(The following is a transcript of the testimony by F. Vincent Vernuccio, director of labor policy, on Feb. 24, prepared for the Wisconsin Senate Committee on Labor and Government Reform.)
Chairman Nass, members of the Senate Committee on Labor and Government Reform, I am F. Vincent Vernuccio, director of labor policy for the Mackinac Center for Public Policy, a nonpartisan research and educational institute based in Midland, Mich.
On Feb. 24, 2015, Director of Labor Policy F. Vincent Vernuccio testified before the Wisconsin Senate labor committee. Wisconsin is currently considering right-to-work for the public and private sectors. You can watch his testimony below or read his prepared testimony here.
Electricity choice in Michigan is under attack again this year. The two big utility companies are investing heavily in an advertising campaign and contract research. Ultimately, they’d like to eliminate market competition and force all consumers to buy only their electricity. The facts are, however, that electricity choice in Michigan has a track record of driving down rates, and electricity consumers will be worse off if the state enlarged the utilities’ monopoly.
In some states, workers who chose to leave their unions continue to have dues deducted from their paychecks. Illinois Gov. Bruce Rauner recently signed an executive order ending this practice.
F. Vincent Vernuccio, director of labor policy at the Mackinac Center, discussed the issue with Heartland for an article published February 23.
There are too many school districts, according to state officials. Even though student enrollment is declining, more school districts open every year, these officials say, putting existing districts under financial pressure.
Though this may seem like a school finance and administrative issue, the “too many school districts” narrative is often used to criticize charter schools. Juxtaposing Michigan’s decreasing enrollment with the rising number of school districts (entirely driven by charter schools) is just a way to complain about the fact that more charter schools are opening.
Even with Michigan’s right-to-work law, workers do not have full freedom. In bringing true fairness to both unions and workers, Michigan has the power to give public workers a complete choice when it comes to associating with a union, while at the same time lifting government unions’ burden of representing nonmembers.
By Jack McHugh
Senate Bill 54, Ban using a drone to interfere with hunters: Passed 38 to 0 in the Senate
To prohibit using an aerial drone to interfere with or harass a person who is hunting. This would expand an existing law that bans interfering with or harassing hunters. Senate Bill 55 bans using a drone for hunting and also passed unanimously.
From 1995 to 2011, Michigan ran a program that granted special tax exemptions to chosen companies. The research on this program – the Michigan Economic Growth Authority – has been pretty consistent: It was a failure.
The Mackinac Center did two studies on MEGA; a 2005 study showed that the few jobs “created” from the program were temporary and expensive and a 2009 study found that it had an overall negative impact on Michigan’s economy. The Michigan Office of the Auditor General has found repeated problems with state “economic development” programs over-promising and under-delivering. The Anderson Economic Group found a negative impact on job creation. The only favorable study was done by the Upjohn Institute, but even that found only a very small positive economic effect and that the actual MEGA program was almost incidental to the state’s economy. A recent review of the program showed that only 2.3 percent of the projects given tax credits ever met their job projections.
Members of the Michigan House of Representatives today announced efforts to reform the state’s criminal laws. The efforts will be spearheaded by a working group, co-chaired by Rep. Chris Afendoulis, R-Grand Rapids Township, and Rep. Kurt Heise, R-Plymouth.
The work of Michael D. LaFaive, Todd Nesbit, Ph. D. and Scott Drenkard is used as the basis of a reports by the Wall Street Journal, Reason, New York Post, The Sacramento Bee, The Wichita Eagle, SILive.com, CSPnet.com and several radio stations in Kansas: WHBL, WSAU, WNCY, WTAQ, WYDR. An op-ed by Dr. Nesbit also appeared in the Columbus Dispatch.
Senior Legislative Analyst Jack McHugh’s Feb. 18 testimony to a House committee received attention in media outlets including WOODTV, Detroit Free Press, The Detroit News, Grand Rapids Press, Lansing State Journal, WZZM 13, Battle Creek Enquirer and HometownLife.com. Members of the House Tax Policy committee expressed concern about the $9.38 billion tax credit liability estimate from Michigan Economic Development Corp (MEDC), a nearly $3 billion increase from previous estimates. McHugh’s testimony also questioned the lack of economic development and transparency from the MEDC.
(Editor's note: Jack McHugh, senior legislative analyst, delivered this testimony to the Michigan House Committee on Tax Policy on Feb. 18, 2015.)
I’m going to touch on three issues in the next few minutes. First, some recent history on Michigan’s government economic development programs. Second, characterizing what an extensive body of scholarly research on such efforts has found. And third, offering some reform recommendations.
Approximately two billion dollars in additional taxes will be collected if voters approve a May 5 ballot proposal, based on figures projected by Michigan's legislative fiscal agencies. Here is the breakdown:
The May 5 ballot measure would increase the state sales tax from 6 percent to 7 percent. If approved by voters it would by itself collect an additional $1.427 billion in sales tax each year, and also automatically trigger an additional $523.9 million tax increase in the first year, and $663 million annually when all tax changes are fully realized (not counting inflation indexing provisions that could make the number higher in future years).
Last year, the Legislature passed a bill that blocks the direct sale of automobiles in Michigan. This makes it significantly more difficult for innovative car manufacturers, such as Tesla and Elio, to do business in Michigan, and limits the choices of consumers. Although cars dealers benefit from having their competition curbed, a 2009 study by the U.S. Department of Justice claims that this policy, according to the best available estimate, costs consumers about $2,000 extra per vehicle, or about 9 percent of the average cost of a new car.
By Jack McHugh
Only two roll call votes occurred in the full House and Senate this week. Two substantive committee votes are also described in this report.
Senate Bill 44, Hold GOP presidential primary on March 15, 2016: Passed 38 to 0 in the Senate
To require the Republican presidential primary election to be conducted on March 15, 2016, rather than Feb. 23 as currently required.
Executive Vice President Mike Reitz and Miriam Aukerman, a staff attorney with the ACLU of Michigan, recently co-authored an Op-Ed in the Lansing State Journal outlining the “overcriminalization” of Michigan and how the Legislature can take steps to correct the problem.
(Editor’s note: Jack Spencer is capitol affairs specialist for Michigan Capitol Confidential and a veteran Lansing-based reporter. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)
Michigan House Republicans recently released a reform agenda that calls for closing the state-run school employee retirement system to new employees. Senate Majority Leader Arlan Meekhof, R-West Olive, reiterated the proposal.
The necessity of closing the current defined-benefit pension system and instead offering new employees a defined-contribution plan is simple: the state underfunds pensions.
The 2015-16 House Republican legislators have laid out a solid plan with many great ideas for legislative goals they want to accomplish. Many of these priorities would limit government interference in the economy, establish more freedom for citizens and align with long-time Mackinac Center goals.
By Jack McHugh
Senate Bill 34, Revise concealed pistol license procedures: Passed 28 to 9 in the Senate
To eliminate county concealed pistol licensing boards and transfer their duties to the State Police and county clerks. A similar bill passed by the previous legislature was vetoed by Gov. Rick Snyder due to some specific provisions which have been removed from this version, including one requiring a concealed pistol license be issued to the target of a personal protection order who is otherwise eligible for a permit.
In his recent State of the Union address, President Obama at least called for one area in which governments should scale back their rules: licensing.
The president proposes funding for states to assess these regulations which put obstacles in the path of people trying to legally work, often in the form of fees and mandated education. According to a fact sheet from the White House, “The Budget seeks to reduce occupational licensing barriers that keep people from doing the jobs they have the skills to do by putting in place unnecessary training and high fees.”
Labor Policy Director F. Vincent Vernuccio writes in The Washington Times about the recent announcement by the Bureau of Labor Statistics that union membership is on the decline, including a 7.6 percent drop in Michigan from 2013 to 2014.
Vernuccio draws on his recent study, “Unionization for the 21st Century: Solutions for the Ailing Labor Movement,” to suggest how unions can stem the tide.
The Office of Regulatory Reinvention granted permission to the Michigan Liquor Control Commission to open a review of alcohol control rules. The Mackinac Center for Public Policy weighed in on two (beer and wine) of them today.
The Mackinac Center has long had an interest in the state’s beer and wine rules because they, among other things, raise the cost of beer and wine in the state while enriching a handful of crony capitalists. One study indicates that these rules may raise the cost of beer and wine by 6.4 percent to 30 percent, depending on the price.
Bridge Magazine has just announced that it will be releasing its report card grades for Michigan schools next week. Bridge's report card ranks schools in a way that is nearly identical to how the Mackinac Center ranks schools on its annual school report cards. Both report cards take into consideration a school’s poverty level when comparing their performance to other state schools. This should not be surprising, since Bridge credits the Mackinac Center for its methodology.
WZZM-TV13 in Grand Rapids recently featured a Mackinac Center study on the “overcriminalization” of Michigan and the number of new laws passed each year. Michigan has a far larger penal code than surrounding states.
“Most lawmakers come into office not thinking about the laws they want to delete, but they think about the laws they want to create,” Executive Vice President Michael Reitz, who co-authored the study with the Manhattan Institute, told WZZM.
