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Senate Bill 3, Repeal “prevailing wage” law: Passed 22 to 15 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 pay scales that local union officials represent as prevalent in a particular area, but which tend to be above the market rate. Senate Bill 1 would repeal the law for schools, and passed by the same margin. The Senate added a modest appropriation, which has the effect of making the bill not subject to a referendum.
The House Republicans recently released a proposal that would dedicate an extra $1 billion annually to roads by 2019. A chunk of the extra money comes from redirecting money from the Michigan Economic Development Corporation to the state’s transportation infrastructure.
The Detroit News calls the proposed House Republican roads plan “fantasy” because it provides additional road funding from future tax revenue growth. The plan, an editorial states, calls for finding money “out of thin air.”
Michigan is already operating on increased revenue from recent growth. The state budget spends $3.5 billion more state tax dollars than it did in fiscal year 2011.
Last year, Michigan passed a bill that effectively prohibited the direct sale of automobiles. Caving to pressure from existing car dealerships, the state now makes it difficult to impossible for new car manufacturers, such as Tesla Motors, to gain a foothold in the state’s automobile market. As advocates of free markets and fair competition, the Mackinac Center signed on to a public letter earlier this year calling for the Michigan Legislature to reconsider this anti-competitive measure.
The 80-20 loss on a $2 billion tax hike will guide subsequent road funding proposals; there is no shortage of interpretations (some odder than others) of the message voters intended to send. Some assert that voters will not approve complex proposals and suggest other tax hikes. The new House proposal, on the other hand, indicates that the proper message is to first look within the state government’s current resources to fix the roads.
Last month, the Michigan House Tax Policy committee heard testimony about the state’s economic incentive programs. The usual justification for giving selective favors to particular firms was trotted out: Other states will capture these projects if this state does not distribute taxpayer cash to companies and developers. Without special incentives, proponents argue, Michigan is doomed to fall behind.
In the May 12 edition of the Detroit News, Policy Analyst Jarrett Skorup and Assistant Director of Fiscal Policy James Hohman propose ideas of how Michigan taxpayers can fund the state's roads.
In their suggestions, most of the revenue comes tax-funded projects that offer little to no value to the average Michigan taxpayer.
Currently, the Michigan Constitution requires the state to use a flat income tax, where everyone pays the same percentage (4.25) of their income. But some want to scrape this and allow state legislators to set different rates for different people.
A recent poll from EPIC-MRA ostensibly suggests there’s support for a graduated income tax among Michiganders, with 66 percent favoring the concept. At their convention last weekend, Michigan Democrats proposed a constitutional amendment that would enable the Legislature to create a progressive income tax. Over the years, similar bills have been introduced on the issue.
Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit Votespotter.com and download VoteSpotter today!
Senate Bill 133, Adopt “Omnibus” budget: Passed 23 to 15 in the Senate
The Senate version of the non-education portion of the state government budget for the fiscal year that begins on Oct. 1, 2015. This would appropriate $38.0 billion, compared to $37.4 billion originally appropriated the previous year. Of this, $17.2 billion comes from state tax, fee and other revenue, compared to $17.6 billion the previous year. The rest of this budget is federal money ($20.8 billion, compared to $19.8 billion the previous year). The education portion of the budget is in Senate Bill 134. Altogether, the Senate proposes to spend $53.9 billion next year, vs. $53.2 billion originally appropriated for the current year.
The May 8th edition of the Providence Journal features an article written by Director of the Morey Fiscal Policy Initiative Michael LaFaive and Board of Scholars member Todd Nesbit, Ph.D.
The experts show how smokers turn to lower-cost alternatives when the price of cigarettes increase.
Michigan's prevailing wage law mandates hourly pay for workers on public projects, often inflating wages 10 to 15 percent above market rates. Consistently overpaying for these services cost Michigan tax payers an average of $224 million each year between 2002 and 2012, according to the Anderson Economic Group.
Excessive cynicism can be an occupational hazard of those who pay close attention to actions of legislatures and politicians. Honest debate over important policy issues is important, but political observers can be quite disappointed if they consider everything their elected officials work to decide.
The following blog post was first published by the Kansas Policy Institute on May 4, 2015.
Various proposals would raise excise taxes on cigarettes, one by as much as $1.50 per pack among other items. This is a bad — if not irrational — choice for Kansas given the large raft of unintended consequences associated with it for little in the way of public health advances.
In a news story titled “Nearly half of Obamacare exchanges are struggling over their future,” The Washington Post reports the following:
Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially, presenting state officials with an unexpected and serious challenge five years after the passage of the landmark Affordable Care Act.
Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit Votespotter.com and download VoteSpotter today!
House Bill 4102, "Omnibus" state budget: Passed 59 to 51 in the House
The House version of the non-education portion of the state government budget for the fiscal year that begins on Oct. 1, 2015. This would appropriate $37.9 billion, compared to $37.4 billion originally authorized for the current year. With the education budget included (next bill) the House proposes to spend $53.7 billion next year, vs. $53.2 billion for the current year.
With Senate Bill 248 the Michigan Legislature is attempting to address a number of problems with the auto insurance market in the state. Michigan’s no-fault system creates misaligned incentives, resulting in auto insurance rates that are among the highest in the nation. There is also a larger question of why we treat severe injuries from car accidents differently than we treat the similar injuries from other types of accidents.
With so many complex policy issues, how do we decide which are worthy of our support or deserve to be opposed? Environmentalism, my specialty, is rife with policy initiatives that are often based on emotional appeal, rather than well-reasoned articulations of facts.
By Jack McHugh
Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit Votespotter.com and download VoteSpotter today!
Senate Bill 233, Revise vehicle trade in tax break detail: Passed 37 to 1 in the Senate
Ken Droz, former director of communications for the Michigan Film Office, responded to an op-ed I co-authored about Michigan's film incentive program. Unfortunately, he levels criticisms and makes claims without citing any facts.
The block quotes below are the assertions he makes in a MLive article, and are followed by my response:
By Jack McHugh
The Foundation for Government Accountability has just published a report on state enrollments under the Obamacare Medicaid expansion. Here’s what the authors say about Michigan:
When Republican Governor Rick Snyder lobbied the Michigan legislature to adopt his Obamacare Medicaid expansion plan, he too sold it on the promise of low and predictable enrollment. His office predicted no more than 477,000 able-bodied adults would ever sign up, with 323,000 signing up in the first year.
Grand Valley State University scores second-highest on the state’s “performance funding” measurements and Wayne State University scores the lowest. By most objective measures, the former is doing a better job than the latter — but WSU still gets far more money from taxpayers.
By Derk Wilcox
On April 8, 2015, the Michigan Supreme Court handed down an important decision upholding reforms to healthcare benefits for Michigan’s retired public school employees. Although it was specific to just healthcare, it bodes well for any future reforms to public pensions in Michigan.
The total value of property taxes collected in Michigan increased slightly from $12.8 billion in 2013 to $13.0 billion in 2014, a 1.7 percent increase, according to the state’s annual property tax report. This exceeded the 1.0 percent inflation growth for the Detroit metropolitan statistical area over the same period.
By Jack McHugh
Now with one click you can approve or disapprove of key votes by your legislators using the VoteSpotter smart phone app. Visit Votespotter.com and download VoteSpotter today!
Senate Bill 248, Revise mandated no-fault auto insurance personal injury coverage
Editor’s Note: The author made several attempts to contact Steve Inskeep and to request a follow-up story that might provide a fairer treatment of the Mackinac Center’s right-to-work study. We received no response.
April 6, 2015
Mr. Steve Inskeep
In a March 27 on-air exchange with David Wessel of the Brookings Institution on the impact of right-to-work laws, you focused on a “single phrase that was mentioned in a news story earlier this week” (transcript here). This phrase was sourced in the NPR story to a 2013 study coauthored by Dr. Michael Hicks and myself.
