A weekend column in the Detroit Free Press covered the efforts of the Michigan Film Industry Association to reinstitute taxpayer subsidies for movie and other productions. The state wasted more than $400 million before pulling the plug on the last film incentive. Most scholarly research finds state economic development — or, specifically, corporate and industrial welfare incentives — to be ineffective and often very expensive.
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Michigan’s lawmakers are considering a bill to authorize $300 million more in economic development spending. The potential success of this spending relies on several assumptions. From what its supporters have claimed, here is the case for it:
There is good reason to question these assumptions. But there is a different way to think about this issue, and, believe it or not, it comes from an 1871 Michigan Supreme Court decision by Chief Justice Thomas Cooley about the corporate handouts of his day: railroad subsidies.
The Midwest Economic Policy Institute has been producing papers about prevailing wage in different states, primarily Midwestern ones. The conclusions seem cookie cutter: States that maintain prevailing wage laws should keep them. States that have repealed them have only harmed workers, government budgets and communities. All reports share at least co-authorship by Frank Manzo IV, the director of a different policy institute.
The state House Tax Committee recently heard testimony from the Michigan Economic Development Corporation. This was offered in response to a package of bills recently introduced to make the Michigan Strategic Fund and Michigan Economic Development Corporation more transparent and accountable to the public. These agencies oversee the state’s corporate handout programs.
The lowest funded of Michigan’s 15 public universities, Oakland University, is pushing a “Strive for 45” goal this year. The aim is for all universities to receive a minimum of $4,500 per student from taxpayers.
Michigan’s system of university appropriations is arbitrary and skewed where different schools get different levels of state support for no clear reason. There’s no formula to ensure that all public entities are treated equally, like there is for funding K-12 schools. It’s just the way things have always been done around here.
By Jack McHugh
Senate Resolution B: Deny Heartwell nomination to chair Natural Resources Commission: Passed 20 to 17 in the Senate
To disapprove the appointment by Gov. Gretchen Whitmer of former Grand Rapids mayor George Heartwell as chairman of Michigan Natural Resources Commission. This follows the reportedly related Feb. 13 denial of Anna Mitterling's appointment to this commission, which has "exclusive authority to regulate the taking of game and sportfish" and designating which species may or may not be hunted. Heartwell’s nomination is opposed by the National Rifle Association because of his role as a “state membership coordinator” of antigun groups organized by former New York City mayor and current Democratic presidential candidate Michael Bloomberg.
The Federal Labor Relations Authority recently entered a decision regarding the rights of federal employees, a change the Mackinac Center had called for in rulemaking comments. Details follow, but essentially the decision means that federal employees who are unionized may opt out of union membership at any time. This ruling matters because unions often erect bureaucratic barriers to trap workers into membership, barriers the Mackinac Center has repeatedly challenged in court and won.
This morning, Gov. Gretchen Whitmer issued a press release calling on the Michigan Legislature to delay implementing work and community engagement requirements for able-bodied adults receiving Medicaid benefits through the state’s Healthy Michigan program. Whitmer’s request comes on the heels of a ruling by the U.S. Court of Appeals for the District of Columbia. The decision upheld a lower court ruling, which struck down similar requirements in Arkansas and Kentucky. The lower circuit court said that the Centers for Medicaid and Medicare, or CMS, had not performed an adequate analysis of how the rules would affect coverage.
Are Michigan taxpayers undertaxed? The governor’s office seems to think so.
In a presentation to the Michigan Society of Association Executives, Michigan Deputy Treasurer Jeff Guilfoyle argued that Michigan taxes less than it used to. He pointed to the decrease in state taxes as a share of personal income, which is the state’s constitutional limit after voters approved the 1978 Headlee Amendment.
Some say the future belongs to the cities and states that can attract young people, especially those with college degrees. Talented young people, they argue, are the fountainheads of economic growth, and therefore, the places that will prosper in the future will attract them. But the theory doesn’t hold up when you consider data about where and when people migrate. Michigan lawmakers should resist the temptation to create policies intended to target this population.
By Jack McHugh
Senate Bill 432: Expand subsidies for certain research and development operations: Passed 38 to 0 in the Senate
To exempt from property taxes certain nonprofit operations that do product research and development for business and industry and also get certain state "economic development" subsidies and grants.
See Who Voted "Yes" and Who Voted "No"
Michigan Rep. Thomas Albert, R-Lowell, is imploring state administrators to use better assumptions when determining how much they are going to put into the school employee retirement system. The state owes the retirees and employees in the system a lot more than it has saved, and using better assumptions can help it pay down the debt faster.
Editor's Note: This article originally appeared in The Detroit News on Feb. 10, 2020.
While Michigan’s Democratic Gov. Gretchen Whitmer decided that she will borrow billions to repair roads, she still wants to raise taxes to pay down the debts and increase road spending. In this regard, she will remain at loggerheads with the Republican-controlled Legislature.
Two cities in one of the wealthiest areas in Michigan, which already has several competing providers offering high-speed internet access, are pushing to create a government-owned network. There is little upside to this idea and lots of downside.
Farmington and Farmington Hills are teaming up to create a joint municipal fiber optic network. Joe LaRussa, Farmington’s mayor pro tem, said their research found there wasn’t good internet infrastructure across the region. The plan, he added, is to build the network and lease it out to a variety of cable and internet companies.
By Ben DeGrow
Gov. Gretchen Whitmer clearly has made school systems a funding priority in her new budget proposal. It offers more money for one of the state’s most troubled districts, in a way that’s long on promoting more conversations and short on offering real solutions.
By Jack McHugh
Senate Resolution A: Oppose Heartwell's NRC nomination by defeating Mitterling's: Passed 20 to 16 in the Senate
To disapprove the appointment by Gov. Gretchen Whitmer of Anna Mitterling to the Michigan Natural Resources Commission. Reportedly the real target of this action by the Senate Republican majority is Whitmer’s nomination of former Grand Rapids mayor George Heartwell to be the chair of this commission, which has "exclusive authority to regulate the taking of game and sportfish," and designates which species may or may not be hunted. Heartwell’s nomination is opposed by the National Rifle Association because of his role as a “state membership coordinator” of antigun groups organized by former New York City mayor and current Democratic presidential candidate Michael Bloomberg.
In 2015, legislators voted to increase the state’s homestead property tax credit, which would give some homeowners around $206 million of their tax dollars back. A couple years later, Michigan lawmakers voted against lowering the state income tax rate, which would have amounted to taxpayers keeping $463 million and would have lowered the state budget by the same amount. While their different budgetary effects may have made the homestead property tax bill easier to pass, it may also be that broad tax cuts are just less popular than tax redistribution.
By Ben DeGrow
Less than two months after putting a prolonged budget debate to bed, Gov. Gretchen Whitmer has proposed a sizable school aid spending increase for next year. Once again, she seeks a large funding boost for preschool, but this time wants funds to create a separate, more restrictive program.
The budget proposed by Gov. Gretchen Whitmer is $61.9 billion, a record high for the state of Michigan. The state budget in the Great Lakes State has risen by nearly $15 billion in the past decade (or $11 billion when you don’t count federal funds). In percentage terms, that’s more than double the rate of inflation.
Michigan Education Association president Paula Herbart wrote an op-ed about what “Trump and DeVos” are “doing” to some public schools which will make them “suffer … even more.” It badly misses the mark, has a lot of factual errors, and by not putting things in proper context, gets a lot of things wrong.
By Jack McHugh
Governor Gretchen Whitmer yesterday released her proposed $61.9 billion state budget for Fiscal Year 2021. It calls for an increase in spending over 2020 for the state’s Pure Michigan tourism subsidy program and the line item that funds the Michigan Business Development Program. The former finances out-of-state advertising (among other items) to lure tourists to the Great Lake State. The latter is a corporate handout program that gives cash grants and loans chosen by state bureaucrats.
By Ben DeGrow
Gov. Whitmer intends to weaken a 2016 law that could hold back thousands of third-graders with serious reading struggles. This ignores a promising approach to getting these students the resources they need that doesn’t rely on socially promoting kids who can’t read. State leaders should stick with the law, while also focusing on another major piece of the literacy puzzle: teacher preparation.
My wife and I are going out on a date tonight. Our three kids — ages seven, five and two — will be left at home behind in an unregulated facility (our house) and cared for by an unlicensed practitioner (a teenage babysitter).
Sound scary? Or just a normal part of life, where we make judgment calls like this every day?
Michigan House Republicans, especially House Speaker Lee Chatfield, want to spend more on road repair without raising taxes. And to do this, they want to direct the sales tax that gets levied on fuel to road repair. They argue that the money people pay at the pump should go to fix roads. Opponents argue that this will hurt public schools, the primary beneficiary of sales tax revenue. But reprioritizing this revenue doesn’t have to lead to reduced school spending.
