House Republicans have faced some unfair opposition to their plan to lower the state income tax, with assertions that the state budget can’t afford it. Yet the amount of state spending from state-levied taxes has grown $5.8 billion over the past six years.
The first legislative hearing on a labor reform idea first championed by the Mackinac Center will take place tomorrow, and Mackinac’s Director of Labor Policy F. Vincent Vernuccio will be there to testify.
Missouri’s House Committee on Economic Development, chaired by Holly Rehder, R-Sikeston, will consider a bill to bring the nation’s first Worker’s Choice law into being. The bill, introduced by Rep. Steve Helms, R-Springfield, would allow unionized employees to opt out of union contracts and represent themselves before their employers.
Editor’s note: A version of this appeared in the Detroit Free Press on Feb. 23, 2017 as a “letter to the editor.”
In his recent State of the City address, Detroit Mayor Mike Duggan worried about a lack of workers in Detroit and said he wants to launch jobs programs to connect people to work. But there is an easier way for the city to help people find employment: Get out of the way.
Editor's Note: A version of this article ran in The Detroit News on February 22, 2017.
Throughout 2015 and 2016, Michigan’s electric utility executives warned us that upcoming closures of coal-fired generation plants meant the state faced impending electricity shortfalls. This is mostly because coal plants are closing as a result of increasingly strict federal environmental regulations, like the Clean Power Plan.
By Jack McHugh
House Bill 4001, Cut state income tax rate by 0.2 percent: Failed 52 to 55 in the House
To cut the state income tax rate from the current 4.25 percent to 4.05 percent over two years. The tax could go down another .15 percent later but only if the state rainy day fund is allowed to exceed $1 billion. Twelve Republicans voted 'no' and one Democrat voted 'yes.'
By Ben DeGrow
Over seven years ago, Michigan passed a law calling for teachers to be paid based on performance. The law has been largely ignored, despite evidence that the old compensation system doesn’t work.
The traditional way of paying teachers according to seniority and academic credentials does not benefit student learning. Research has shown that having a teacher with a master’s degree offers a student no advantages. A Brookings Institution report calls it “one of the most consistent findings in education research.” Yet in Michigan, hundreds of millions of dollars go to funding these “master’s bumps” rather than recognizing teachers for merit.
One state may be getting wise to the fact that government-funded tourism promotion is a bad bet for taxpayers and do away with two state agencies tasked with economic development and tourism promotion.
Recently, Florida House’s Careers and Competition subcommittee voted in favor of a bill that would end Visit Florida and Enterprise Florida. Those government entities are similar to the Pure Michigan advertising campaign and the Michigan Economic Development Corporation, respectively.
Editor's Note: This piece was originally published by The Hill on February 22, 2017.
Taxes matter.
People change their behavior based on incentives and higher taxes create a strong motivation to find ways to avoid paying them. Just look at cigarettes.
While the goal of many who wish to raise taxes on cigarettes is noble — improving public health — new research confirms what decades of previous studies have shown: much of the decline in legal paid sales of cigarettes is due not to people kicking the habit, but to an increase in smuggling.
A former marketing boss for the Sunshine State’s tourism promotion bureau criticized our Feb. 7 op-ed in the Tampa Bay Times titled “Visit Florida not critical to state’s economy or tourism.” Our column was based on the Mackinac Center for Public Policy’s recent study of state-level tourism promotion that analyzed data from 48 states over 39 years.
While Michigan strongly protects people from eminent domain, there are still cases where governments violate the private property rights of citizens. A bill introduced in the House would provide remedies when the state goes too far.
While the practice of government taking private property for “public use” has been allowed since the founding of America, public entities started to expand their definition of the term toward the end of the 20th century. After the Kelo case, where a town took a woman's home to give to a private business for "economic development," citizens across the nation pushed back by passing dozens of constitutional amendments limiting the practice. Michigan passed its own amendment in 2006.
The Michigan House Republicans have released their action plan, which contains their goals for the legislative body for the next two years. Overall, it is very good, as most of the recommendations would lessen the scope and power of state government.
Below are some highlights from the plan, each followed by a commentary.
Some officials have argued lately that the state will see the benefits of new projects — which they label “transformational” — only if taxpayers hand out more in subsidies through measures such as Senate Bill 111 and its companions. But plenty of development is built without direct taxpayer support.
The Michigan Senate has advanced legislation that amounts to handing taxpayer cash over to well-connected developers. According to the nonpartisan Senate Fiscal Agency, the bills would transfer up to $1.8 billion from regular taxpayers to these special interests over the next 20 years.
By Jack McHugh
No bills of general interest were voted on by the full House or Senate this week, which is not unusual for this point in a new legislature. Appropriations committee members have been receiving detailed briefings on a proposed budget for the fiscal year that begins Oct. 1.
Editor's Note: This piece was originally published by The Hill on February 7, 2017.
Pam Harris, an Illinois mom who made history as the lead plaintiff in a landmark U.S. Supreme Court case, has a simple message for President Donald Trump and Health and Human Services Secretary nominee Tom Price.
The state’s pension fund lost $10 million by investing in a private development deal in Ann Arbor. A diversified pension system ought to make room for some risky investments, but system investors have doubled down on chasing high returns.
MLive.com explains what happened:
By Jack McHugh
(Editor's note: The following is testimony presented to the Michigan House Tax Policy Committee by the Mackinac Center's Senior Legislative Analyst Jack McHugh on Feb. 15, 2017)
In 2007, Michigan’s Legislature approved a “temporary” income tax hike, from 3.9 percent to 4.35 percent. The rate was trimmed 0.1 percent in 2012 and made permanent.
The state of Michigan licenses about 160 occupations while cities, like Detroit, require even more. Occupational licensing is the fees, educational coursework, training and exams that governments mandate before someone can legally perform certain jobs. Mackinac Center policy analyst Jarrett Skorup speaks about why licensing laws in the Great Lakes State are so destructive to consumers and the economy.
Happy Valentine’s Day from the Mackinac Center! You don't require a conviction to take possession of my heart, Valentine. (Read more here).
Unlike the MEDC and its corporate welfare, I can't keep it a secret any longer: I want you to be my Valentine. (Read more here).
If you think states mismanage the pensions of their own employees, just wait until they get their hands on the retirement savings of private sector workers. Thankfully, Congress may undo an Obama-era regulation that could have removed safeguards for private pensions and forced some employers into government-run retirement accounts.
Cigarette tax increases are often justified on the belief that they will force people to quit smoking, but new research from the Mackinac Center for Public Policy and the Tax Foundation suggests that many smokers aren’t kicking the habit. Instead, they are turning to the black market for cheaper smokes.
If the first weeks of 2017 are any indication, this could be a banner year for labor reform in the United States.
Days into January, Kentucky became the 27th right-to-work state, sparking what could be a wave of labor reforms giving workers across the country more freedom. F. Vincent Vernuccio, director of labor policy at the Mackinac Center for Public Policy, told The Huffington Post that Missouri and New Hampshire were next in line:
During school hours, in front of students, Vassar Public Schools held an event which explicitly advocated for a school millage request. A panel that featured a private citizen and a group of administrators was videotaped and put up on the district’s Facebook page.
By Jack McHugh
Senate Bill 40, Expand state subsidies for particular companies on state line: Passed 24 to 13 in the Senate
To let particular businesses that are near the state line, and that have been selected by political appointees on a state 'economic development' program board, to each collect up to $10 million in state business subsidies for hiring people who do not live in Michigan.
In a meeting between the new president and law enforcement officials, a Texas sheriff complained about legislation that would require a person be convicted of a crime before the state took ownership of his or her property. President Donald Trump, wrongly, disparaged legislators who support this reform to the forfeiture system.
