Vitti’s ‘Student-First’ Agenda Faces Early Test

Pay limits for incoming teachers an unnecessary obstacle

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.

Vitti wants to make teacher raises a budget priority. But district leaders also ought to insist on concessions from the union that give them more flexibility to fill shortages with effective instructors.

A new Bridge Magazine article identifies one easy place to start: removing stringent rules on how much teachers can be paid when they transfer in from another district. The terms of Detroit’s current contract only permit “credit on the salary schedule for up to two (2) years of outside teaching experience.”

Bridge’s Mike Wilkinson offers an example of why this sort of policy is unproductive: “Say you’re a teacher with 10 years’ experience at Utica schools, which had layoffs last year. To work in Detroit, you’d have to accept nearly $36,000 less, going from more than $78,500 to just under $43,000 because eight years’ of experience wouldn’t count.”

The collective bargaining agreement does allow some transferring teachers to get eight years of experience credit. According to Detroit Federation of Teachers President Ivy Bailey, the exception applies to special education and other positions that are harder to fill.

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Bridge’s quick analysis found other districts have agreements with similar restrictions, but it also found districts that operate without the restriction. One large suburban district, Walled Lake Consolidated Schools, reached an agreement with the local union to remove the offending provision a few years ago, showing it can be done.

But there’s good reason to question how far Vitti’s team will go to attract more teaching talent. The Detroit schools’ spokesperson told Bridge the district has no interest in hiring qualified experts who lack state certification. This option provided last year by state lawmakers could help alleviate some shortages.

A teacher’s first two years of performance more accurately predict future success than whether she is certified. Further, the average teacher doesn’t improve after her first five years on the job, while earning advanced degrees bears no relationship with overall performance. Nearly all public school districts pay teachers based on seniority and credentials and little else, including performance. That’s convenient to administer but out of step with rewarding results.

To its credit, the district already gives out modest merit-based bonuses, so a basis exists for more fundamental reforms. Ultimately, though, Detroit community schools could enhance teacher quality much more by phasing out the conventional salary schedule and basing teacher raises primarily on meaningful measures of effectiveness. Then administrators need to get out of the way and give teachers more tools and opportunities to succeed.

As transformative as these policy changes might be, Detroit’s new superintendent doesn’t need to be that ambitious in his first few months to show he is serious about a student-first agenda. Lifting the restriction on pay levels for new teachers with outside experience would represent a modest step. But it also could send a signal of more changes to come.


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George Orwell and Humpty Dumpty Economic Policy

Michigan must remember warnings to not corrupt the English language to give businesses 'free' money

George Orwell photo from Wikipedia

"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."

Lewis Carroll, “Through the Looking-Glass”

“If thought corrupts language, language can also corrupt thought. A bad usage can spread by tradition and imitation even among people who should and do know better.”

George Orwell, “Politics and the English Language”

 

Our state Legislature is considering even more ways for the people who run government to pick which businesses get free money. These are largely reheated versions of failed programs, dressed up in new language.

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The debate over these programs pits decades of history, consistent academic research results and fundamental principles of economics versus the flowery language of “economic development” promises. And just as Orwell warned us, the language is doing an excellent job of obscuring the facts.

To combat this, it’s important to recognize how some carefully chosen words don’t mean what they should:

  • Government “economic development” schemes aren’t held accountable for developing the economy. That’s because they can’t; the resources in play are overwhelmed by every other economic factor in the real world. In a state of 10 million people with a $468 billion GDP, Michigan’s programs in this space are roughly 1/1000th of the economy and their impact on it is proportionally insignificant.
  • “Refundable tax credits” can dwarf a company’s actual tax bill, meaning the company cashes a large check from the state. It’s a way of disguising a cash handout through the tax code, since the money never shows up as an appropriations line item.
  • The “Michigan Economic Growth Authority” had no authority over economic growth in Michigan. Instead, it awarded refundable tax credits (see above) to select businesses. Even though the MEGA program is gone, it will still cost taxpayers $660 million this year, and it continues to hurt the economy.
  • The “Michigan Economic Development Corporation” doesn’t have the ability to develop the state’s economy and isn’t an actual corporation. It’s run largely by advocates for big government and big business and makes its decisions accordingly.
  • The “Michigan Strategic Fund” was created in 1984 in response to a recession that had already been over for two years. In more than 30 years since, it has failed to identify a strategy that can deliver a return on the resources it expends. Rather, its governing board rubber-stamps whatever deals are brought before it, without any analytic rigor.
  • The legislation called “Good Jobs for Michigan” isn’t about creating jobs. Rather, it makes tax money flow to some companies, rather than from them. The state’s own Auditor General found that only one out of every five promised jobs is ever created through these kinds of deals.
  • “Transformational brownfield redevelopment” means building something new where something else used to be. In other words, it’s what humans have done since we invented cities, and for millennia people did it without getting free money from the government to do so.

We have a term for these sorts of terms – doublespeak – thanks to Orwell’s “1984.” But before he introduced us to the power of “doublethink” and “Newspeak” in that novel, he published his essay “Politics and the English Language” that still reads true today. “In our time, political speech and writing are largely the defence of the indefensible,” he wrote. “When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms.”

The way to fight this, he said, is to recognize and avoid the temptation to act like Humpty Dumpty and make our own words mean what we choose them to mean. “Political language — and with variations this is true of all political parties, from Conservatives to Anarchists — is designed to make lies sound truthful … and to give an appearance of solidity to pure wind,” Orwell concluded. “One cannot change this all in a moment, but one can at least change one's own habits.”

For those who oppose efforts by would-be central planners to interfere in the market and pick winners and losers through the political process, remember Orwell’s warning: “A bad usage can spread by tradition and imitation even among people who should and do know better.”

We do know better. But until we regain control of the language being used, simply being right isn’t going to be enough.


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Skorup Speaks on ‘Good Jobs’ Proposal Before Michigan House Committee

Republicans contemplate returning to bad economic policy

Editor's note: The following is a transcript of the testimony given by Jarrett Skorup, a policy analyst at the Mackinac Center for Public Policy, on June 14 before Michigan House Tax Policy Committee.

In February of this year, the House Republican Action plan said this, in regards to economic policy:

“To provide people with more opportunities, we will support a broad-based economic environment that is friendly to job creation and business growth, no matter the size of the business. We are also going to protect the taxpayers’ investment by making sure the funds used by the Michigan Economic Development Corporation are transparent to the public, directed toward long-term viability, help small businesses and are not wasted on picking winners and losers.”

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These bills, the so-called “Good Jobs” package, violate those principles. Let’s take them one-by-one.

“To provide people with more opportunities …”

These bills provide more opportunities for some by taking from the many. Even if you believe the promises made in the bill package, at the end of the day you have a state agency deciding which companies get tax credits.

“We will support a broad-based economic environment that is friendly to job creation and business growth, no matter the size of the business.”

These bills are narrowly tailored toward large corporations. Every three months, Michigan creates around 200,000 jobs – Lansing is going to pick and choose which of those get a break.

“We are also going to protect the taxpayers’ investment by making sure the funds used by the Michigan Economic Development Corporation are transparent to the public, directed toward long-term viability, help small business and are not wasted on picking winners and losers.”

Transparent? As we sit here, the MEDC is paying out more than $600 million for past tax credits and will not say who the money is going to or what the money is being used for. The agency is not compliant with reporting requirements on its current programs, but lawmakers are being asked to provide blanket authority to spend $250 million for bureaucrats to select winners and losers. Help small business? These bills are for large firms. Not picking winners and losers? Some companies get breaks, others are on the hook for the cost.

Testifying here today, I feel like I’m in the movie “Groundhog Day.” Michigan has gone the tax credit and subsidy route – in the 1990s under Gov. Engler and in the 2000s under Gov. Granholm. Bill packages promising “good jobs” were passed with wide, bipartisan support. But reviews of those programs showed negative economic results, particularly for the Michigan Economic Growth Authority package, in which fewer than 3 percent of projects met their projections and fewer than 20 percent of promised jobs were created.

But we don’t even have to look at MEGA; we have plenty of research showing the ineffectiveness of this type of program. The Kansas PEAK program is very similar to this “Good Jobs” legislation. Established in 2009, PEAK encouraged firms to move to the state or expand, allowing them to keep up to 95 percent of the payroll withholding taxes (based on wages above the county median). The nonpartisan Kauffman Foundation recently found the incentives had no notable effect on Kansas jobs or income. This shouldn’t be surprising – the economic literature on tax increment financing shows the effects to generally be negative, with the costs of the programs outweighing the gains.

For a decade, Michigan was a national leader in what we consider bad economic policy – raising taxes broadly while giving breaks to specific companies or industries. When Republicans took over the House and governorship, it wisely moved away from that. While we still offer subsidy programs, the amount of corporate welfare and tax credits has greatly declined. In those years, Michigan has been a national leader in jobs and income. Let’s not go back to repeating the mistakes of the past.


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In pursuing economic development, Michigan may repeat past errors

State lawmakers are once again rushing to embrace another program designed to benefit a few at the expense of the many. The new proposal is known colloquially as “Good Jobs for Michigan” but if history is any guide, it will produce few of note. It is a state “tax capture” program loosely modeled on the state’s failed multibillion dollar corporate welfare subsidy program known as MEGA, and it could be passed as early as this summer.

The proposal effectively allows well-connected corporations and others to keep tax dollars for projects that would have otherwise accrued to the government. It should not be adopted into law. It is unfair, supported only by questionable economic analyses, doesn’t work and is expensive, too. Michigan’s jobs bureaucrats should just quit while they are behind. A better development tool is a fair field and no favors — tax cuts for all and not just a few big business owners selected by state politicians.

Government — as many have long argued — has nothing to give anyone it hasn’t first taken from someone else. In order for legislators to give financial favors to big business they must first, directly or indirectly, reach into the pockets of small business owners and other taxpayers.

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Robbing Peter to pay Paul is poor economics, especially because an expensive bureaucracy is necessary to run expensive corporate welfare programs. This program could cost $250 million for up to 10 years, for starters.

The proposal’s authors have tried to give it some intellectual respectability by calling for a “regional” computer-based analysis. The computer model is supposed to assure whether the tax capture scheme “will result in an overall positive fiscal impact to the state.” But this means nothing.

In truth, the bill mandates a facade of science be constructed to obscure the program’s costs and perhaps puff up its alleged benefits. The state’s hugely expensive and failed Michigan Economic Growth Authority subsidy program also required such analyses.

And those analyses, published by the program administrators, repeatedly found net positive benefits for handing out fiscal favors. Yet we now know that only about 2.3 percent of MEGA deals lived up to their expectations, meaning the computer analyses were wrong. The only thing they demonstrated was the inability of state bureaucrats and their consultants to accurately predict the future.

The failed MEGA program itself is a reason not to create a new MEGA program. Five academic- style studies have been performed of the old MEGA between 2005 and 2014. Four of them said MEGA had a zero-to-negative impact, despite the effort of billions in taxpayer dollars. The fifth found a positive impact, but it was small. If MEGA, a huge program, could not move Michigan’s job needle, it is unlikely that this new, smaller program will either.

Kansas tried a tax capture program called PEAK, or Promoting Employment Across Kansas, which was similar to Good Jobs for Michigan. When he studied PEAK in 2014, economist Nathan Jensen concluded that firms that had received special treatment were no more likely to create jobs than similar firms that did not receive an incentive.

Good Jobs for Michigan is officially capped at $250 million worth of deals. But this can easily be increased by the Legislature. Remember, the first MEGA program was sold as a narrowly tailored, rarely used incentive deal program, too. It quickly expanded when it was politically convenient. Last year, the now defunct MEGA program cost the state treasury $1 billion, roughly equal to all the money generated by the state’s corporate income tax.

It should not strain credulity to think that a future governor might happily expand a new MEGA into something as unrecognizable and expensive as the original MEGA became over time.

The proposed Good Jobs for Michigan program is as unfair, ineffective and could easily become as expensive as Michigan’s past, failed jobs programs. It should not be adopted.


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In endorsing a proposal to give businesses more subsidies, The Detroit News says that failing to pass this package “stunts not just job creation, but the state’s population growth as well.” But that assumes the proposal will help the state economy and fails to consider the full costs of this subsidy program.

The empirical and historical evidence of similar programs suggest that these proposed subsidies will not have a meaningful impact on job creation and certainly won’t increase the state's population. Economists have assessed dozens of similar programs in Michigan and other states and the results are pretty negative.

Opponents of this recent selective subsidy program are being accused of being “ideological.” But the real ideologues are those who support delivering hundreds of millions of taxpayer dollars to politically favored business owners based on flimsy evidence.


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June 9, 2017 MichiganVotes weekly roll call report

Senate Bill 343, Give students government predictions related to careers: Passed 37 to 0 in the Senate

To require school districts to give students a regional “career outlook” forecast document created by a government "Bureau of Labor Market Information and Strategic Initiatives." This would be part of a process that seventh-graders must undergo of creating an "educational development plan" with school officials.

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Who Voted "Yes" and Who Voted "No"


Senate Bill 297, Mandate electrician have proof of licensure while on job: Passed 37 to 0 in the Senate

To mandate that an electrician on a job must show a government official or inspector a photo ID and evidence of licensure status if ordered.

Who Voted "Yes" and Who Voted "No"


House Bill 4457, Authorize new energy debt scheme for colleges and universities: Passed 108 to 0 in the House

To include state colleges and universities in a scheme authorized by a 2016 law for counties, which lets them contract with vendors for energy efficiency projects, and pay for these with money the projects are supposed to save (or from regular tax revenue if savings don’t appear).

Who Voted "Yes" and Who Voted "No"


House Bill 4416, Allow law-abiding citizens to carry pistol without special permit: Passed 59 to 49 in the House

To establish that a person who is not prohibited by law from possessing a firearm may carry a gun in public including a concealed pistol. In other words, the bill would eliminate the requirement for a law-abiding citizen to get a special permit to carry a concealed pistol.

Who Voted "Yes" and Who Voted "No"


House Bill 4636, Criminalize female genital mutilation of minors: Passed 105 to 2 in the House

To make it a crime subject to 15 years in prison to perform a clitoridectomy, infibulation, or other female genital mutilation on person less than age 18. Claims that the procedure is required by custom or ritual would be explicitly excluded as a defense to prosecution. Related bills would ban transporting a girl for this purpose, authorize lawsuits from victims, and permanently revoke the license of a medical professional convicted of this.

Who Voted "Yes" and Who Voted "No"


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.


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(Editor's Note: The following is an edited version of a speech given by Michael LaFaive to the Florida chapter of Americans for Prosperity on June 8, 2017. Some of the language used here was taken from previously published remarks or essays.)

There are few areas of research where I find such widespread agreement in academic and other studies than those involving targeted “economic development” programs. In short, so-called development programs run by governments are ineffective and expensive. They don’t work, they’re unfair to those who pay full freight, cost billions of dollars that could be better used elsewhere and are potentially corrupting.

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The modern “war between the states” over jobs has been active since the Great Depression. Fifty states run some 1,829 incentive programs designed to create jobs and wealth, according to the Council for Community and Economic Research, and economists have written hundreds and hundreds of studies trying to measure their effectiveness.

In 2004, some economists in Iowa did a meta-review of the economic development literature. That is, they looked at studies other people had made of the subject, how they conducted them, and what they found. The title of their review tells the tale: “The Failures of Economic Development Incentives.” The authors came to a significant conclusion: Any claim that government economic development programs improve economic growth or lead to positive fiscal benefits for the public treasury is probably false.

Since their study was released, I have found nothing in the professional or academic literature to suggest anything has changed. In fact, if anything, the frequency and clarity of published evidence against such programs has only increased. Here’s some of what we’ve learned recently about different economic development programs:

  1. Last year, I was a co-author of a study that looked at 39 years of data from 48 states concerning state tourism promotion. We wanted to know if state spending on tourism helped the economy. What we found is that for every $1 million increase in promotion spending, there was an increase of just $20,000 in extra economic activity in the average state’s hotel and motel industry. Other sectors fared worse, which suggests that most of that $1 million was essentially wasted.

    A 2011 academic study published in the Journal of Travel Research looked at tourism promotion by using data through 2003, the latest year available at the time. It concluded that only states that started out with very low levels of spending to promote tourism gained any employment from increasing their spending. Even then, though, the gains were so small they did not translate into greater gross state product, which is a measure of economic well-being.

  1. A 2016 paper from a Texas professor examined some high-profile government subsidy and loan programs in Maryland and Virginia that were meant to create jobs and develop more capital. Such programs, it said, have “no impact on growth or job creation.”

A 2008 literature review on sports stadiums, franchises and big events had this to say: “The evidence reveals a great deal of consistency among economists doing research in this area. That evidence is that sports subsidies cannot be justified on the grounds of local economic development, income growth or job creation.”

  1. An April 2016 academic paper found the opening of a new sports facility does not increase new businesses, though it registers a slight uptick in additional workers. Most other academic papers on professional sports stadiums and teams also show no impact, or, worse, a negative one.
  1. A 2015 study from Ball State University argued that Tax Increment Financing projects in Indiana were “associated with less employment, less taxable income and slightly higher tax rates.” Again, an attempt by government to pick the next great winner in economic development failed.
  1. A 2014 paper titled “Evaluating Firm-Specific Incentives” examined a state program in Kansas that allowed lucky companies there to capture tax revenues otherwise meant for the state treasury. The author found that program recipients were no more likely to create new jobs than similar companies that had not received an incentive.
  1. There have been five scholarly studies since 2005 on Michigan’s huge refundable tax credit program called MEGA, which offered up billions in incentives during its life. Four found an impact that ranged from zero to negative. One found a positive impact, but it was tiny.

The record gets worse when you consider opportunity costs. That is, if billions of dollars weren’t spent trying to create economic development, might they be used more effectively through across-the-board tax cuts or infrastructure improvements? A 2000 tally by professor Kenny Thomas said the annual value of incentives offered reach as much as $50 billion. That’s a lot of money that could be redirected.

In all of my research, I’ve only encountered one paper — and from a consultant — that looked at the opportunity cost of a program from a broad-based perspective. If, instead of handing out a tax credit or subsidy, we made across-the-board tax cuts of the same amount, what would happen? In most instances, and for the biggest program examined, the net result would be more jobs with broad-based tax cuts. Yet none of the academic studies I’ve read attempt to factor in opportunity costs. Most of them still report zero to negative impacts, meaning that in real-world terms, they overestimate the (already meager) benefits of government-directed development programs.

Why do incentive programs fail? I suggest four big reasons.

First, government can’t give anyone something it doesn’t first take from someone else. I believe it was Frederick Bastiat who said, “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” Government doesn’t raise money for its subsidy programs by selling Girl Scout cookies. It gets it through confiscation of taxes. That money, left in the hands of the people who first earned it, would also create jobs and wealth if only its owners were allowed to dispose of it as they see fit.

Bureaucrats who run develop programs do not have profound skills at picking winners from losers in the marketplace to “invest” your confiscated dollars in a profit-maximizing way. To think otherwise, in the words of Friedrich Hayek, is the “fatal conceit” of economic planning. It is a folly stemming from conceit to think that a small group of planners can somehow grasp our economic lives, in all their nuances and details, and then reorganize them forcefully in a way that would be better off than if we had simply been left to our own devices.

Let me offer two examples to drive this point home. Forgive me if the first one, which I learned from economist Paul Romer, seems a little “wonky” but I promise it is worth your time.

How many ways can you arrange just three playing cards? The answer is easy. Six. Three times two times one equals six. Now, how many ways can you rearrange just 20 of them? The answer exceeds 2 quintillion or roughly the number of seconds that would tick by in 75 billion years.

Yet central planners like those at state economic development agencies are implicitly claiming that they can ponder all the possible combinations of outcomes. With that superhuman skill applied, they then confiscate our wealth, invest in some allegedly job creating entity and have the result be better than if had all been simply left alone.

Let me drive this point home with an example, though more of an extreme one. In 2010 the Michigan Economic Development Corporation saw fit to offer a $9.1 million subsidy to a company called RASCO, which promised to create 765 jobs over five years in Flint, Mich.

Keep in mind that state law mandates that the state jobs officials ensure “the plans for the expansion, retention, or location are economically sound.” But, as it turns out, RASCO was apparently invented from thin air from a rented single-wide trailer near Flint and the products it was said to offer may have never existed. But it gets better. The head of the company was actually a convicted felon out on parole. By the terms of his release, he was not even allowed to have a debit card.

This very state government that failed to catch this felon, we are told, is supposed to be able to pick winners and losers in the marketplace and ensure that the plans for the relocation of this alleged business were economically sound. Yet it did not even have the good sense to Google the CEO’s name, Richard Short. If the economic development officials had, they would have seen him profiled in a Flint Journal article about how hard it is for convicted felons to re-enter society.

Just for fun, can anyone here take a wild guess as to how felon Richard A. Short got caught? His parole officer saw him in press coverage of the deal. By the way, that coverage included a press conference with then-Gov. Jennifer Granholm, who unwittingly shared the stage with Short to announce the deal.

As a coda, I can’t help but point out that Short had at least one other scam going on. He apparently stole a pink poodle with a fake check from an employer he claimed as his own, but who had never actually employed him. He presented the check to a dog rescuer along with false power of attorney documents of the elderly dog owner, perhaps with the intention of reselling the poodle at a profit. He went so far as to perpetrate fraud. On a dog. I never learned what became of the dog.

Third, economic development programs encourage rent seeking (a growth retardant) and distort decision-making, turning some market entrepreneurs into political ones. Rent seeking is a fancy way of saying favor-seeking. It describes ways in which business and industry might collect higher “rents” than they otherwise might earn in the private marketplace by seeking subsidies, tax credits and abatements or protectionist tariffs of some sort. Research shows that states with high degrees of rent-seeking have slower rates of real economic growth as measured by state GDP.

Finally, the opportunity costs are high. Cutting taxes for a few politically well-connected firms makes it harder to cut taxes for everyone. By running these programs, states are effectively trying to feed sparrows through a horse. That is, instead of letting sparrows eat seeds of their own collection, the state takes it from them, feeds it to a bureaucratic horse and then forces those sparrows to pick through what comes out the other end for whatever seeds may have survived the journey.

As government analyses of state economic development programs go, the state of Florida runs an impressive shop. The analysts there at least try to measure the next-best alternative foregone, though they define that alternative as a basket of some other government goods, not a broad-based cut to some onerous tax, which they should do to put the true cost of these programs in proper perspective.

In my home state of Michigan, we had a film subsidy program and after its first year the state’s economic development department — the Michigan Economic Development Corporation — hired a contractor to measure the impact of the program. He declared it a big hit and produced lots of positive numbers. The Mackinac Center discovered the consultant left out 100 percent of the costs. Yes, all of them.

Years later, the department hired a different contractor to do an analysis, using the same computer model. This analyst included the cost and found the program to be a net loser. The program cost $500 million before the plug was pulled and apparently did more harm than good.

Most of the evidence — theoretical, empirical and anecdotal — do a little more than suggest that these programs don’t work. Politicians and other apologists for state and local incentive programs may squeal that “we can’t unilaterally disarm,” but in fact the programs were never armament in the first place. Ultimately, these programs are just expensive ribbon cutting ceremonies — or public relations cover — for politicians, funded by their constituents.

A better way to development is to take the “fair field and no favor” approach. People and markets were creating jobs and wealth long before government officials ever thought it should be their responsibility.


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Conservatives and Liberals Rally Support for Repealing Mandatory Life Sentences in Michigan

Senate proposals would complete 15-year effort to end mandatory minimum drug sentencing

A 15-year battle to repeal some of the few mandatory life sentences remaining on the books in Michigan could soon be won as the Legislature considers a package of bills. The issue has seen liberals and conservatives aligned.

Mandatory sentences are different from the typical way courts decide a punishment for a crime. First, let’s describe how sentencing usually works.

In Michigan, which uses a system called “indeterminate sentencing,” every crime on the books carries a maximum penalty that was set by the Legislature at the passage of the law creating the crime. When someone breaks that law, a judge will refer to a book known as the Michigan Sentencing Guidelines to get a sense of what’s considered a proportional penalty for that offense. The judge also will have a report about the specific offender in the case. Using the guidelines, the report, and professional discretion, the judge imposes a minimum sentence. Michigan has a “Truth in Sentencing” policy, which means that the offender will serve every day of the minimum sentence set by the judge (there’s no “credit” for good behavior or self-improvement). The Michigan Parole Board determines whether the offender who has served the minimum sentence should be released. If it says no, that person will have to serve time even longer, even up to the maximum amount set by law.

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But mandatory minimum sentences are different. In those cases, the judge has no discretion when imposing a minimum sentence. The Legislature specifies the minimum the judge must impose. Mandatory minimum sentences were created largely as part of the war on drugs, but some officials say they contribute more to bloated budgets than safer communities. A coalition of liberal and conservative interest groups have circulated a letter supporting the legislation among lawmakers and others in Lansing. It quotes David Morse, who was president of the Prosecuting Attorneys Association of Michigan when mandatory drug minimums came into vogue. He described them this way: “The idea of stiff severe penalties for drug kingpins was a problem because we weren’t getting [them]. … We were getting people who were carrying on behalf of kingpins.”

Michigan repealed most of its mandatory drug minimum sentencing laws in the early 2000s. Now Morse and a coalition of like-minded advocates are urging lawmakers to finish the job. A number of organizations have called for ending mandatory life without parole sentences for drug offenders. They include Families Against Mandatory Minimums, the Citizens Alliance on Prisons and Public Spending, Prison Fellowship, FreedomWorks, Right on Crime, Americans for Tax Reform, Reason and U.S. Justice Action Network. These stakeholders have spoken out in support of two bills that would repeal a mandatory sentence of life without parole for a second conviction of possessing small amounts of certain illegal drugs. The bills would change the punishment for a second conviction from a sentence of mandatory life imprisonment without parole to one that is double the punishment for a first offense.

These are good proposals. One-size-fits-all sentencing policies are an affront to the idea of proportionality of punishment. Mandatory minimum drug sentencing results in the unnecessary and very expensive incarceration of thousands of nonviolent offenders, wreaking havoc on families and local communities. The first waves of drug sentences reforms in this state, which lessened punishments, were followed by a 40 percent overall reduction in crime between 2003 and 2015 and inspired over a dozen states to follow our lead. These latest bills represent the long-overdue completion of Michigan’s leadership on sentencing reforms and a clear step in the right direction on smart criminal justice reform.


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Pension Protestors Should Be 401(k) Supporters

Offering 401(k)-style benefits is good for teachers and taxpayers alike

Taxpayers are paying $2.5 billion more each year than they should for state-mandated school employee pensions. Lawmakers are getting heavy pushback on a bill that would fix this over time. The people that are fighting against this should actually support the effort.

The reason that this pension system is so expensive is that government officials have promised benefits and pushed the costs onto future taxpayers. And those costs have piled up: Taxpayers put $3.2 billion into the system last year. Roughly one out of every seven dollars spent on education in Michigan is spent on the pension system.

Of those costs, 89 percent are not for paying for benefits earned by people working today but rather to catch up on promises made in the past.

That’s not right. Pensions are intended to be prefunded — when an employee earns a pension, the employer is supposed to set aside money to pay for it. The money gets invested, grows, and is used to pay the worker’s pension once retirement comes.

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But government pensions don’t get funded, they get underfunded. The pensions earned by employees will cost $72 billion, according to state estimates. The fund managers have only saved 60 percent of that, leaving a $29 billion gap.

That’s why benefits are so expensive even if they are not especially generous. Lawmakers requires high employee contributions to pay for pensions. It takes 10 years to earn any pension at all, and roughly half the teachers won’t make it that long.

Nevertheless, the plan is expensive due to underfunding. It costs taxpayers 37 percent of employee payroll.

Offering new employees a defined contribution, 401(k)-style retirement system would stop the state from being in this situation over the long term. With a defined contribution approach, lawmakers cannot promise benefits now and pay for them later. The plan under consideration in Lansing would cost taxpayers a maximum of 9 percent of payroll with retiree health care benefits included. That is an improvement, but still high by private sector standards.

The state could save up to $2.5 billion per year when compared to the current costs of the underfunded pension system, perhaps even more if the funding gaps in the legacy plan continue to increase.

Yet even with this savings, the proposed plan would be more generous than the so-called hybrid pension new school employees are set to receive now. Under the current plan, employees put up to 6.4 percent of their payroll and employers put in 3 percent. The proposed plan requires less of employee contributions and more from employers, with 4 percent coming automatically from employers and a dollar-for-dollar 3 percent match available for employees. (Additional retiree health benefits would stay the same.)

An added benefit is that containing the ability to rack up further unfunded liabilities protects the workers in the older system. The ever-inflating unfunded liabilities have caused employers to negotiate salary concessions, and at some point they can jeopardize the solvency of the plan.

That’s why offering new employees 401(k)-style benefits is good for teachers and taxpayers alike. It’s good to see the Legislature considering this.


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House Bill 4184, Restrict local government “phone-in” voting: Passed 96 to 12 in the House

To restrict members of an elected public body casting a vote without being physically present. This would be allowed in one meeting per year per member, if the individual is absent for what other members deem to be good cause. It would also be allowed if a delay on a personnel or infrastructure issue could raise costs or liability.

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Who Voted "Yes" and Who Voted "No"


House Bill 4302, Increase penalty for assaulting court and municipal employees: Passed 93 to 14 in the House

To increase from 10 to 15 years in prison the maximum penalty for an assault on a local government employee or officer that causes a serious injury. The bill was introduced after two Berrien County bailiffs were killed by handcuffed defendant who grabbed a deputy's gun while being escorted to court.

Who Voted "Yes" and Who Voted "No"


House Bill 4612, Extend expansive court cost levies: Passed 85 to 23 in the House

To extend until October 2020 a 2014 law that expanded the costs that can be imposed on an individual convicted in a criminal case so they also include some of the routine costs of operating a court. See also House Bill 4613 (next vote), which addresses the legality of these impositions.

Who Voted "Yes" and Who Voted "No"


House Bill 4613, Investigate restricting expansive court cost levies: Passed 103 to 5 in the House

To create a state commission to recommend changes to trial court funding in light of a Michigan Supreme Court ruling that questioned charging defendants for costs that are unrelated to their case and instead cover routine court and municipal operations.

Who Voted "Yes" and Who Voted "No"


House Bill 4580, Expand scope of MSHDA lending: Passed 103 to 4 in the House

To expand the scope of a state government housing development authority by allowing it to also participate in residential loan refinancing.

Who Voted "Yes" and Who Voted "No"


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.


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