when compelled to respond, have done so with what could charitably be called a series of untruths about the program.
Politico's Ben Smith passed along the story about the $7 million fee the Michigan Department of State Police would charge to fulfill the Mackinac Center's Freedom of Information request.
Smith cited Mackinac Center Communications Specialist Kathy Hoekstra's Tuesday blog post about her efforts to get documents related to federal homeland security grants in Michigan. In Smith's words, "The topic [of homeland security grant spending] remains a fun one."
The new Pew Center on the States report mentioned elsewhere on this page echoes a claim frequently made by government spending interests seeking a tax increase here, that Michigan's tax system is "out of sync" with the current economy, and needs to be "restructured" in ways that ensure more steady (and larger) extraction of revenues.
