Pension liabilities still a looming problem
A new survey of communities from the Center for Local, State and Urban Policy at the University of Michigan shows an uptick in the percent that say they are better able to meet their fiscal needs. This is good as it generally tracks with an improving state economy, but there are some warning signs ahead.
The survey notes, “For the first time in six years, more Michigan communities report that they are better able to meet their fiscal needs this year than those who say they are less able to do so.” (See chart nearby.)
This pushes back a bit against the frequent claims that local municipalities are “starving” for revenue. A full look at the numbers shows that revenue for local governments has stayed relatively stable, even amid the economic “lost decade” in Michigan. As noted in a recent CapCon article:
Local municipalities saw an increase of $1.4 billion in property taxes from 2000 to 2013 with that revenue increasing to $5.3 billion in 2013 from $3.9 billion in 2000, according to the state tax commission.
The municipalities received about $1 billion more in property tax in 2008 compared to 2000 with inflation factored in. By 2009, the property taxes collected had reduced to the point they were relatively the same as 2000 with inflation.
But many local governments will be facing ongoing fiscal problems. In cities, counties and townships around the state, retirement liabilities are eating into budgets. Some public entities are confronting this head on while others are putting off the problems for future elected officials (or unelected if the fiscal problems get too bad).
So while many local units haven’t seen a collapse in revenue, there has been a shift in where that money is going — often from public safety and parks to the liabilities of former employees. Those communities that confront this head on will be in better shape in the years ahead.
What rhymes with "that's not your job"?
Maybe it’s something in the water. In recent weeks Lansing politicians have proposed laws mandating an official poem for Michigan and forcing taxpayers to buy a state flag for the survivors of current or former legislators when they die. Now comes yet another piece of institutional grandiosity: a bill to create an official state poet laureate.
Never mind pension underfunding and damaged roads, to name two issues crying out for legislative solutions; members of our full-time Legislature seem to have both the time and the sense of entitlement to designate an official state poet.
Alas, given the usual political incentives, were the measure to become law (unlikely) the candidates would probably sound less like the ancient Greek Homer of “Iliad” and “Odyssey” fame and more like a modern namesake — Homer Simpson. Doh!
The Michiganvotes.org description of House Bill 5853* reads:
Introduced by Rep. Sarah Roberts, D-St. Clair Shores, on Sept. 23, 2014, to authorize the appointment by the governor of a state poet laureate, who would serve at the pleasure of the governor (meaning the governor could withdraw the appointment at any time). The bill authorizes no compensation, but does allow government money to be used to reimburse the individual’s travel expenses.
According to Wikipedia, the first such poet positions were created in Europe in the 1300s. The tradition started in Italy but it exists in other nations as well, including within the United States federal government and several of its independent states.
That’s no excuse though: As mom often told us, “Just because Johnny does something foolish doesn’t mean you have to do something foolish.”
Alas, these latest examples of legislative self-absorption are hardly new or unique. An earlier version of that flag bill in 2009 would have required a State Police escort for deceased legislators’ final ride to their grave. State politicians have named public highways, laws, buildings and other state assets after each other.
The political incentives for such institutionalized self-glorification — the desire of political careerists to avoid ever having to return to the private sector — also explains fluff bills intended to associate politicians’ names with symbols dear to certain interest or affinity groups. Examples include bills to establish an official state Scottish Tartan (see the video testimony here), enshrine in statute that Iosco County (and no other county!) shall be the “birding capital” of Michigan, or resolve the simmering controversy over which frog shall henceforth and always be the official state amphibian.
While a constitutional amendment prohibiting such puffery and self-promotion is probably excessive, residents should certainly not reward such behavior with any response other than hisses and sneers.
Lansing politicians should stick to their knitting: Protect residents and their property; provide efficient courts to adjudicate contractual disagreements, provide other true public goods and otherwise just stay out of the way.
Now there’s a concept worthy of a poem.
*The measure has 12 Democratic cosponsors and one Republican, Rep. Al Pscholka, who also is maneuvering to be the next Speaker of the House. The Democrats are Reps. Rashida Tlaib, Jon Switalski, Henry Yanez, Scott Dianda, Jeff Irwin, Tim Greimel, Tim Kelly, Marcia Hovey-Wright, Adam Zemke, Sam Singh, Andrew J. Kandrevas and David Rutledge.
Indiana toll road privatization
A 2006 deal to privatize Indiana’s toll road for $3.8 billion that is in jeopardy now that the company has declared bankruptcy was designed to protect the state’s taxpayers, Fiscal Policy Director Michael LaFaive told Fox News.
“The deal was designed to protect the state of Indiana,” LaFaive said. “If they go belly up, the state could get it back if it’s not sold to another group. The worst case scenario would be that creditors would get control.”
Either way, Fox reports, the state will keep all of the money it has received so far.
Legislation seeks to protect workers from unions
The Employee Rights Act, designed to protect workers from unions, could gain traction if Republicans win the U.S. Senate next month, according to Labor Policy Director F. Vincent Vernuccio.
“(President) Obama will probably veto it,” he told The Washington Examiner. “However, the more the public hears about the common-sense reforms in the ERA, such as criminalizing union threats and violence, the more pressure will be brought on Democrats if the legislation is brought back under a Republic president.”
Drugged driving, automatic police pay hikes, "right to try"
House Bill 5785, Expand permissible criminal court cost levies: Passed 37 to 0 in the Senate
To expand the costs that can be imposed on an individual convicted in a criminal case. The bill would authorize imposing assessments covering a share of court employee salaries and benefits, of “goods and services” used in operating the court, and of court building “operation and maintenance" costs. In addition, it would establish that a court has no duty to provide a “calculation of the costs involved in a particular case.” The bill reverses a state Supreme Court case that limited charges to those specifically allowed in a particular statute; its provisions would expire in 36 months, presumably to allow the legislature to rationalize these impositions for all courts across the state.
Senate Bill 1074, Eliminate debt cap on business job training subsidy program: Passed 37 to 1 in the Senate
To eliminate the $50 million debt cap in a 2008 law that authorized state job training subsidies for particular employers, provided through community colleges. The bill would also eliminate a 2018 sunset on these subsidies, which according to the Senate Fiscal Agency have added up to $10.7 million since the law was passed.
House Bill 5097, Exempt public safety employees from ban on certain automatic pay hikes: Passed 25 to 12 in the Senate
To exempt law enforcement and fire department employees from a 2011 law that banned automatic seniority-based pay hikes for individual government employees (“step increases”) when a union contract has expired and no new one signed.
House Bill 4624, Allow multi-department firefighter employment: Passed 21 to 17 in the Senate
To prohibit a fire department from prohibiting its firefighters from also working as a volunteer, part-time or paid on-call firefighter with another department, if this does not conflict with the original employment. Also, to make this issue a prohibited subject of collective bargaining between a fire department and a government employee union.
House Bill 5385, Expand drunk driving provisions to include illegal drugs: Passed 35 to 0 in the Senate
To expand the law that requires a person stopped for drunk driving to take a breathalyzer or field sobriety test so that it instead refers to "a preliminary roadside analysis," expanding this law to suspected driving while drugged cases. The bill would not explicitly authorize the use of a roadside saliva test for marijuana, which has been challenged as inaccurate. This is part of a package extending the same or similar procedures to both drunk and drugged driving cases.
House Bill 5606, Expand "protectionist" auto dealer provision: Passed 38 to 0 in the Senate
To prohibit vehicle makers from preventing a dealer from tacking on extra fees that are permitted by a law that empowers the state to enforce exclusive new car dealer “territories” and regulate the terms of commercial relationships between dealers and manufacturers.
Senate Bill 991, Let terminal patients try non-FDA approved treatments: Passed 109 to 0 in the House
To establish that a person diagnosed with a terminal illness has a “right to try” experimental drugs or therapies not approved by the federal Food and Drug Administration, subject to various conditions specified in the bill. The bill would prohibit state officials from interfering, and ban licensing boards from sanctioning health care providers who participate, subject to specified conditions. Drug makers who comply with the specified conditions would be immune from liability if the patient is harmed. The bill responds to criticism that FDA “safe and effective” standards are not appropriate in these cases.
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.
Even from the grave
Members of the political class here and elsewhere have a reputation for always taking care of their own. Chasers of public office may wax eloquent about their selfless “public service,” but the truth is that no one checks their self-interest at the doors of the Capitol.
Elected officials maximize their own interests in a number of ways: pay, prestige, perquisites and more. Under term limits, perhaps the highest priority of the political careerists who populate the Legislature is paving the way for their next elected or appointed job when they are termed-out of their current one. Toward this end, they are often willing to demonstrate loyalty to the system by glorifying it along with their current and former colleagues.
For example, House Bill 5843 would create a “Legislative Funeral Act” to require the state of Michigan (that is, taxpayers) give a state flag to the survivor of current or former state legislators who die.
Michigan state lawmakers are already some of the best paid in America and can easily buy their own flag. That’s not the real point of the bill, however. Rather, it is to puff up the importance of the statewide political elite to which they currently belong, in pursuit of remaining a member even after they are termed-out of their current slot.
The bad news with this bill is that it actually has 61 sponsors. The good news is that while it is modeled on a similar measure introduced in 2009, unlike that proposal this one does not require that taxpayers pay for a State Police escort for the funeral processions of current and former legislators. Both bills featured a large number of co-sponsors from both parties. (One of the earlier bill’s freshman co-sponsors publicly apologized for his rookie error in political judgment.)
The “Legislative Funeral Act” measures are hardly the only bills introduced by Lansing politicians to immortalize their own. Former state lawmakers Dominic Jacobetti and Harry Gast have stretches of roads named after them. Former Sen. Glen Steil Sr. (father of former Rep. Glen Steil Jr.) has a law named for him, and the name of a former higher education appropriations chairman, the late Rep. Morris Hood Jr., decorates an education-related program.
In 2012, state Sen. Gretchen Whitmer offered an amendment to Senate Bill 534 which would rename the proposed law the “John J. Gleason gift of life plate” after the very politician who introduced the law in the first place. The amendment and law were both adopted.
The attempts to glorify a current or recent legislator don’t always fly, such as one state senator’s amendment to name a property-rights infringing business and restaurant smoking ban after a current colleague, Sen. Ray Basham, which failed by voice vote. Nor does it matter that most Michigan residents will never recognize the former politician names attached to roads, buildings, programs, laws, etc. As mentioned, these measures are about serving a state and local political system to which these political careerists are desperate to remain attached, and have little to do with the general public.
The dignity of that system — such as it is — may need some institutional guardrails against the self-serving excesses of its members. At the very least a politician should have to be dead before former colleagues start naming things after him or her. Preferably for a good long time, like say 50 years. Only with the fullness of time can the people and elected officials acquire some needed perspective on the real value of a particular politician’s contributions.
One from Hillsdale, one from MSU
The Mackinac Center welcomes two new academics with strong Michigan ties to its Board of Scholars. Members of this board write for the Center, review its publications, and provide other consultation and guidance. The two new scholars are Michael J. Clark of Hillsdale College and Ross B. Emmett of Michigan State University's James Madison College.
Dr. Clark received his Ph.D. in economics from George Mason University in 2011. He is currently an assistant professor in economics, and due to his high teaching evaluations, the current Wallace and Marion Reemelin chair in free market economics at Hillsdale.
Dr. Emmett is a professor of political economy and theory and constitutional democracy. A historian of economic thought, his work is concerned with the constitutional political economy of a free society and the enhancement of the bourgeois virtues that support it. He is currently writing a biography of the University of Chicago economist Frank H. Knight.
Legislators turn their backs on students
Last spring, the Michigan House passed a bill to gut a 2011 reform establishing a rigorous, empirical teacher rating system based on how students in an educator’s classroom actually perform on state tests. Related 2011 reforms raised the stakes by basing teacher “tenure” and other school employment decisions on these ratings.
Specifically, the House-passed 2014 legislation reduced actual student results on state tests to just 20 percent of a teacher’s rating, with the remainder based on local measurements whose “rigor may vary” according to the MichiganVotes.org description. The Senate went even further, essentially repealing the standards and punting to a system to be determined later. The House concurred with this approach and the repeal was signed into law by Gov. Rick Snyder last June.
The change represents a policy victory for politically powerful teacher unions who want to insulate their members from real accountability. The likely impact was explained in a recent Wall Street Journal op-ed by former New York state Superintendent of Schools Marc F. Bernstein describing the perverse outcomes of that state’s failed teacher rating system, the key feature of which is remarkably similar to the system approved by the Michigan House earlier this year. He writes:
“According to the New York State Education Department, state law requires that 60% of a teacher's rating be based on classroom observations and other measures agreed upon at the local level through collective bargaining with the union. Another 20% is based on student performance on grades 4-8 statewide math and reading tests or ‘locally determined student learning objectives.’ The remaining 20% is again based on ‘locally determined’ objective measures as bargained between school management and teachers unions.”
Mr. Bernstein also explains why “local” measures of teacher quality are almost guaranteed to be highly compromised:
“School culture strongly frowns upon administrators rating teachers as less than satisfactory. Most elementary schools have fewer than three- or four-dozen teachers; they constitute a family with members supporting one another regardless of deficiencies. Fellow teachers are well aware when colleagues have personal issues that might diminish their effectiveness, and they expect administrators to compensate by being generous in their evaluations...Moreover, how can administrators explain to parents that their children have teachers rated ineffective but who remain in the classroom?”
And the former New York state schools chief reports that he wasn’t surprised by the perverse outcome this generated:
“New York recently released evaluations that rank 95% of the state's teachers as "highly effective" or "effective," 4% as "developing," and only 1% as "ineffective" for the 2012-13 school year. Never mind that more than half of the state's students in grades 4-8 weren't proficient in reading and math, according to statewide test scores.”
Disappointingly, many of the Michigan House and Senate members who voted this year to gut rigorous teacher rating standards are the same people who enacted them in 2011.
You can see exactly how each legislator voted in the links below.
(VoteSpotter, the Mackinac Center’s new app, lets you track votes like these and give instant feedback to your legislators about how they voted.)