In 2015 I was graciously invited to testify before a Minnesota state committee on taxes regarding an automatic tax inflator for cigarettes. The invitation was a result of my decade long investigation — in partnership with professor and economist Todd Nesbit — of cigarette excise taxes and their impact on illicit activity, most notably tax evasion. I told the committee what it apparently did not want to hear: that their recent tax increase and associated tax inflator would lead to rampant smuggling.
Lawmakers agreed on July 12 to deliver $200 million of taxpayer dollars to businesses selected by politicians, an idea the governor is expected to sign into law. This gift is a waste of money. Ostensibly, it is to create jobs, but it won’t work and creates an unfair playing field.
The Legislature met for one day this week, for the purpose of authorizing a new round of state subsidies for certain corporations. The next session day is scheduled for Aug. 16.
Senate Bill 242, Authorize giving state revenue to a few particular corporations: Passed 71 to 35 in the House
Great power and funding entail great responsibility. This principle needs broader application to Michigan’s 56 intermediate school districts, which wield big budgets but tend to operate outside the limelight.
ISDs have grown responsible for a steadily larger share of the state’s public school finances, though most are run by boards that aren’t democratically elected. These education agencies combined spent more than $1.6 billion in 2015-16, nearly 10 percent of all K-12 current operating expenditures. Yet these agencies serve less than 1 percent of the state’s public school students directly.
State lawmakers are considering a new package of legislation that would provide fiscal favors to companies selected by Lansing bureaucrats for special treatment. Among the arguments made in favor of the program is that it is costless because without the incentive the jobs wouldn’t be created in the first place. In other words, it’s performance-based.
Gov. Rick Snyder is hoping that a package of corporate handout bills already passed by the state Senate (Senate Bills 242-244) will likewise be adopted by the House as early as next week. The proposal reads a lot like the old, failed Michigan Economic Growth Authority that cost taxpayers billions of dollars with little to show, at the expense of perhaps more wisely funded programs.
By Jason Hayes
After President Trump’s decision in June to withdraw the United States from the Paris climate agreement, various environmental groups, celebrities and politicians engaged in a string of hysterical condemnations. Former President Barack Obama characterized the decision as an “absence of American leadership,” while former Vice President Al Gore called it “reckless and indefensible.”
The people who live in the outer ring of Detroit suburbs, especially areas like Lapeer and northern St. Clair County, have the longest drives to work in Michigan.
The Grand Rapids area does not see as long of commutes on average, though there are some areas in Newaygo County where people make longer commutes.
Dr. William Wilson, former senior policy analyst with the Mackinac Center for Public Policy, died last April of cardiac arrest, according to his official obituary. He was 54. Bill Wilson was a longtime friend to the Mackinac Center, a talented scholar and economist and recipient of the Mackinac Center’s Lives, Fortunes and Sacred Honor Award.
Less than five years after Gov. Rick Snyder and the Legislature pulled the plug on the state’s Michigan Economic Growth Authority corporate handout program, many Lansing politicians are eager to increase the size and number of favors they can provide.
By Jack McHugh
Note: The House and Senate are adjourned until July 12 (at the earliest). There will be no Roll Call Report next week (July 7).The Roll Call Report will resume July 14.
House Bill 4759, Sell Senate's former office building in Lansing: Passed 26 to 9 in the Senate
“The models are used in ways that systematically exaggerate the public benefits of proposed government projects, thus biasing government decision making in the direction of excessive government spending and expansion into areas that should be left to the private sector.” – Edwin Mills, author of “The Misuse of Regional Economic Models.”
Last week, several areas in Mid-Michigan experienced heavy rains and near-record flood conditions. As the rain fell and water levels rose, basements began to fill with water and untreated sewage from the area’s overloaded sewer systems. Throughout the streets of Mid-Michigan towns, the impacts are clear. Sewage and water damaged carpet and furniture; boxes of ruined property are piled high on city streets, waiting for sanitation crews to pick them up.
Forty.
That is our count for the number of times a group of 14 lobbyists and a handful of Republican lawmakers referred to corporate welfare as a needed “tool” (or some variation thereof) at a state House Tax Policy committee hearing on June 14.
In this instance, corporate welfare means unelected bureaucrats at the Michigan Strategic Fund or Michigan Economic Development Corporation picking and choosing select large companies with at least 250 new employees to bestow up to $200 million in tax incentives over the next decade — foregoing revenue that would otherwise go to state government.
(Editor’s Note: The following is a modified version of a presentation given by James Hohman, assistant director of fiscal policy, as part of a debate hosted by the Midland Chamber of Commerce on June 19, 2017.)
So there are some things that I think the [Michigan Municipal League] and I are going to agree on. For instance, that unfunded liabilities for pension benefits and retiree health care are a huge cost driver for local governments. But we are not here to talk about the things we agree on but instead the things that we disagree on. So I am going to talk about our remarkably robust municipal finance system, while I assume that Anthony [Minghine] is going to talk about the broken municipal finance system.
By Kahryn Riley
The federal justice department has launched a new Public Safety Partnership that aims to help 12 U.S. cities, including Lansing, Mich., with what Attorney General Jeff Sessions calls “their serious violent crime problems.”
Sessions announced the program on Tuesday, June 20, at a criminal justice summit in Washington, D.C. He cited a “staggering” increase in the national violent crime rate and touted the PSP as fulfilling President Trump’s promise to “make America safe again.” The program will make additional federal resources available to help cities fight violence. A U.S. Department of Justice spokesman explained that to be considered for inclusion in the program a city “must have levels of violence that far exceed that national average.”
Michigan would join the vast majority of states in freeing prospective painters from needless government licensing requirements and fees if it passes proposed changes. That’s a good move, and would be another step towards right-sizing regulations.
The state requires anyone who wants to earn a living as a painter to complete 60 hours of courses, pay nearly $300 in fees and pass an exam. The would-be painter must be at least 18 years old — meaning two high schoolers can’t legally team up to paint barns for the summer.
By Jack McHugh
House Bill 4323, State budget for fiscal year that starts Oct. 1 2017: Passed 26 to 11 in the Senate
The non-education portion of the state government budget for the fiscal year that begins on Oct. 1, 2017. This would appropriate $39.9 billion, compared to $38.7 billion authorized the year before. Of this, $21.2 billion is federal money. When combined with the education budget (next bill), the state will spend $56.5 billion next year, vs. $54.9 billion last year, or a 2.9 percent increase.
By Ben DeGrow
As the Detroit Free Press tells it, Michigan should be concerned about a new study that finds for-profit charter operators get worse results than their nonprofit counterparts. But an in-depth analysis of the data used for the study actually shows most Michigan for-profit operators doing significantly better than average.
On May 13th, children from around metro Detroit gathered at the Detroit Historical Museum for the second annual Detroit Children’s Business Fair.
The event, hosted by the Mackinac Center for Public Policy and Junior Achievement of Southeastern Michigan, allowed children to sell goods to customers for real money. Testing their hand at being an entrepreneur, kids could win prizes for creativity, originality and business potential, and to get advice from a panel of expert judges on ways they might improve.
The following is testimony prepared for the Michigan Travel Commission at its June 22 meeting in Muskegon, Michigan. The Commission is charged with the mandate to “promote, maintain and develop the orderly growth of the Michigan travel industry” and is required to take testimony regarding policy adoption or adaption “from a broad cross section of travel interests.”
Traverse City is exploring investments in public broadband internet. Past experience teaches us that it should be very cautious about doing so.
Initially, a public entity was reportedly thinking about building a fiber internet line and becoming an internet service provider. The chairman of Traverse City Light & Power says the organization is still in the process of making that decision. New evidence suggest there are many ways for these types of deals to go wrong.
By Jack McHugh
House Bill 4647, Overhaul school employee retirement system: Passed 55 to 52 in the House
To replace the current school pension system with one that requires more cost-sharing by new employees, and contains provisions intended to limit state management practices responsible for the $29.1 billion of unfunded liabilities in the status quo system. New employees could choose instead to receive substantial employer contributions to 401(k) accounts. If the overhauled defined benefit component is not properly funded then enrollees would have to pay half the cost of correcting this, and if underfunding exceeds specified levels this option would be closed to new hires.
By Ben DeGrow
New Detroit Public Schools Community District Superintendent Nikolai Vitti has said he wants to pursue a “student-first state and local policy agenda” for the troubled district. Renegotiating the teachers union contract gives him an early opportunity to work toward a truly student-first agenda.
"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master—that's all."
