The MC: The Mackinac Center Blog

Statewide Media Cite Center on Prop 1

Personal property tax issue on Aug. 5 ballot

An Associated Press story about the upcoming Proposal 1 on the Aug. 5 primary ballot cites a recent policy brief written by James Hohman, assistant director of fiscal policy, which shows the measure could be up to a $500 million tax cut.

The story appeared in Crain's Detroit Business, Traverse City Record-EagleBattle Creek Enquirer, Port Huron Times-Herald, Lansing State Journal, Grand Haven Tribune, Cadillac News and Midland Daily News. It was also cited in this online "editorial board" discussion at MLive.com.  

Lansing political newsletters MIRS and Gongwer earlier covered the policy brief.

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

House Bill 4714, Approve Medicaid expansion: Passed 76 to 31 in the House on June 13, 2013

To expand Medicaid eligibility to families and childless adults up to 138 percent of the federal poverty level, which implements a key component of the federal health care law.

Who Voted "Yes" and Who Voted "No"

House Bill 4668, Increase hunting and fishing license fees: Passed 77 to 32 in the House

To increase hunting and fishing license fees, and revise the fee structure. The cost for a resident to hunt deer would go from $15 to $31, and the minimum fishing license cost would increase from $15 to $26. The House Fiscal Agency reports this would extract an additional $19.7 million annually from sportsmen. This was one of several fee increases enacted in connection with setting state spending levels for the next fiscal year.

Who Voted "Yes" and Who Voted "No"

House Bill 4665, Increase landfill tipping fees: Passed 62 to 47 in the House on June 5, 2013

To extend until Sept. 30, 2015 a “temporary” increase from 7 cents to 12 cents on the per-cubic yard state “tipping fee” tax imposed on dumping in landfills, which was authorized by a 2011 law. This was one of several fee increases enacted in connection with setting state spending levels for the next fiscal year.

Who Voted "Yes" and Who Voted "No"

House Bill 4664, Allow pension double-dipping by some “retired” prison workers: Passed 58 to 51 in the House on June 5, 2013

To repeal a Sept. 30, 2013 sunset on a 2012 law that “temporarily” allowed retired prison employees to simultaneously collect pension benefits and a regular paycheck for going back to work in a prison. Under current law, prison guards can retire and begin collecting pension checks as young as age 51 in some cases.

Who Voted "Yes" and Who Voted "No"

House Bill 4813, Establish procedures for dissolving fiscally failed school districts: Passed 58 to 49 in the House on June 13, 2013

To establish criteria and procedures for dissolving a school district that has become so financially unviable that it can no longer educate students, and for attaching the failed district’s territory to one or more nearby school districts. The bill was introduced after the Buena Vista and Inkster school districts reached this state shortly before the end of the 2012-2013 school year.

Who Voted "Yes" and Who Voted "No"

House Bill 4529, Establish and impose minimum indigent defense standards: Passed 101 to 6 in the House on June 13, 2013

To establish statewide standards and accountability measures for court-appointed attorneys who represent indigent criminal defendants, and establish a process by which all counties in the state would be required to conform with the standards. The bill authorizes state grants to counties to cover increased costs.

Who Voted "Yes" and Who Voted "No"

House Bill 4668, Increase hunting and fishing license fees: Passed 24 to 14 in the Senate on June 19, 2013

The Senate vote on the fee increase bill described above. This was signed into law on September 17, 2013.

Who Voted "Yes" and Who Voted "No"

House Bill 4665, Increase landfill tipping fees: Passed 20 to 18 in the Senate on June 18, 2013

The Senate vote on the fee increase bill described above. This was signed into law on June 25, 2013.

Who Voted "Yes" and Who Voted "No"

House Bill 4664, Allow pension double-dipping by some “retired” prison workers: Passed 20 to 18 in the Senate on June 18, 2013

The Senate vote on the bill described above. The Senate extended the double-dipping authorization for two years rather than making it permanent. This was signed into law on September 24, 2013.

Who Voted "Yes" and Who Voted "No"

House Bill 4813, Establish procedures for dissolving fiscally failed school districts: Passed 20 to 18 in the Senate on June 19, 2013

The Senate vote on the bill described above. This was signed into law on July 2, 2013.

Who Voted "Yes" and Who Voted "No"

House Bill 4529, Establish and impose minimum indigent defense standards: Passed 33 to 4 in the Senate on June 19, 2013

The Senate vote on the bill described above. This was signed into law on July 1, 2013.

Who Voted "Yes" and Who Voted "No"

House Bill 4714, Approve federal health care law Medicaid expansion: Passed 20 to 18 in the Senate on August 27, 2013

The Senate vote approving the federal health care law Medicaid expansion. This was signed into law by Gov. Rick Snyder on September 16, 2013.

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.

Sentencing Reforms Could Save Tax Dollars

Council of State Governments issues recommendations

All criminal justice systems face competing tensions of protecting public safety while not overburdening taxpayers, and Michigan’s is no exception. Calls to reduce financial costs often face scrutiny on the grounds of potentially compromised security. In a Lansing hearing on July 1, which I was able to attend, the Council of State Governments brought to Michigan several suggestions related to criminal sentencing, claiming that these policy changes could ease the financial burden on taxpayers while simultaneously maintaining or even improving public safety.

The Council advocates for the greater use of “supervision terms” as part of criminal sentences, with close monitoring of parolees to help prevent re-offense. Time spent outside of a prison or jail costs the state substantially less than time spent inside, and also eases the transition of criminals back into the society of their home communities. In addition, standardizing and codifying parole practices as much as possible makes it easier to predict prison populations. Under the current system, with many parole decisions left to boards which are given wide discretion, prison populations fluctuate dramatically (page 24) even as criminal convictions hold steady.

To further promote consistency on criminal sentencing, the Council recommends the reduction or elimination of “straddle cells” (page 13) in Michigan’s sentencing system. These cells correspond to offenders in particular circumstances who could legally receive jail or prison time, but whom the judge could let off with only a fine or probation, according to his or her discretion alone. The Council maintains that due to the incredible disruptive effect which even short jail terms can have on a person’s life, the law must be made explicit as to which crimes merit incarceration and which do not.

All parties to the current discussion over criminal sentencing reform recognize recidivism (page 48) as a major detriment to both public safety and public finances, but often hold conflicting ideas regarding addressing this problem or even defining it. The Council calls for Michigan to focus its resources on proven criminal re-entry programs for both current prisoners and the recently released, and to pull funding from those without a good track record of reducing recidivism. Increased counseling and programming available for probationers, convicted of relatively minor crimes, could also help in the fight to prevent repeat offenses and potential escalation.

The Michigan Law Revision Commission will consider these recommendations over the coming weeks. The Mackinac Center has previously commented on other potential savings to be found in the corrections budget via reducing employee costs and looking into privatization.

Hohman to talk at 'Detroit Rising' Panel Friday

Also, how "progressive" policies damaged the city

James Hohman, assistant director of fiscal policy, will participate in a panel discussion from 8:30 to 10 a.m. Friday as part of an event titled “Detroit Rising.” The two-day event, sponsored by the Manhattan Institute and State Budget Solutions, kicks off Thursday at 5 p.m. with a panel discussion titled “How the Motor City is Rebuilding and Returning to Greatness.” Friday’s session is titled “Learning from Detroit: Hope for Cities on the Brink.” Both panels will be streamed live.

Also in Detroit this weekend is an event known as “Netroots Nation,” self-described as a “big family reunion for the left.” One progressive Michigan website, ironically, carries this headline about the gathering: “We’re in Detroit. It’s going down.”

You can read about the “triumph” of progressive policies in Detroit here.

Pension Malpractice and Fund Raids

Everyone's doing it!

A Wall Street Journal editorial bemoans gimmicks used to “pay for” a federal road funding bill without either raising taxes or cutting other spending, which was passed by the U.S. House of Representatives yesterday:

“Ways and Means Chairman Dave Camp is paying for the additional spending with a combination of new custom fees, transfers from a fund to repair leaky underground fuel-storage tanks, and changes to pension taxes. This "pension-smoothing"—which will supply $6.4 billion of the revenue—is an especially ugly budget ruse, and thus increasingly a Congressional favorite.

“Under smoothing, employers are given permission to delay contributions to pension plans, thereby increasing corporate taxable income. That pushes immediate money to the Treasury, but at the cost of piling up pension liabilities in the longer-term, hurting employees and potentially the taxpayers who might have to bail them out. Congress used the same imaginary revenue-raiser to fund the 2012 highway bill, and the Members know most of the media won't report the boring pension details.”

Congressman Camp served one term in the Michigan House of Representatives back in 1988-1990, and as a Congressman perhaps he’s been looking to the gang at his old gig for bad ideas, because both the pension dodge and the raid on a fuel tank cleanup fund have both featured in the Michigan Legislature’s playbook over the past decade, as documented by MichiganVotes.org:

2004 House Bill 6074: Fuel tank cleanup tax "fund raid"
Public Act 390 of 2004

To extend the 7/8ths cent-per-gallon fuel sale "regulatory fee" (tax) levied for the cleanup of underground fuel tanks, and authorize a $43 million "fund raid" on the underground tank cleanup fund to avoid making spending cuts in the 2005 budget.

Passed 87 to 13 in the House on July 14, 2004 - Who Voted "Yes" and Who Voted "No"

Passed 32 to 5 in the Senate on September 29, 2004 - Who Voted "Yes" and Who Voted "No"

Signed by Gov. Jennifer Granholm on October 12, 2004.

2007 House Bill 4530: Balance budget with reduced school pension fund contribution
Public Act 15 of 2007

To allow a one-time revision in the formula used by the school employee pension fund to determine how large an annual state contribution is required. One of the elements in the formula is the value of equities (stocks) in the pension fund’s portfolio, and the usual practice in determining the required annual contribution is to use a five-year moving average of their value, to account for market fluctuations. The bill would allow a one-year average, which given a strong stock market in the past year, has the effect of reducing the state contribution by $190 million less than the true actuarially sound amount.

Passed 107 to 1 in the House on April 17, 2007 - Who Voted "Yes" and Who Voted "No"
Passed 37 to 0 in the Senate on May 22, 2007 - Who Voted "Yes" and Who Voted "No"
Signed by Gov. Jennifer Granholm on June 6, 2007.

This is not to beat up too much on Mr. Camp, who as much as anyone is a captive of a growing institutional breakdown in Washington under the current administration. The Journal explains:

“Mr. Camp's hand was somewhat forced by a last-ditch Democratic effort to raise the 18.4-cents-a-gallon gas tax. With the failure of President Obama's $300 billion blowout, the House Democratic fallback was to pass a patch that would expire at the end of this year. Their betting was that they and the business community (which wants higher gas taxes) could then leverage a lame-duck session to jam Republicans into a tax hike. Mr. Camp's 10-month extension at least avoids that box canyon.”

Michigan Future Report Doesn't Add Up

Academic research favors low-tax states

A recent Michigan Future report calls into question a common economic theory: increasing taxes tends to lead to less private-sector growth. Comparing Michigan’s economic performance over the last two decades to that of Minnesota’s, the report claims that “rais[ing] taxes on the wealthy and businesses to invest even more in public services” was the Gopher State’s key to success. While this anecdote convinced the Detroit Free Press, a large body of economic research does not support this view.

For example, a new working paper published by the Mercatus Center empirically examines the relationship between state taxes and economic growth and finds evidence exactly contrary to the Minnesota anecdote. Pavel A. Yakovlev, an economics professor at Duquesne University, analyzed data from 49 states from 1977 to 2000 and controlled for differences in average age, educational attainment, federal employment, natural resources, population density and a variety of other factors. He then attempted to capture state economic performance by measuring year-to-year growth in gross state product per capita, growth in the number of businesses and net migration rates.

The results of his research support the common economic theory: higher average tax rates tend to have a negative and statistically significant relationship to state economic growth. Specifically, Yakovlev found that a 1 percent increase in average tax rate led to a 1.9 percent decrease in gross state product growth from 1977 to 2000. Similar effects were found on other measures: increases in taxation rates lead to fewer new businesses in a state and a higher probability that residents will migrate to lower taxed states.

The Michigan Future report fails to show causation for the Minnesota-based narrative that higher tax burdens and more government spending lead to increased state-level economic growth. But even if this were true for Minnesota, considering the broad economic research literature, policymakers should view the Gopher State as the exception, rather than the rule.

Michigan Education Digest

NEA prez suggests teacher assessments are "satanic"

The newest edition of Michigan Education Digest is available here. Topics include the new National Education Association president calling value-added assessments for teachers the “mark of the devil,” why the University of Michigan has to pay a student group $14,000 to settle a lawsuit, and how privatizing noninstructional services could help Flint schools reduce its overspending crisis.

Andrew Kaluza, RIP

Former Center intern, 27, passes away

The staff of the Mackinac Center for Public Policy mourns the loss of Andrew Kaluza, a 2011 summer intern, who passed away after a car accident over the weekend. Kaluza, an engineering major at the University of Texas-San Antonio, founded that school’s Young Americans for Liberty chapter and was a member of the executive board of Students for Liberty.

You can read more about the impact he had on others and the freedom movement here.

What Do Teachers Want to Support?

RTW allows them to skip union's political bent

The economic effects of state right-to-work laws are important, but these laws are significant for other reasons, too, namely the fact that employees cannot be forced to contribute money to a union they disagree with as a condition of their employment.

This is especially significant because many labor unions, particularly in forced unionism states, are political organizations that spend money on issues that most people would consider partisan and contentious.

Allysia Finley of The Wall Street Journal recently covered the National Education Association’s annual convention and explains how that union chose to spend its membership dues. The Michigan Education Association, this state’s largest teachers’ union, is an affiliate of the NEA. MEA members pay the NEA about $180 annually.

Finley reports that the union passed resolutions taking an “anti-fracking” position and encouraging members to boycott the office-supply store Staples, because the U.S. Postal Service has contracted out nonunionized work to them.

Finley adds, “Delegates debated whether the union's president should write a letter to Washington Redskins owner Daniel Snyder denouncing the NFL team name's ‘institutional racism.’ They also discussed a resolution supporting reparations for ‘the lingering impact of slavery’ and ‘subtle Jim Crow policies and thinking’ including ‘unconscious bias.’ These items were referred to a private committee for further discussion.”

Many people would find such endeavors are worthwhile. But is it in the wheelhouse of a teachers’ union? Thanks to the state’s right-to-work law, Michigan educators can now decide for themselves.

While the Legislature is adjourned for a primary election campaign break, the Roll Call Report is reviewing key votes of the 2013-2014 session.

Senate Bill 257, Expand “Business Improvement Zone” tax-and-spend entities: Passed 35 to 2 in the Senate on April 11, 2013.

To expand the items that a “Business Improvement Zone” can spend money on, revise voting rules in a way that (potentially) reduces the proportion of property owners needed to impose a zone's tax-and-spending powers, increase the proportion of owners needed to dissolve one, reduce notice and public meeting requirements required to establish one, increase penalties for not paying the "special assessments" these entities impose, and more. These zones have the power to impose levies to pay for the debt they incur to pay for projects that are supposed to benefit the property owners.

Who Voted "Yes" and Who Voted "No"

Senate Bill 38, Authorize wage garnishment for nonpayment of “administrative hearing bureau” fines: Passed 35 to 1 in the Senate on April 18, 2013

To allow a local government to garnish the wages of a property owner who has failed to pay fines imposed by “administrative hearing bureaus” that most cities are allowed to create for enforcing "blight violations" under a 2003 law.

Who Voted "Yes" and Who Voted "No"

Senate Bill 39, Authorize foreclosure for nonpayment of “administrative hearing bureau” fines: Passed 35 to 1 in the Senate on April 18, 2013

To allow a local government to foreclose on property owned by a person who has failed to pay fines imposed by “administrative hearing bureaus” that most cities are allowed to create for enforcing "blight violations" under a 2003 law.

Who Voted "Yes" and Who Voted "No"

Senate Bill 218, Expand borrow-and-spend "water resource improvement authorities": Passed 32 to 5 in the Senate on March 14, 2013

To eliminate the sunset on local governments creating new "water resource improvement authorities," which use extra property tax levies and “tax increment financing” schemes to divert other taxing units' property tax revenue to cover debt service payments on debt they incur for various recreation and development projects. The bill would also expand the scope of activities and geographic limits of these entities, letting them borrow and spend for dredging among other things.

Who Voted "Yes" and Who Voted "No"

Senate Bill 288, Give NRC duty of designating huntable game species: Passed 25 to 11 in the Senate on April 25, 2013

To give the state Natural Resources Commission (in addition to the Legislature) the power to designate a species as a huntable game species. This was widely regarded as an effort to preempt a ballot initiative to prohibit creating a wolf-hunting season.

Who Voted "Yes" and Who Voted "No"

Senate Bill 347, Expand MSHDA developer subsidies: Passed 36 to 2 in the Senate on May 16, 2013

To empower the Michigan State Housing Development Authority (MSHDA) to “invest” (buy ownership interest) in companies or nonprofits whose “primary purpose is to acquire ownership interests in multifamily housing projects” (and not necessarily build new ones).

Who Voted "Yes" and Who Voted "No"

Senate Bill 345, Authorize more state government housing subsidy debt: Passed 34 to 4 in the Senate on May 16, 2013

To repeal a requirement that the Michigan State Housing Development Authority (MSHDA) must scale back its debt from a “temporary” maximum of $4.2 billion authorized in 2012, to $3.4 billion after Nov. 1, 2014, subject to some exceptions. The borrowed money is used to provide taxpayer-backed mortgage loan guarantees, subsidies and more. The House has not taken up this bill.

Who Voted "Yes" and Who Voted "No"

Senate Bill 163, Limit DEQ wetland use restrictions: Passed 25 to 12 in the Senate on May 22, 2013

To expand certain exemptions to a state wetland permit mandate, require permit denials to document their rationale and authority, slightly increase the state's burden to justify restrictions on an owner's use of his or her property, prohibit the Department of Environmental Quality from imposing regulations that are beyond the scope those required by federal law, and make other changes to these land use restrictions.

Who Voted "Yes" and Who Voted "No"

Senate Bill 173, Ban local mandates that private employers must grant leave: Passed 25 to 13 in the Senate on June 5, 2013

To preempt local governments from adopting ordinances or policies that require private sector employers to provide paid or unpaid employee leave that is not required under state or federal law. This is related to a nationwide campaign promoted by unions to lobby for such local mandates. The House has not taken up this bill.

Who Voted "Yes" and Who Voted "No"

Senate Bill 257, Expand “Business Improvement Zone” tax-and-spend entities: Passed 77 to 31 in the House on September 12, 2013

The House vote on the bill described above. This was signed into law on Oct. 8, 2013

Who Voted "Yes" and Who Voted "No"

Senate Bill 175, Undo National Guard pension reform: Passed 37 to 0 in the Senate on May 22, 2013

To reverse a 2010 reform that eliminated "defined benefit" pensions for future Michigan National Guard commanders and their assistants, and instead provided 401k benefits. The 2010 reform was adopted following reports of these "Adjutant Generals" being granted generous state pensions based on limited state service ($78,000 to $133,000 for 1.5 years to 13 years service).

Who Voted "Yes" and Who Voted "No"

Senate Bill 38, Authorize wage garnishment for nonpayment of “administrative hearing bureau” fines: Passed 95 to 15 in the House on November 14, 2013

The House vote on the bill described above. This was signed into law on Dec. 17, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 39, Authorize foreclosure for nonpayment of “administrative hearing bureau” fines: Passed 103 to 7 in the House on November 14, 2013

The House vote on the bill described above. This was signed into law on Dec. 17, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 218, Expand borrow-and-spend "water resource improvement authorities": Passed 92 to 16 in the House on April 18, 2013

The House vote on the bill described above. This was signed into law on May 9, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 288, Give NRC duty of designating huntable game species: Passed 72 to 38 in the House on May 2, 2013

The House vote on the bill described above. This was signed into law on May 8, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 347, Expand MSHDA developer subsidies: Passed 88 to 20 in the House on September 12, 2013

The House vote on the bill described above. This was signed into law on September 24, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 163, Limit DEQ wetland use restrictions: Passed 66 to 42 in the House on June 12, 2013

The House vote on the bill described above. This was signed into law on July 2, 2013.

Who Voted "Yes" and Who Voted "No"

Senate Bill 175, Undo National Guard pension reform: Passed 91 to 14 in the House on June 6, 2013

The House vote on a revised version of the bill described above. The House slightly limited eligibility for these benefits compared to the Senate version and the pre-2010 law, but also added some exceptions to the new limits. This was signed into law by Gov. Rick Snyder on July 2, 2013.

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.