The MC: The Mackinac Center Blog

CapCon Wins Journalism Awards

Michigan Press Association winners announced

Michigan Capitol Confidential staff won three awards in the 2014 Michigan Press Association’s “Better Newspaper Contest.”

Former Managing Editor Manny Lopez won a second place and an honorable mention in the headline writing category, while Jarrett Skorup, digital engagement manager, and Tom Gantert, senior capitol correspondent, took third place in enterprise reporting for their work on Michigan’s film subsidy program.

The judges remarked that the reporting by Skorup and Gantert was a “Solid outlining of various aspects of wasted government money.”

The second place headline winner was for “Reuben Sandwich with a Side of 500k Lost Jobs,” which dissected how local media covering an April visit by President Barack Obama to an Ann Arbor deli to campaign for a higher mandated minimum wage went into great detail about what the president ordered while ignoring a report that the increase could result in 500,000 lost jobs.

Judges said “This headline did an excellent job of characterizing the media’s reaction to the subject matter. Well played.”

The honorable mention headline was for “Barber Bill Barely Takes Anything off the Top,” a column regarding Michigan’s licensing regime — including a proposed decrease in the number of hours it takes to get a barber’s license.

Judges said it was a “Great use of pun to describe the situation at hand.”

Capitol Confidential won two MPA awards in 2013 and four awards earlier this year from the Detroit Chapter of the Society of Professional Journalists.

Checking the Facts

Brighton union, district agree with Center on facts

The Mackinac Center Legal Foundation announced today that Brighton Area Schools and the local union “have removed illegal language from a contract in response to a lawsuit filed on behalf of a Brighton High School teacher who said the union and district were violating his freedoms under Michigan’s right-to-work law.”

The union president for the Brighton Education Association blasted the lawsuit when it was filed last week.

"It would behoove Mr. Neuman and the Mackinac Center to check their facts before filing and publicizing this lawsuit that is 100 percent untrue," Ellen Lafferty told the Livingston Daily Press & Argus.

Mr. Neuman and our Mackinac Center attorneys did check their facts. The district and union now agree with the facts and have removed the illegal language from the contract, via a letter of agreement titled “clarification on union dues” signed by Ms. Lafferty.

Senate Votes to Continue Film Subsidies

Will House put Michigan residents above Hollywood actors?

Michael Moore received over $840,000 from Michigan taxpayers to make a film (image via David Shankbone at Wikicommons).

The Michigan Senate passed a bill yesterday that gets rid of the sunset provision for the state’s film incentive program, meaning the subsidies are set to continue beyond 2017. Senate Bill 1103 also removes a clause that previously capped the amount taxpayers would spend on highly paid out-of-state workers (such as actors, directors and producers), which is currently set at $540,000.

Mackinac Center experts have railed against the subsidy program because it has cost nearly half a billion dollars, but resulted in no new jobs, takes money away from other projects that better serve the public and is widely recognized as one of the poorest ways for states to spend tax dollars.

Joe Henchman is the vice president of state projects for the nonpartisan Tax Foundation. He was in Michigan recently to give an award to Gov. Snyder for tax reform and was asked by MIRS News about the film credit program.

“These states (with film incentive programs) are essentially writing checks to Hollywood — which is one of the most profitable industries in America — for what amount to transient jobs that don’t last very long,” Henchman said.

He expands upon this in a blog on the Tax Foundation website:

A big reason why Michigan pared the program back was a 2010 state-commissioned study that found the incentives cost $117 million and created 1,039 full-time equivalent jobs, for a cost of $112,800 per new job. Due to the nature of the film industry, most of the jobs are temporary and transient, with production companies using out-of-state labor to fill many positions.

Since then, California has tripled its film credit spending to over $300 million per year, and New York is over $400 million per year. To do battle with these states requires writing enormous checks to one of the most profitable industries in America. I would think Michigan has bigger priorities for its tax dollars than handouts for Hollywood.

SB 1103 now heads to the House for consideration. Members of the GOP-dominated chamber have a decision on whether they will stand by their previous support for ending the program, or take a vote to continue it indefinitely.

Free the Food

Cottage food industry regulations need revamp

Farmers' markets often sell cottage foods (image via WikiCommons).

“Aunt Karen, your homemade salsa is so good. You should bottle it and sell it!”

You’ve probably said something similar to a relative, friend or neighbor. And this is how many food companies get started – a recipe of homemade hard work, a pinch of encouragement and a healthy dose of risk-taking.

But in Michigan, it is harder for some food entrepreneurs to get started than others, as the state regulates this so-called cottage food industry in a seemingly arbitrary way.

State law does exempt anyone who sells less than $20,000 worth of homemade food from the mountains of regulations, rules and licensing requirements the state heaps on food producers. But this applies to makers of only certain types of food. (And this does not pertain to pet food. To make and sell that, of course, you'll need a license.)

According to Forrager.com, a website devoted to the cottage food industry, Michiganders can make and sell cherry and pecan pies, but not pumpkin or sweet potato. You can roast coffee beans and sell them, but you can’t add water and sell the resulting coffee. Most jams, jellies, nut butters and vinegars are okay, but ketchup, mustard, relish and salsa are prohibited. Finally, you can sell chocolate-covered strawberries, but not…strawberries.

Other seemingly random rules apply to cottage food producers. For instance, food producers cannot sell their food over the Internet – all sales must be done person-to-person. It’s also not allowed to donate your food to someone else who might give it away or sell it. You can, apparently, donate food to someone who just wants to eat it, though. How any of this protects consumers is not clear.

Finally, food may only be produced in a person’s “primary residence,” meaning you’d be breaking the cottage food law if you sold food cooked in the kitchen of your cottage (irony intended).

Public health concerns might explain some of these rules, but these concerns don’t manifest themselves in face of these capricious rules. Regardless, homemade food producers sell such small quantities that it’s unlikely they would ever pose a significant threat to public health. Further, the regulations and licensing mandates required of larger food producers do not eliminate the possibility that they could threaten public health anyway.

Texas recently relaxed its cottage food industry regulations, and witnessed food entrepreneurs from all over the Lone Star State create thousands of new small businesses. Michigan policymakers should consider doing the same and revisit our cottage food industry laws.

(After this, maybe we can reassess the threat that unlicensed dog biscuits might pose to public health.)

Michigan Education Digest

Charter school success, MEA politics

The new issue of Michigan Education Digest is now available. Topics include charter public school success, Flint’s self-created overspending crisis and MEA politics.

Center Research Cited in Daily Caller

Corporate welfare continues to grow

Mackinac Center research, particularly this piece by Senior Legislative Analyst Jack McHugh and Assistant Director of Fiscal Policy James Hohman, is featured in a story by The Daily Caller about corporate welfare.

You can read more about the Center’s work on corporate welfare here.

While the Legislature is on a campaign season break from voting, the Roll Call Report continues a series reviewing key votes of the 2013-2014 session.

House Bill 4001, Cap FOIA charges and increase government FOIA scofflaw penalties: Passed 102 to 8 in the House on March 20, 2014

To cap the costs a government body may charge to fulfill a Freedom of Information Act request, and increase the penalty for a unit of government wrongfully denying an open records law request. The bill was referred to the Senate Government Operations Committee on March 25, where it remains.

Who Voted "Yes" and Who Voted "No"

House Bill 5574, Give $195 million bankruptcy grant to Detroit: Passed 74 to 36 in the House on May 22, 2014

To grant $194.8 million to Detroit, to be applied toward a proposed bankruptcy settlement.

Who Voted "Yes" and Who Voted "No"

House Bill 5492, House road repair bills: Passed 91 to 18 in the House on May 8, 2014

To earmark a portion of state use tax revenue to roads. Reportedly this would generate around $250 million annually for repairs. Along with several other House-passed bills this would increase road funding by around $500 million annually, with only a small amount from increased taxes and fees. The Senate did not take up this package, instead voting on and defeating measures increase fuel taxes by $1.2 billion.

Who Voted "Yes" and Who Voted "No"

House Bill 5255, Authorize eminent domain for oil well CO2 pipelines: Passed 69 to 41 in the House on February 13, 2014.

To extend the state law authorizing eminent domain takings for gas, oil and other pipeline easements, so it also includes pipelines carrying carbon dioxide used to produce hydrocarbons in secondary or “enhanced recovery” operations.

Who Voted "Yes" and Who Voted "No"

House Bill 4369, Codify “education achievement authority” for failed schools: Passed 56 to 54 in the House on March 20, 2014

To codify in statute the authority of a state “education achievement authority” tasked with reforming public schools whose performance is in the bottom 5 percent for two consecutive years. Not more than 50 schools could eventually be subject to this office's authority, and their management could be transferred to a charter school, or another conventional school district. The Senate earlier passed a more rigorous proposal, and has not taken up this version.

Who Voted "Yes" and Who Voted "No"

Senate Joint Resolution V, Call for U.S. balanced budget amendment convention: Passed 77 to 32 in the House on March 20, 2014

To submit an application to Congress calling for a "convention to propose amendments to the U.S. Constitution," limited to proposing one that prohibits the federal government from spending more in any fiscal year than it collects in tax and other revenue (balanced budget amendment). Legislatures representing two-thirds of the states must request this to get a convention, and three-quarters of the states must approve any amendment proposed by an “Article V” convention for it to become part of the constitution.

Who Voted "Yes" and Who Voted "No"

House Bill 5108, Repeal ban on ticket scalping: Passed 66 to 42 in the House on February 27, 2014

To repeal a state law that bans ticket “scalping” at sports and entertainment events, or selling tickets at a higher price through some service or agency. The Senate has not taken up this bill.

Who Voted "Yes" and Who Voted "No"

House Bill 5414, Phase-out “driver responsibility fees”: Passed 108 to 0 in the House on May 21, 2014

To phase-out the so-called “driver responsibility fees” (a.k.a. “bad driver tax”) imposed for certain traffic violations, which were originally adopted in 2003 to avoid spending cuts in that year’s and subsequent state budgets.

Who Voted "Yes" and Who Voted "No"

House Bill 5168, Facilitate DARTA operating Woodward streetcar: Passed 82 to 26 in the House on June 5, 2014

To eliminate restrictions on the Detroit area regional transportation operating a Woodward Avenue streetcar in Detroit.

Who Voted "Yes" and Who Voted "No"

House Bill 5255, Authorize eminent domain for oil well CO2 pipelines: Passed 25 to 13 in the Senate on March 18, 2014

The Senate vote on the bill described above.

Who Voted "Yes" and Who Voted "No"

Senate Joint Resolution V, Call for U.S. balanced budget amendment convention: Passed 26 to 12 in the Senate on November 7, 2013

The Senate vote on the measure described above.

Who Voted "Yes" and Who Voted "No"

House Bill 5414, Phase-out “driver responsibility fees”: Passed 37 to 0 in the Senate on June 12, 2014

The Senate vote on the bill described above.

Who Voted "Yes" and Who Voted "No"

House Bill 5168, Facilitate DARTA operating Woodward streetcar: Passed 32 to 6 in the Senate on June 11, 2014

The Senate vote on the bill described above.

Who Voted "Yes" and Who Voted "No"

House Bill 5477, Impose higher gas tax: Failed 17 to 21 in the Senate.

To phase in a diesel and gas tax increase of more than $1 billion over five years. This was a "trial" vote a much more costly road package than the one passed by the House (described above), which the Senate did not take up.

Who Voted "Yes" and Who Voted "No"

House Bill 5574, Give Detroit $195 million bankruptcy grant: Passed 21 to 17 in the Senate on June 3, 2014

The Senate vote on the bill described above.

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.

BEA President Unsure What Her Contract Says

Center attorney explains it

Patrick Wright, vice president for legal affairs, explained in the Livingston Daily Press & Argus why the president of the Brighton Education Association is wrong about a lawsuit filed by the Mackinac Center Legal Foundation against the union on behalf of a Brighton High School teacher.

The MCLF filed the suit Wednesday on behalf of Adam Neuman against the BEA and the Brighton Area Schools Board of Education for violating his right-to-work freedoms. A contract between the union and district says all members of the bargaining unit, via payroll deduction, must pay for the union’s release time (time allotted union officials to conduct union business during work hours). Michigan’s right-to-work statute, however, says anyone who has opted out of a union is under no obligation to financially support it.

Ellen Lafferty, BEA president, told the Livingston Daily that she thinks only members of the union must pay for the release time.

“Since he is not a member of the association due to him opting out in August, this language does not pertain to him,” she said.

State law, however, forces even those who opt out of a union to remain a member of the bargaining unit.

Wright said Lafferty’s claim is “irrelevant” based on what the contract says. Any payroll deduction by the district on the union’s behalf would also be illegal under Public Act 53 of 2012, including any deduction from the paychecks of those still in the union.

Wright also told the newspaper that the union and district need to change the language in the contract and if “it’s done to our satisfaction, this lawsuit will probably go away fairly fast.”

Media Coverage of Center's Latest Lawsuit

Brighton teacher sues union, school board

The filing of a lawsuit by the Mackinac Center Legal Foundation on behalf of a Brighton High School teacher against his union and school district for violating his right-to-work freedoms is gaining state and national media attention.

Adam Neuman is suing the Brighton Education Association and the Brighton Area Schools Board of Education because after opting out of union membership, he does not believe he should have to pay money via payroll deduction to support the union’s “release time,” allowing union officials to conduct union business during school hours.

Fox News has covered the case, as has the Livingston Daily Press & Argus and WHMI-FM93.5 in Howell. Reason has also written about the case. Neuman and Patrick Wright, vice president for legal affairs at the Mackinac Center for Public Policy, also appeared on “The Frank Beckmann Show” on WJR AM760.

Film jobs in Michigan (click to enlarge).

Five years and $500 million later, Michigan has fewer film jobs than it did when the state started its subsidy program.

According to the federal Bureau of Labor Statistics, Michigan had 1,561 film jobs in 2013 (the latest year information is available). In 2008, the state had 1,663 film jobs. See chart nearby.

Michigan currently spends $50 million per year subsidizing film productions. Previously, the program was uncapped – in 2010-11, the state spent $115 million. Overall, as of this year, taxpayers have devoted $494.7 million to the program.

Because film productions are so mobile, among other reasons, the economic analysis of incentive programs is overwhelmingly negative – from researchers on the left and the right.

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See also:

Housing Expenses Among the Perks Michigan Residents Pay For Big Hollywood

Batman and Superman vs. Taxpayers

Record Profits For Warner Bros. Doesn't Stop State From Giving Company Huge Subsidy 

Five Reasons Government Subsidies For Films Are A Bad Idea

Film Incentives: The $50 Million Sequel

Public Employee Pension Systems Raided To Pay Film Studio Bills

Big Hollywood Bailout: Taxpayers Spent Nearly $40 Million To Subsidize Disney's 'Oz'

Cost of Film Program Could Repair Over 5 million Potholes