At an event sponsored by the West Michigan Policy Forum, Nick Ciaramitaro of Michigan AFSCME Council 25 criticized defined contribution retirement plans. They are, he argued, more expensive than defined benefit plans for the same benefit, creating a “lose-lose situation.” He is wrong — letting employees control their own retirement accounts would lower costs and give them control over their own retirement.
By Jack McHugh
The Legislature did not meet this week, so the Roll Call Report continues its review of key votes from the 2015-2016 session.
House Bill 4122, Repeal film producer subsidies: Passed 58 to 51 in the House on March 11, 2015
To repeal the program that gives Michigan tax dollars to film producers. Since 2008 some $500 million was distributed to producers by the state.
A number of sources attribute jokes about government programs being the closest thing to immortality to President Ronald Reagan. At least one source traces the humor back to a United States senator in 1933. That is an apt starting point because it was in that year President Franklin Roosevelt took office and worked to create — among other relief programs — the Civilian Conservation Corps.
Pension costs are forcing tough choices on Michigan’s school districts. Their problems are caused almost entirely by state policies, so the solution must come from the state.
In Michigan, school districts have little to say about the retirement benefits offered to their employees; all the key decisions are set by state policy. The state requires districts to use its retirement system, sets its benefits, and decides what the funding assumptions and policies will be. To pay for pension benefits, the state assesses districts a percentage of their payroll. A district sends 36.31 percent of its payroll to the school pension system, while the employees, as a group, must put 4.69 percent of their paychecks in the system.
Recent debates about whether persistently underperforming Detroit schools should be exempted from state closure laws prompted the Excellent Schools Detroit coalition to share some observations behind their gloomy outlook. People of good will want much better opportunities and outcomes for Detroit students, even as the path to that destination appears steep and foreboding.
This morning the Washington D.C.-based Tax Foundation released its 2017 State Business Tax Climate Index. The index ranks the structure of a state’s tax system, not the actual financial burden it imposes.
Michigan’s position is unchanged from last year at No. 12. This is up from 2010 when the state was ranked 17th, according to Joseph Henchman, an economist with the foundation. Michigan’s ranking improved after it eliminated the hated Michigan Business Tax and related surcharge in favor of a more transparent Corporate Income Tax.
Michigan’s counties are drowning in pension debt and it’s time for their leaders to act to prevent future cuts to services or major tax hikes to residents.
Josh Paladino, a Mackinac Center summer research intern, wrote about the ballooning unfunded pension liabilities municipalities are facing in a recent op-ed published by the Lansing State Journal.
Michigan’s 21st Century Jobs Fund program is fatally flawed and lawmakers ought to put it out of its misery, one Mackinac Center analyst argued in a recent op-ed published in The Detroit News.
Gov. Jennifer Granholm promised the program would blow the state away, but 10 years later, taxpayers have little to show for the hundreds of millions of dollars reallocated through the jobs fund. Aside from the fund’s lack of transparency, questionable reporting practices and possible constitutional issues, Mackinac Center’s Assistant Director of Fiscal Policy argues the entire premise of the corporate welfare program is flawed.
Nearly half the states, including Michigan, are suing the U.S. Department of Labor in an effort to block the Obama Administration’s new overtime rule that would significantly increase the number of people eligible for overtime pay.
State Attorney General Bill Schuette, who signed onto the suit, said the new rule that’s set to take effect Dec. 1 will hamper job creation and increase unemployment. Patrick Wright, Mackinac Center vice president for legal affairs and director of the Mackinac Center Legal Foundation, told WNEM TV5 that the rule may be designed to increase wages, but will do the opposite.
If Michigan lawmakers want to stifle the state’s craft brewers, they’ve found just the way.
Rep. Tom Hooker, R-Byron Center, introduced House Bill 5873 this month to increase Michigan’s beer tax from $6.30 to $21.70 per barrel, a nearly 250 percent hike. Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center, weighed in on the debate in a recent Mlive article.
By Jack McHugh
House Bill 4282, Exempt small-project home repair contractors from licensure mandates: Passed 66 to 40 in the House
To exempt individuals who do residential repair and rehab jobs worth less than $4,000 from licensure mandates imposed on contractors.
Tesla is taking its fight to sell vehicles directly to consumers in Michigan to the courtroom.
According to an article published by USA Today and the Detroit Free Press, the electric automaker is suing Michigan Secretary of State Ruth Johnson, Michigan Attorney General Bill Schuette and Gov. Rick Snyder over a 2014 state law requiring manufacturers to sell vehicles through dealerships. Tesla, much like Apple, wants to sell directly to consumers.
The Nov. 8 North Dakota ballot initiative to raise cigarette excise taxes by 400 percent will — if adopted — increase cigarette smuggling and cause other unintended consequences.
We have studied cigarette evasion and avoidance (what we call “smuggling”) around the United States for a decade and have developed a statistical tool for measuring the degree to which cigarettes are smuggled across state and international borders.
The Michigan Education Association recently released a survey of some of its membership. Much of it isn’t surprising — like other workers, teachers want to make more money and don’t like how they are evaluated.
But one key question is about retirement and shows that school employees don’t feel secure with the current teacher pension system.
Pugsley Correctional Facility in Kingsley, Michigan, is slated to close later this month, on Sept. 24.
The state’s FY 2016-17 budget calls for the Department of Corrections to close the Pugsley Correctional Facility to save money, a compromise struck by a conference committee between the Senate proposal to close two prisons, and the House plan to close none. Lawmakers expect that closing the 1,342-bed facility will save $22 million.
By Ben DeGrow
Charter schools, like all other public schools, cannot legally turn away children with physical, intellectual and emotional challenges. Nevertheless, the numbers reported to state officials bear out that Michigan charters — as in many other states — serve lower rates of special-needs students. A closer look reveals that blame for this apparent discrepancy cannot be placed at the feet of charter school operators.
By Jack McHugh
While legislative committees were active this week, no votes were taken in House or Senate. The Roll Call Report therefore continues its review of key votes from the 2015-2016 session.
House Bill 4522, Expand legislative subpoena power: Passed 69 to 39 in the House on June 2, 2015
Michigan lawmakers took some important steps last year to reform Michigan’s civil forfeiture laws, but there’s still plenty of work to be done.
Mackinac Center Policy Analyst Jarrett Skorup spoke with Lester Graham on Michigan Radio’s Stateside program about the practice of civil asset forfeiture. Under this practice, law enforcement may seize private citizens’ property, regardless of whether or not that person has been convicted of or even charged with a crime.
A recent MIRS report, “State Collects 32% More In Fees Than It Cost to Regulate,” notes that the state brings in $147 million in revenue for licenses and permits. But the total cost to regulate Michigan’s variety of industries was much probably much higher.
By Jason Hayes
The Detroit News recently reported that low oil prices have resulted in a decreased number of new oil and natural gas wells around Michigan. As a result of the slowing markets and dropping prices, the industry is seeing losses mount and is laying off hundreds of thousands of employees across the country. The article notes that Michigan is setting record lows in the number of drilling permits, with accompanying job losses. In fact, Energy Information Administration (EIA) numbers indicate that oil production in the state actually reached a 25-year low in 2015.
It’s not news that government employee pension systems across the nation have promised retirees billions in pensions and not saved enough to make good on those promises. But a related problem could pose an even greater risk to taxpayers: lifetime health insurance benefits provided through these systems.
According to MIRS News, Sen. Mike Kowall, R-White Lake, is pushing for driverless vehicle legislation, hoping to land a research center in Willow Run. The intent of the legislation, MIRS said, “is to propel Michigan to the head of the line in the highly competitive autonomous sweepstakes, which involves such states as California, Nevada, Texas and Florida.”
Like state and local governments across the nation, Michigan has a variety of public entities that offer pensions to former and current employees. And like nearly all other governments, Michigan’s units have huge unfunded liabilities.
Unfunded liabilities exist because politicians have not saved enough money to pay for the pensions promised to employees and retirees.
By Jack McHugh
House Bill 4209, Impose licensure, regulation on medical marijuana industry: Passed 25 to 12 in the Senate
To impose a 3 percent tax on retail medical marijuana sales, along with a licensure mandate and comprehensive regulatory regime for medical marijuana growers, transporters, dispensaries and more, with civil and criminal penalties for violations. This would be modeled on the state's "three tier" alcohol sales regime, which has been criticized for empowering anti-competitive regional distribution monopolies.
The Legislature is considering a bill that would prohibit local governments from banning people from owning pit bulls. Senate Bill 239, sponsored by Sen. Dave Robertson, R-Grand Blanc Township, has passed the Senate and is being considered in the House.
