The MC: The Mackinac Center Blog

January 29, 2016 MichiganVotes Weekly Roll Call Report

Flint crisis money, drone bans, animal abuser checks

House Bill 5220, Appropriate money for Flint water contamination response: Passed 38 to 0 in the Senate

To appropriate $28 million to pay for response activities related to the contamination of the Flint water supply, of which $2.8 million is federal money. The Senate revised details of the House-passed spending plan after consulting with on-the-ground experts in the city.

Who Voted “Yes” and Who Voted “No”

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Senate Bill 328, Authorize more State Police officer grades: Passed 35 to 0 in the Senate

To create two new grades of State Police officer, called "inspector" and "recruit." The current grades are colonel, lieutenant colonel, major, captain, lieutenant, sergeant and trooper.

Who Voted “Yes” and Who Voted “No”


Senate Bill 539, Add more “promise zone” transparency: Passed 98 to 9 in the House

To impose additional reporting requirements on “promise zone” tax increment financing authorities located in low income areas, and provide a means for dissolving them. These entities “capture" a portion school property tax revenue to partially subsidize college tuition for local students.

Who Voted “Yes” and Who Voted “No”


Senate Bill 220, Waive fee for animal abuse background check: Passed 37 to 1 in the Senate

To allow animal shelters to access a government database called the Internet Criminal History Access Tool (ICHAT) at no charge for purposes of checking whether an individual who wants to adopt an animal has been convicted of an animal abuse offense.

Who Voted “Yes” and Who Voted “No”


Senate Bill 394, Streamline rental housing inspection regulations: Passed 73 to 34 in the House

To revise local government rental housing registration and inspection details. Among other things the bill would allow rather than require communities of a certain size to mandate that landlords must register themselves and their rental units. Also, a local government would not be required to inspect a multiple dwelling or rooming house unless it received a complaint from an occupant.

Who Voted “Yes” and Who Voted “No”


House Bill 4783, Increase landfill permit violation penalties: Passed 77 to 29 in the House

To increase the fines a state agency can impose on landfill operators for not meeting state environmental law standards or permits requirements to $75,000 per day for second or subsequent violations, and $25,000 per day the first time. These are civil not criminal penalties, which means the procedural safeguards available to a criminal defendant do not apply.

Who Voted “Yes” and Who Voted “No”


House Bill 4868, Ban using drones to interfere with public safety, or for surveillance: Passed 89 to 17 in the House

To make it a crime to fly a drone in a way that interferes with public safety or public utility activities. The bill would define flying a drone over private property without authority as trespassing, and prohibit using a drone for eavesdropping or surveillance.

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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Vernuccio Testifies on Right-to-Work in West Virginia

Director of Labor Policy described how states benefit from worker freedom

Mackinac Center Director of Labor Policy F. Vincent Vernuccio testified today before the West Virginia Legislature about how right-to-work laws can benefits states. West Virginia is expected to pass a right-to-work law soon, giving workers the freedom to hold a job without joining a union.

F. Vincent Vernuccio Testifies

Vernuccio pointed to the successes experienced in other states that have adopted right-to-work legislation in recent years, something he discussed earlier this week in an op-ed published by the Charleston Gazette-Mail, co-authored by Michigan Capitol Confidential reporter Jason Hart.

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From 2012, the year Michigan passed right-to-work, until mid-2015, incomes in Michigan rose over nine percent faster than West Virginia and the national average,” Vernuccio and Hart wrote. “From 2012-14, average hourly wages increased by 56 cents to $19.94 in Indiana, by 56 cents to $21.70 in Michigan, but only by 37 cents to $18.21 in West Virginia.

Vernuccio was joined at the West Virginia House of Delegates by Terry Bowman, a former UAW member and current president of Union Conservatives, who also encouraged the Legislature to support the legislation.

Terry Bowman Testifies

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Sports Stadium Deals Consistently Strike Out

Cities fail to negotiate deals that protect taxpayers

U.S. Sen. Claire McCaskill has proposed legislation that would force sports teams who relocate to a new city to pay back public subsidies received from their former state or town. This legislation is likely influenced by the St. Louis Rams’ recent decision to move to Los Angeles (Sen. McCaskill hails from Missouri). This is a solid idea, especially given what the economic research says about stadium subsidies and given the inability of cities to protect taxpayers from being left in the lurch on these stadium deals.

The Rams were lured from Los Angeles to St. Louis in 1995 by a new, publicly financed stadium, the Edward Jones Dome. The city borrowed nearly $500 million (inflation-adjusted) to construct the stadium and still owes approximately $100 million. This debt service will cost city taxpayers $5 million per year until 2021. The Rams also get to keep the revenue from the naming rights for the stadium, which is worth just under $4 million per year. Sen. McCaskill’s proposal would require the Rams to pay back the $100 million the city still owes.

But what’s lost in this debate is that it shouldn’t require federal law to prevent pro sports teams from abusing their publicly financed stadium deals. Unfortunately, most of the time, cities negotiate terrible agreements with franchises, leaving taxpayers in a vulnerable position.

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For instance, St. Louis agreed to a “state-of-the-art” clause in the Ram’s lease with the city. This required the Edward Jones Dome to be in the top 25 percent of NFL stadiums as measured by various stadium characteristics. If the Dome fell out of the top 25 percent, the Rams were free to break the lease and move. Given the large amount of new stadium construction in the NFL, the Edward Jones Dome quickly fell out of the top 25 percent, and the team claimed that the stadium would need $700 million in renovations to make it a top-tier stadium again. The city didn’t have $700 million to spare (which city does?) and, as a consequence, arbitrators in 2013 ruled that the city was in violation of the lease and the Rams were free to move.

But St. Louis is not alone. The Cincinnati Bengals have a similar clause for Paul Brown Stadium, which requires Hamilton County taxpayers to pay for any feature in the stadium if at least 14 other NFL stadiums have that feature. Since Paul Brown Stadium opened in 2000, 15 new NFL stadiums have been built, and there of lots of technologies and amenities that Hamilton County taxpayers are now on the hook for. Repayment on the debt issued to pay for the Bengals' home field now consumes close to 20 percent of Hamilton County’s entire budget.

State-of-the-art deals don’t just happen in the NFL. The Charlotte Hornets and Atlanta Braves have worked similar requirements into their leases with their respective cities.

Given that local governments appear unable to competently negotiate stadium leases that protect taxpayers, McCaskill’s legislation could be a step in the right direction. By making it financially prohibitive for teams to move until stadium debt is repaid, the legislation would essentially remove state-of-the-art clauses. Teams would likely try to work around this by demanding cities issue debt for shorter maturities so that the debt is paid off more quickly.

But better than this legislation would be a simple ban on public subsidies for stadiums altogether. The economic literature on this issue is very clear: The economic impact of a sports stadium is zero, or even slightly negative. Banning these subsidies altogether would be sound fiscal policy and provide the ultimate protection for taxpayers.

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Director of Research Speaks at Operation Action U.P.

Van Beek discusses effects of and solutions to over regulation

Mackinac Center Director of Research Michael Van Beek was the keynote speaker at an Upper Peninsula business meeting this week, an event covered by multiple news outlets.

During his speech at Operation Action U.P. – a Marquette conference attended by members of the business and academic communities – Van Beek discussed the hidden cost of government, particularly by way of regulations.

“I hope to equip them with principles of identifying bad regulations and then, also, equip them with information with how to better interact with their legislator down in Lansing and communicate with them in such a way that they can have an impact on improving the kinds of regulations that might impact their businesses,” Van Beek told ABC 10 News.

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Van Beek told TV6 and Fox UP that much of government’s cost to consumers and businesses is the result of over regulation.

"A lot of the focus on regulation and particularly the problem of over-regulation is done at the federal level and that is certainly an issue, but there are problems here at the state level too.”

Read and watch the full report by ABC 10 News here.

Read and watch the full report by TV6 and Fox UP here.

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Give Michigan Special-Needs Students Fair Access to the Best Options

Michigan should consider a full range of choice

Last fall, Lt. Gov. Brian Calley took the helm of a group to recommend reforms to Michigan’s special education system. For affected Michigan families looking for something better, one particular solution, unfortunately, lies out of immediate reach.

The special education task force, primarily comprised of educators and policymakers, is working to address problems Calley identified after a 2015 town hall listening tour throughout the state.

The desire to improve services reflects in part the scale of the challenge. More than one in eight students served in Michigan public schools received special education services during the 2014-15 school year, according to data from the state’s Center for Educational Performance and Information. The nearly 200,000 children have a range of mild to severe disabilities.

Parents like Macomb Township’s Liz and Jamie Roe can personally attest to some real struggles. Last summer, the Mackinac Center documented the frustration they faced in trying to get the specialized help their dyslexic daughter Mia needed. The situation reached the point where Mia was coming home from school in tears, and her teacher told her parents that her case was “hopeless.”

Finding the services of Lutheran Special Education Ministries, for a tuition rate significantly lower than the per pupil tax revenues collected in their local school district, was a watershed moment for the Roe family.

Liz Roe painted a clear picture of the dramatic turnaround in a piece she wrote for the Jan. 24 edition of the Lansing State Journal:

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Because our family could afford the choice, Mia started fourth grade with a clean slate in her new school ….

We finally felt like Mia was in a place where she belonged, where she received individualized assistance for her learning from teachers trained specifically to help her succeed. Instead of a Band-Aid or a diluted curriculum, she was given tools that fit the way she learned. She finally got up in the morning wanting to go to school!

Not every family of special-needs children frustrated by the services they receive can afford such an alternative. Calley’s fifth and final finding reflects the concern: “Support parents more with resources and options,” his report states.

Doubtless the task force is not contemplating the full range of options, because of exceptionally stringent language in Michigan’s constitution that forbids indirect aid to private schools.

Officials are to be commended for seeking to improve public special education services to a consistently high level. But fundamentally, parents ought to decide where the dollars designated to serve their children go.

Currently, nine states have authorized private school choice programs specifically tailored to provide valuable aid to families with special-needs children. Altogether, tens of thousands of students have experienced the benefit.

Among them are Arizona’s Jordan Visser and Max Ashton, Florida’s Faith Kleffel, and Oklahoma’s Phylicia Lewis. Studies in Florida and Arizona have demonstrated significant increases in parental satisfaction. Michigan’s neighbors Ohio and Wisconsin offer similar programs.

We are currently in the midst of National School Choice Week, a grass roots commemoration of parents’ power and freedom to select the best education environment for their children. Getting into the spirit, Gov. Rick Snyder signed a proclamation declaring January 24-30 “Michigan School Choice Week,” as well.

Last year, more than 100 students gathered at the Michigan State Capitol as one of 11,000 events nationwide. This year, the number exceeds 16,000, many of which you can find open to the public.

Here’s hoping that the state’s special education task force leads to better educational services and results for more of Michigan’s special-needs children. But without a drastic policy change, some families will continue to lack a fair shot at the full range of options that just might serve them best.

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Op-eds highlight benefits of educational options

An op-ed written by the Mackinac Center’s Education Policy Director Ben DeGrow was published by the Detroit News today, bringing awareness to the need for more school choice in Michigan.

In the piece, published for National School Choice Week, DeGrow discusses how school choice brings hope to parents and students and is flourishing in other states.

Rigorous research is nearly unanimous in affirming the benefits. Choice boosts academic outcomes and graduation rates. Further, public schools have demonstrably improved from the extra injection of healthy competition.

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The tide has turned nationally. Most states now offer some form of K-12 scholarship aid to families that choose a private education.

States with broader choice see public schools maintain or grow per student financial support. Meanwhile, more students find suitable education pathways that better prepare them for college or career. Parents routinely express extremely high levels of satisfaction.

Every child in Michigan deserves the opportunity to access an effective education. Here’s hoping Detroit’s next big education rally celebrates a host of new options that brighten the future for many students and their families.

DeGrow also spoke with Mike Rogers on The Frank Beckmann Show this week about how choice creates the opportunities Michigan’s most disadvantaged students need.

“More dollars is not going to be the answer for what these kids need,” DeGrow said. “It’s more options and more opportunities, probably outside that school system.”

Parent Liz Roe, a friend of the Mackinac Center, also penned an op-ed published by the Lansing State Journal earlier this week. In it, Roe explains how moving her two children, who have learning needs, to private school helped her family.

We finally felt like Mia was in a place where she belonged, where she received individualized assistance for her learning from teachers trained specifically to help her succeed. Instead of a Band-Aid or a diluted curriculum, she was given tools that fit the way she learned. She finally got up in the morning wanting to go to school! As for Mia’s older sister, the smaller class sizes in her new school allowed her teachers to get to know her better and see her struggles.

Read Ben DeGrow’s op-ed at the Detroit News.

Listen to DeGrow’s interview on The Frank Beckmann Show.

Read Liz Roe’s op-ed at the Lansing State Journal

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Myth-Busting the Michigan 'Gag Order' Law

What Senate Bill 571 actually does

The Michigan Legislature passed and Gov. Snyder signed Senate Bill 571, which prohibits schools and local governments from using taxpayer dollars to put out information about ballot proposals 60 days before an election. In the past, these entities have used public money to advocate for higher taxes.

Here is the exact language of the controversial part of the bill:

Except for an election official in the performance of his or her duties under the Michigan election law … a public body, or a person acting for a public body, shall not, during the period 60 days before an election in which a local ballot question appears on a ballot, use public funds or resources for a communication by means of radio, television, mass mailing, or prerecorded telephone message if that communication references a local ballot question and is targeted to the relevant electorate where the local ballot question appears on the ballot.

Local government and school district leaders as well as the groups that represent many of them are outraged. Public entities say they inform voters with neutral language that is needed to educate people before they vote.

But local governments and schools go well beyond that. There are many examples of government units using taxpayer funds to advocate for more money.

Based on their main arguments, the opponents of the new law don’t seem to grasp the problem.

Robert Showers, a county commissioner and board member of the Michigan Association of Counties, wrote that it “silences me and my six colleagues on the Clinton County Board of Commissioners.” He added:

Across Michigan, there have been hundreds upon hundreds of local ballot measures since 2012. And, yes, complaints about improper advocacy were filed in some cases. After review by the state, though, the issues involving local ballot questions represent about ½ of 1 percent of all such elections since 2012. And, remember, these were caught by the law before special interests started urging legislators to pass bills they didn’t have a chance to read. The facts are clear: We local officials take seriously our responsibility to not use public resources for advocacy on ballot measures.

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MIRS News notes a similar view from another group which advocates for local governments: “Chris Hackbarth from the Michigan Municipal League noted that in the last three years, the Secretary of State has only found five instances where a local government crossed the line into advocating for a local ballot question using taxpayer money.”

The problem with that analysis is that the only real limit to date on local governments is that they can’t specifically say “vote yes” for a proposal. But they have been allowed to advocate by: asking everyone to “pitch in,” “ask for your support,” “fund our future,” and “ask voters to renew.” They have been able to say a tax increase “can mean the difference between life and death,” ignore $260 million of tax increases, claim a tax increase will “boost Michigan’s employment rate and the economy,” “secure a better future” and more.

The Secretary of State is in charge of policing the campaign-related activities of local governments and MIRS News notes that, “Elections Director Chris Thomas [said the] new bill deals with what he calls ‘electioneering,’ which doesn't overtly ask for support of opposition, but leaves the reader or viewer with no other interpretation than one side of an issue. Thomas called this the ‘functional equivalent’ of expressed advocacy, which currently is not in his purview.”

When signing the bill, Gov. Snyder asked for clarification that elected officials could respond to questions about ballot proposals and give information as a function of their job. A new proposed bill, House Bill 5219, ensures that and allows local governments to send out the ballot language and the election date of proposals.

That seems like a good change to the new law, ensuring that informational language as neutral as possible can be sent out while limiting local governments from advocating for tax increases. And, of course, anyone who wants to advocate for or against a tax increase is able to do so – just without taxpayer dollars.

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It's Time to Expand Public Records Transparency

Reitz discusses Flint water crisis on Michigan Radio

Mackinac Center Executive Vice President Michael Reitz was featured in Monday’s edition of Stateside on Michigan Radio to discuss the need for more transparency in government in light of what is happening in Flint.

“The justification for FOIA unfortunately is very clear and very apparent in situations like the one we have now with the Flint water crisis where decisions were made that will affect people’s lives in horrific ways for years and years to come,” Reitz told host Cynthia Canty. “The people of Flint and the people of Michigan justifiably want to know who made these decisions and how were they made and why did we get it wrong.”

Reitz joined Melanie McElroy, executive director of Common Cause Michigan, who agreed that the governor’s office should be subject to the Freedom of Information Act. Michigan and Massachusetts are the only two states where the governor’s office and state legislature are exempt from this public records transparency law. Reitz explained it is time to change this standard:

We think generally it is a good idea to have the governor’s office treated the same way as other branches of government or other agencies under the Freedom of Information law. And really it comes down to the statement of public policy that FOIA includes in the statute. It says that, ‘All persons are entitled to full and complete information regarding the affairs of government and the official acts of those that represent them as public officials.’ If that’s true of a school board member or a local city council member, certainly it’s true of a person in the governor’s office or some other state agency.

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Read more about the interview, and listen to the segment in its entirety, at Michigan Radio.

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Center Featured in West Virginia Media

West Virginia could become 26th right-to-work state

With West Virginia poised to become the nation's 26th right-to-work state, the Mackinac Center’s Director of Labor Policy F. Vincent Vernuccio and Michigan Capitol Confidential reporter Jason Hart co-authored an op-ed in the Charleston Gazette-Mail. The piece explains worker freedom and details how it has improved quality of life in other states:

Right-to-work has helped other states. They have higher wage growth, more job growth, higher population growth and historically lower unemployment. Almost all right-to-work states have lower workplace injury rates than West Virginia, too.

Right-to-work can even strengthen unions. How is that? It makes them more responsive to members because they now cannot take forced dues for granted. Instead, they need to earn the voluntary support of their members by becoming better.

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Indiana is one example of this dynamic. In 2014 Indiana tied for the state with the most new union members when it added 50,000 new dues-paying members.

The West Virginia AFL-CIO says right-to-work will mean pay cuts for workers; union officials in Indiana and Michigan said the same, but average wages increased in both states after they implemented right-to-work.

West Virginia could soon join the ranks of these states and others that allow workers the freedom to choose whether or not they will join a union.

Read the op-ed in its entirety at the Charleston Gazette-Mail.

Additionally, Vernuccio joined "Decision Makers" on WOWK out of Charleston to discuss West Virginia's prospects as a right-to-work state:

WOWK 13 Charleston, Huntington WV News, Weather, Sports

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Pension Reform Failure Cost Michigan Taxpayers $6 Billion or More

It harms current employees and retirees as well

Scarce tax dollars are needed to fill the gap between what has been promised workers in the school pension fund and what the state has saved to make good on those promises. Yet some officials shrug off the underfunding as the cost of doing business.

The cost of underfunding pensions to school budgets is massive: $6 billion to $7.8 billion would have been saved if employees had been offered defined-contribution benefits over the past decade — enough to pay for every public school teacher salary for a year.

Using pension officials’ own assumptions and projections, the state now owes current and future school retirees $26.5 billion more than it has saved. This year alone, catching up on that debt will cost schools an amount equal to 22.3 percent of their entire payroll. When the cost of pensions earned by employees in the current year is added, the total hit to school budgets this year is 25.95 percent of payroll.

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When these same pension officials lobby against closing the defined-benefit system to new employees, they ignore the underfunding. But the system has carried more liabilities than assets in all but one of the past thirty years.

Over the past decade the size of the unfunded liability has more than quadrupled, from $6.1 billion in 2006 to the current $26.5 billion. So when legislators compare the costs between the current system and a defined-contribution system, they need to include an extra expense in the former for paying down its unfunded liabilities.  

Imagine instead that the state had been paying 5 percent of payroll into employee defined-contribution plans. Doing so would have saved schools and taxpayers $7.8 billion over the past decade. A more generous plan with 7 percent contributions would have saved $6 billion.

pension costs

The state has an obligation to deliver the pension benefits that were already earned by current employees and retirees. So it is not possible to flip a switch and start realizing these kind of savings right away.

It is possible to adopt this reform going forward, and the Legislature should do so immediately. This will contain future damage and put the state on a path to gradually eliminating legacy costs.

Continuing the current perpetually underfunded system is unfair to retirees who must worry about their pensions, and to current employees whose compensation is limited by the state’s need to service unfunded liabilities. And of course it is unfair to taxpayers, who are ultimately responsible for government pensions.

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