The Legislature is on a summer campaign break with no sessions scheduled before the Aug. 7 primary election, except for one tentatively planned for July 25. Rather than votes this report contains some interesting or noteworthy recent bill introductions.
Editor’s note: This article first appeared in the Tuscola Advertiser on June 30, 2018
The state of Michigan operates corporate handout programs that are supposed to create jobs where officials think none or fewer might otherwise be created. One of those initiatives — the Michigan Business Development Program — has given a $500,000 subsidy to Dairy Farmers of America for its Cass City location. Another state agency and programs sweetened the deal with even more handouts and financial incentives, as did the local municipal government.
State politicians finalized the budget for next year, pledging to spend $57 billion, of which $23 billion comes from the federal government. Businesses that made special deals with the state, however, get favored treatment. They will collect $644 million from taxpayers in the upcoming year, and they didn’t even have to argue their case in the budget process.
Last week, the U.S Supreme Court gave freedom to millions of workers across the country with its ruling in Janus v. AFSCME. Government workers in 22 states are no longer forced to pay unions any types of fees as a condition of employment. The Mackinac Center’s amicus brief was cited in the decision.
By Ben DeGrow
Even as the state once again approves more dollars for Michigan schools, the notion that their funding has been cut remains a political fiction that just won’t go away. In the latest case, all three Democratic candidates for governor have based their education platforms on that claim, and all three are wrong.
Gov. Rick Snyder has signed his last budget (fiscal year 2019) into law, and it manages to cut more than $10 million, or 8.8 percent, of spending on two major subsidy areas of his own creation. Despite this reigning in of the state’s corporate and industrial handout complex, the state’s tourism promotion wing garnered an extra $1 million for a 2.9 percentage point increase.
Lawmakers approved a new budget containing $162 million in new business subsidies. Unfortunately, holding lawmakers accountable for these votes is difficult and they will not factor into our legislative scorecard on business subsidies.
That is because the votes are in a budget bill that includes the rest of state government spending, aside from funding for public schools, community colleges and higher education. The bill authorizes $39.9 billion in total spending, $20.8 billion of which comes from the federal government (which state residents contribute to in part, obviously). Thus, the $162 million is just a small part of a $39.9 billion budget bill and makes for a pretty lousy test of an individual lawmaker’s support for new business subsidies. This is why we excluded these types of votes from our business subsidy scorecard.
In a previous blog post, I have highlighted companies that received subsidies from the Michigan Business Development Program and then later filed for bankruptcy. The taxpayer dollars lost by state officials in those deals will likely never be paid back.
By Ben DeGrow
The Holland Sentinel recently broke the news that local officials are weighing a tax increase to bump up spending on many West Michigan schools. But a fuller perspective of financial facts and trends should give voters a reason to pause and consider whether more funding necessarily leads to student success before they adopt this approach.
The state’s Michigan Business Development Program, a creation of the Gov. Rick Snyder administration, was meant to replace the demonstrably failed Michigan Economic Growth Authority program and — presumably — have more success at creating jobs. The Legislature should shut down the MBDP in its entirety, but short of that, cut the program’s annual budget at least by the amount of taxpayer dollars it loses to bad decisions.
By Jack McHugh
Senate Bill 196, Authorize foster care scholarships tax checkoff: Passed 104 to 5 in the House
To allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund to provide college scholarships to children in foster care.
In 2013, just prior to filing for bankruptcy, the city of Detroit closed 900 businesses and had a goal of shutting down 20 per week through its “Operation Compliance” program.
The city has so many arbitrary and silly licensing requirements on the books, that it seemed that everyone was violating a rule or two, and subject to fines or shut downs. Officials claimed this was done to fight blight and crime, but also admitted getting extra revenue was a factor.
By Kahryn Riley
Fans of the board game Monopoly know that, if you land in jail, it’ll cost you $50 to get out. But it may surprise you to learn that real inmates in Michigan jails may also owe that much – and a lot more. County jails in our state are allowed to bill inmates nightly, and many do. But few recoup their costs by doing so, because criminal defendants are frequently indigent. While incarceration is an expensive prospect and inmates aren’t the most sympathetic of people, it’s unfair and unsustainable for counties to expect them to fund jails. Still, if it must be done, we should enact policies that reduce jail populations and give inmates better options for paying their debts.
In energy policy, you’re often asked to choose between a few bad options. If you address one problem, you can end up promoting something that’s at least as bad. That’s often because government has a habit of setting up regulations in a way that benefits friends and supporters in politically favored businesses. And of course, when other, competing businesses feel the pinch of those unfair regulatory practices, they push back. Instead of mediating between conflicting financial interests, government officials need to stop playing the crony capitalism game and recognize that, while their actions do help their friends and supporters, they harm consumers and the economy.
State programs to give particular companies taxpayer-funded business subsidies are often described by politicians in terms that make them sound like a deal-closer fund. These have been created by some states to enable their governor or other high-ranking officials to land a major employer shopping around for a place to locate a new factory or headquarters.
By Ben DeGrow
Last week, the campaign of Michigan Democratic gubernatorial candidate Gretchen Whitmer released an official policy document outlining her plans for the state's public schools. A close look at the document's misleading premises and the candidate's past voting record raises serious questions and concerns.
Legislators are considering whether to give more subsidies to select companies, and the proposals seem to be getting a favorable ear. A bill to subsidize developers to renovate historical property has been passed by the Senate. A bill to give an investment company $50 million of taxpayer support in the name of rural development has been introduced in the House.
By Jack McHugh
Legislative Initiative Petition 2, Repeal prevailing wage law: Passed 23 to 14 in the Senate
To repeal the state prevailing wage law, which prohibits awarding government contracts to contractors who submit the lowest bid unless the contractor pays wages based on union pay scales that local union officials represent as prevalent in a particular area. The voter-initiated legislation was placed before the legislature by petition, and does not require the Governor's approval to become law.
Gov. Rick Snyder’s Renew Michigan proposal would impose an annual $79 million tipping fee on the waste management industry, ostensibly to “reduce waste in Michigan landfills,” and take the place of the now-expired Clean Michigan Initiative bond. Created in 1998, the bond program borrowed $660 million to pay for environmental protection and cleanup work around the state. Two decades later, the funds are almost gone and the Senate has responded with bill SB943 to increase tipping fees. But, before lawmakers simply agree to spend more, they need to reassure taxpayers that the spending was effective in the first place. They need to answer the question, “Is it worthwhile to replace the Clean Michigan Initiative?”
By Jack McHugh
Michigan state Rep. Gary Glenn, R-Williams Township, has made himself a thorn in the side of the state’s regional electric utility monopolies. One reason is that Glenn supports letting Michiganders opt out of getting electricity from these utilities by choosing an alternative provider. He also has helped lead local campaigns against the industrial wind turbine farms that big utility companies profit from and are trying to expand.
Michigan lawmakers are looking to license naturopathic physicians — medical practitioners who aim to solve ailments holistically through self-healing or natural methods. While it is necessary for some medical providers to be licensed, there is no proven need for that in naturopathic physicians. It is also important to remember there are other factors outside of licensing requirements that would regulate naturopaths. Edward Timmons, director of the Knee Center for the Study of Occupational Regulation at Saint Francis University, and Jarrett Skorup, director of marketing and communications at the Mackinac Center, recently wrote about this in The Detroit News:
By Ben DeGrow
A new study suggests that Michigan's loss of Catholic schools may negatively affect students' opportunities to learn and demonstrate the important trait of self-control. Parents attracted to this benefit could find more support for their educational choices if a major constitutional obstacle, our state’s Blaine Amendment, were removed.
By Jack McHugh
Senate Bill 941, Spend $100 million on job training and preparation programs: Passed 30 to 2 in the Senate
To spend $100 million on government job and career training programs, scholarships, program grants and more, which would be labeled a “Marshall plan for talent.” Senate Bill 942 would authorize paying for this with money borrowed against revenues from a 1998 state tobacco lawsuit settlement.
The Michigan Department of Health and Human Services has proposed a policy that would severely limit people who have criminal backgrounds from working as Medicaid providers. It makes sense in many cases to impose restrictions, but blanket bans that are not narrowly tailored to protect consumers harm both ex-offenders and the economy.
Writing for MLive, Michigan Economic Center director John Austin argues for a number of policies that don’t work the way he says they will. Perhaps his most fundamental problem is his belief that getting more Michigan residents college degrees will improve state incomes. “Look at high income states in the nation — and the higher education attainment levels that drive that dynamic,” he writes.
