Detroit School bailout “final answer,” require warrant for electonic data search, much more
The Legislature has adjourned for a summer recess. Due to the number of bills considered in the final week, some votes will be reported next week's Roll Call Report.
House Bill 5383, Detroit Public Schools bailout: Passed 20 to 17 in the Senate
To concur with the House-passed version of the Detroit school district bailout bill (see description at bottom of this report), with two minor clarifications. The bill does not contain provisions previously passed by the Senate that would give a mayoral commission the power to ration charter schools in Detroit.
House Bill 5387, Give force to illegal teacher strike sanctions: Passed 23 to 14 in the Senate
To authorize more rigorous sanctions and more certain procedures for public school teachers who participate in an illegal strike. The bill was opposed by all but one Democrat (Johnson) and Republican Senators Casperson, Hansen, Horn, Rocca, and Schmidt.
House Bill 5457, Repeal auto insurance company tax credit: Passed 29 to 7 in the Senate
To repeal a controversial tax credit auto insurance companies can collect based on payments into an “insurance placement facility” or high risk pool for individuals, and other expenses. Reportedly the companies are collecting $80 million annually for the credit, which they claim would otherwise be tacked on to customer bills.
House Bill 5457, Repeal auto insurance company tax credit: Passed 80 to 28 in the House
The House vote on the bill described above.
House Bill 5578, Clarify "big box" store property taxation: Passed 97 to 11 in the House
To require property tax assessors to assess “big box” stores based more on "highest and best use" factors rather than a lower value based on claims that the property would not be easily filled if vacant. This refers to whether these large structures are uniquely less valuable if vacant than other commercial properties that are supposedly easier to use for other purposes.
House Bill 5577, Impose licensure mandate on “mobility vehicle” dealers: Passed 96 to 12 in the House
To impose a new licensure and training mandate and associated regulations on prospective dealers (but not incumbent dealers) of vehicles modified for use by disabled individuals (“mobility vehicles”).
House Bill 5642, Authorize PPOs to let protected individual keep cell phone number: Passed 107 to 1 in the House
To allow an individual protected under a personal protection order to keep a cell phone number for which they are not the actual customer. The bill authorizes courts to order the phone company to make it so.
House Bill 4388, Authorize 3-mill "sinking fund" tax for school security and computers: Passed 107 to 1 in the House
To allow school districts to impose a 3 mill property tax for 10 years for a “sinking fund” that can be used to buy computer equipment, software and security equipment. Under current law schools can levy up to 5 mills for 20 years for a much narrower range of uses.
House Bill 5613, Limit state department rulemaking authority: Passed 61 to 47 in the House
To prohibit a state department from promulgating rules more stringent than required by federal standards, unless specifically required to by state statute, or the department director determines there is a "clear and convincing need" to do so.
House Joint Resolution N, Protect electronic data from unreasonable search and seizure: Passed 107 to 1
To place on the November ballot a state constitutional amendment adding a requirement that government get a warrant to “access a person's electronic data and electronic communication.” This would be added to the Article I provision that recognizes the right of the people to be secure from unreasonable government searches and seizures of their “person, houses, papers, and possessions.”
House Bill 5384, House's second Detroit school bailout version: Passed 55 to 53 in the House
To give the insolvent Detroit school district $467 million to pay off debt, and another $150 million for unspecified "transition costs," and hand over control from state receivership to an elected school board, subject to oversight from a state board created as part of the city's 2014 bankruptcy and state bailout. Some of these provisions are in other bills in a final legislative package that does not contain a controversial mayoral commission with the power to ration charter schools in the city.
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.
Vernuccio op-ed published in Huffington Post
First, Uber transformed the way people think about transportation; now it may be doing the same to unions.
In an op-ed published by The Huffington Post, Mackinac Center for Public Policy’s Director of Labor Policy F. Vincent Vernuccio explains Uber is working to create a model that could pull the antiquated union model into the 21st Century. In May, Uber and the International Association of Machinists District 15 announced the formation of the Independent Drivers Guild for New York City drivers to allow members meetings with management, create an appeals process for disciplinary action and offer benefit programs.
What makes the Guild interesting is, although organized by a large labor union, it won’t look much like a typical union. The New York Times reported that the Guild, “would establish a forum for regular dialogue and afford [workers] some limited benefits and protections — but that would stop short of unionization. …
Even though Guild members will meet with Uber, they will not be able to force Uber to bargain over contracts as a traditional union would. Further, no Uber driver will be required to pay dues to the Guild, as they otherwise would in a traditional union in New York. Uber drivers could still work directly with the company and would not need to go through the Guild if they wanted to negotiate with management or appeal a grievance on their own.
Vernuccio explained the guild is good in that it only provides services to workers who want them. However, he notes the Uber-IAM deal could open the door to forced unionism of drivers.
Nevertheless, the IAM and Uber coming to a voluntary agreement to provide optional benefits for drivers suggests the potential start of a positive transition for the labor movement. The voluntary agreement shows that unions no longer need to compel employers and employees into accepting forced representation and paying forced dues in order to support themselves.
Read the full op-ed at The Huffington Post.
Media covers new Mackinac Center lawsuit
Four years after Michigan passed right-to-work, it’s time for the Michigan Education Association to allow teachers to exercise their freedom.
That is one of the reasons the Mackinac Center Legal Foundation is representing an Ann Arbor science teacher in his suit against the Michigan Education Association and its local the Ann Arbor Education Association, which is illegally preventing him from exercising his right not to belong to the union. MLive wrote about the case this week, explaining plaintiff Ronald Robinson is being billed for fees to a union he does not wish to be part of.
Robinson's charge centers on Michigan's right-to-work law and when the Ann Arbor Education Association entered into its most recent master agreement with Ann Arbor Public Schools.
Michigan's right-to-work law went into effect in March 2013, saying contracts between employers and bargaining units cannot require employees to be union members or pay agency fees. Existing contracts did not have to immediately comply with the new law, but any new contracts negotiated since the law went into effect need to allow employees the option to opt out of union membership and agency fees.
Mackinac Center Senior Attorney Derk Wilcox explained that revisions to the collective bargaining agreement made in 2014 and 2015 triggered right-to-work and the MEA and Ann Arbor Education Association are forcing Robinson and other teachers to pay fees.
“A union cannot change almost everything in a contract and claim the agreement is not a new one that is exempt from right-to-work,” Wilcox said in a news release.
Robinson told Local 4 News in Detroit that he notified the union of his desire to leave because he didn’t feel it represents him well.
“I would like to see them do well, I really would,” Robinson said. “But at the same time, I would like them to be accountable for all of the voices, not just a chosen few.”
Watch Local 4’s coverage here.
Introduction of Uber decreases crash rates and DUIs
Uber has long suggested that the introduction of its service correlates with a decrease in drunk driving arrests. In Seattle, for example, DUI arrests dropped by 10 percent after Uber launched. But the company acknowledged that a more detailed analysis would be necessary to show causation.
That analysis has arrived in the form of a recently published paper by Angela Dills of Providence College and Sean Mulholland of Stonehill College, who conducted a broad study of Uber in over 150 cities. “Ride-Sharing, Fatal Crashes, and Crime” addresses not just incidences of drunk driving, but also crash rates and certain other types of crime.
The study found that fatal crash rates were reduced by six percent on average after the introduction of Uber in a city. Nighttime fatal crashes also dropped by 18 percent. Overall, the authors find that for each year Uber is operational in a city, auto fatalities decline by 16.6 percent.
The decline in fatal crash rates alone presents a compelling argument for expanding ridesharing services to a broader audience, but the drunk driving statistics are even more impressive:
[W]e find a large and robust decline in the arrest rate for DUIs. Depending upon specification, DUIs are 15 to 62 percent lower after the entry of Uber. The average annual rate of decline after the introduction of Uber is 51.3 percent per year for DUIs.
These numbers back up the anecdotal evidence Uber drivers have told through their stories. This new evidence suggests that allowing ridesharing to grow and expand in Michigan wouldn’t just benefit drivers and passengers, it would benefit everyone else on the road by cutting back on fatal traffic accidents, drunk driving and other related crimes.
The Michigan Legislature is currently considering a package of bills that would create a statewide regulatory framework for ridesharing and allow more Michiganders to drive for the likes of Uber and Lyft. Ridesharing is great for the Michigan economy, but this new research suggests that passing those bills would improve the safety of the state’s roads, as well.
Let parents, not a new bureaucracy, choose schools
The Michigan House narrowly passed a revised plan to aid the financially distressed and academically disastrous Detroit Public Schools, agreeing to send much more money to the reconstituted school district but drawing the line to defend parental choice. Former Gov. John Engler weighing in against a “morally wrong” Detroit Education Commission proposal may have helped make the difference.
The House significantly closed the gap between its initial DPS bailout offer of $500 million and the Senate’s more generous $715 million, settling on a total of $617 million. More importantly, though, Speaker Kevin Cotter and 54 other House members withstood the pressure to limit charter schools in Detroit. They saw through a plan that would have constrained educational choice, a scheme focused on protecting a school district plagued by financial scandal and bearing the nation’s worst academic record.
Instead of a seven-member commission, appointed by the mayor of Detroit and having a veto power over opening new charter schools, the new House plan establishes an advisory council with the task of providing annual recommendations on school facilities and locations in the city. As approved, the council would consist of the new DPS superintendent and school board president, as well as four additional members appointed by the state’s School Reform Office: a DPS parent, a charter parent, a charter administrator or board member, and a representative of charter authorizers.
There have been some strong reactions to the House’s approval of the new plan. MIRS News Service reports that Rep. Adam Zemke, D-Ann Arbor, described it as a “handout to criminals.” Detroit Free Press editor Stephen Henderson wished a drastic fate on supportive lawmakers: “sew them into burlap sacks with rabid animals, and toss them into the Straits of Mackinac,” he wrote.
Such responses are as misguided as they are inappropriate. The Detroit Education Commission would not solve DPS’ deep-seated woes. But for many students, it would limit future avenues of opportunity.
Though no proposal is perfect, the House compromise package mostly fulfills five principles of a sound legislative solution for DPS. If the Senate joins the House in approving this no-DEC compromise, that makes it a worthy cause for celebration. But it also leads directly to a call for action.
As a whole, Detroit charter schools have achieved better results than district schools. But students need more quality seats their families can access. And parents need information that will enable them to make the best decisions, along with capable school leaders who are primarily accountable to them, rather than to bureaucrats or politicians. These will require new options, and new partnerships.
The House majority merits kudos for standing tall on principle — parents, not bureaucrats, are better at choosing schools that work for their kids. In fighting hard to ensure no harm is done, it also has preserved the conditions that best allow for future success. It’s time to stop fretting over saving a failed institution, and time to start creating and pursuing more hopeful opportunities.
Note: Since the initial publication of this article, both chambers of the Michigan Legislature agreed on a bailout package that does not create a Detroit Education Commission.
Tenuous relationship between corporate welfare and economic health
Michigan will collect more taxes next year, but not as much as predicted a few months ago, leaving members of the Legislature looking at a sizable gap between what they want to spend and the money available to pay for it. The most constructive and efficient way to balance the budget is to eliminate the state’s corporate welfare programs and supporting bureaucracy.
The budget the Legislature enacted for fiscal year 2016 included almost $178 million in six major items over which the Michigan Economic Development Corporation controls. Cutting this would not only help balance the budget, but could improve Michigan’s economy. Lawmakers may also be able to redirect an additional $39 million from Indian gaming monies that currently flow directly to the state’s corporate-welfare bureaucracy.
The MEDC takes money from many people and businesses and gives it to a few. The logic that government can create more jobs than would otherwise exist is wrong according to both experience and empirical evidence.
One of the reasons cited publicly for the budget shortfall is the need to pay out on an old, targeted business subsidy program called “Michigan Economic Growth Authority.” Five scholarly analyses of MEGA have been performed since 2005, and three of them found the program had, at best, no impact on job creation and at worst, a negative one. A fourth found a positive but tiny impact.
The fifth study, published in 2014, reports, “There are no relationships between the use of MEGA and economic health.” The author, Michigan State University scholar Laura Reese, looked at more state programs than MEGA and concluded, “The wisest course of action for most cities would be to eschew particularized development incentives, especially those that require tax incentives.”
The state’s auditor general found that Michigan’s 21st Century Jobs Fund program could only show that roughly 19 percent of the jobs promised actually materialized. That doesn’t take into account the costs of running the program.
The Michigan film incentive program paid out more than $500 million in taxpayer money before it was canceled in 2015. Even one of the MEDC’s own paid consultants found that the program cost the state treasury more money than it generated.
The Mackinac Center recently discovered the same to be true of the state’s tourism promotion efforts, such as the Pure Michigan campaign. The Center looked at efforts of 48 states to promote tourism over nearly 40 years and found a negative result. For every $1 million increase spending, hotels and motels saw an additional $20,000 in extra economic activity. Eliminating this program alone would save the state $34 million in fiscal 2017 alone.
There is more evidence that programs like these don’t work, in Michigan and nationally. Economists Peter Fisher and Alan Peters conducted a literature review, looking at the work other scholars had done. In their paper, “The Failures of Economic Development Incentives,” they concluded the tens of billions dedicated nationwide each year to incentive programs are probably ineffective.
Worse, the MEDC may actually harm economic growth. A study published in the Cato Journal argues that states that encourage “rent seeking” may stunt their real rate of economic growth considerably. In rent seeking, private parties, like businesses, go to the government in search of favors, like subsidies. The MEDC hands out such favors.
The state needs to scale back its plans for spending. It should start with eliminating corporate welfare spending.
Op-eds in The Detroit News and Midland Daily News
As lawmakers in Lansing consider the best way to deal with the insolvent Detroit Public Schools, the Mackinac Center for Public Policy’s Director of Education Policy Ben DeGrow has urged them to preserve and expand school choice.
In an op-ed published in The Detroit News, DeGrow explains why limiting charter schools in the city — as the Senate’s plan would effectively do — is the wrong answer for students and parents.
Legislatures across the country have been expanding the freedom of more parents to choose the school they think is best for their children. A retrenchment on this bipartisan effort would be a blow to the larger school choice movement that has swept across this country.
DeGrow explains that establishing a Detroit Education Commission, which would have the authority to put a moratorium on new charters and close existing ones, would protect institutions at the expense of children.
Providing school options for low-income parents has become a political issue, because parents often choose nonunionized charter or private schools. So unions are pushing back, urging politicians to ban these choices for low-income families. Unions and their anti-choice allies are essentially trying to ensure that only the rich should be able to choose schools for their children.
In a separate op-ed published in the Midland Daily News, DeGrow writes about the need for a transparent statewide academic reporting system that considers not only students’ success, but their socioeconomic background. In Detroit and throughout the state, it’s important to consider the number of low-income students a school serves when ranking them, DeGrow said.
The ongoing challenge is to promote high standards without discouraging schools from taking on students who need serious remedial help after languishing elsewhere in the system. Following Florida’s lead, other states have developed ways to measure the year-to-year learning progress of individual students — including a schoolwide student average and subgroups of students.
DeGrow notes that permitting the proposed Detroit Education Commission to create such a grading system and rule on the fate of schools that do not perform to its standards could tilt the playing field against charter schools and cut off options for students who need them most.
The commission could bolster its own power and limit competition from charters by setting the bar high enough that few or no charter schools could earn an A or B.
Read the full op-ed in The Detroit News.
Read the full Midland Daily News op-ed.
Will Gov. Snyder veto the bill?
Right now, if a Michigan citizen goes to get a car repaired, it is fairly simple for the owner of the vehicle and a mechanic to decide what kind of parts to use to provide the fix. Unless a bill that has passed the Michigan Legislature is vetoed by Gov. Snyder, that process is about to get a lot more complicated.
There are two main types of auto parts: Those made by original equipment manufacturers (OEM) or those made by other companies (aftermarket). By and large, insurance companies, crash tests and research findings do not find a safety difference between the two — but OEM parts are usually significantly more expensive.
The makers of OEM parts, the large automakers, want a larger share of the auto repair parts market and have convinced a majority of Michigan legislators to make it harder for people to choose aftermarket parts. Despite the fact that there’s been no evidence provided that there is a systemic problem with aftermarket parts, House Bill 4344 has passed the Michigan Legislature and is on its way to the governor.
For the first five years of a car’s warranty, should the bill become law, mechanics could not use aftermarket parts on many components unless directed by the owner of the vehicle in writing. Parts manufacturers say this will harm and perhaps even cripple their industry and are urging a veto.
“The legislation discourages the use of aftermarket and remanufactured components in vehicle repairs, and in doing so will have a negative impact on Michigan companies, sales, and jobs,” Steve Handschuh, president and CEO of the Motor and Equipment Manufacturers Association, wrote to the governor. “In addition, consumers will have fewer repair choices presented to them, resulting in higher prices for parts needed for their vehicle repairs. We urge you to veto this legislation in support of the Michigan aftermarket industry and to preserve consumer choice in recognition of the high-quality and cost-effective repair options for their vehicles.”
Competition between parts manufacturers is good for consumers and repair facilities. It makes parts better, helps keep down the costs for consumers and can even put downward pressure on the cost of auto insurance. Legislators should be encouraging more competition, not less.
School recreation taxes, raises some speed limits, disclose pension liabilities
Note: Due to a House session that ran late, this report does not include votes from Thursday. These will be reported in the next Roll Call Report.
House Bill 4578, Authorize school recreation taxes: Passed 37 to 0 in the Senate
To add school districts to a law that lets several local governments organize a recreational authority with the power to levy up to one-mill of property tax for swimming pools, recreation centers, public auditoriums, public conference centers and parks. The law is silent on whether the recreational facilities could be school facilities if the bill becomes law, but does require them to be open to the public. It also requires voters in each municipality to approve one of these tax levies.
Senate Bill 189, Ease certain lawsuit against the state restrictions: Passed 34 to 3 in the Senate
To remove certain restrictions on a person who successfully sues the state collecting costs and fees in addition to any court-ordered damage awards. Under current law, the winning plaintiff must prove a state agency's position was "frivolous" to collect costs and fees.
Senate Bill 292, Disclose unfunded pension liabilities costs in state budget: Passed 109 to 0 in the House
To require the executive budget the governor must submit each year to include an accounting by department of how much is needed pay the annual "catch up" costs on unfunded liabilities. These liabilities are incurred to pay future pension and post-retirement health benefits promised to retired state employees.
House Bill 4344, Remove Big 3 protectionism from auto repair shop licensure bill. Passed 86 to 23 in the House
To remove a provision from a previously passed auto repair shop licensure bill that would have prohibited a repair shop from replacing a major part on a newer vehicle with one not made by the vehicle's maker. Under this bill, shops would be able to use parts from a different manufacturer if the customer directs this to be done in writing.
House Bill 4136, Add civics to high school graduation requirements: Passed 82 to 27 in the House
To add a civics component to the state high school graduation requirements. Students would be required to pass a test comprised of questions identical to some or all those of those on the civics portion of the U.S. citizenship naturalization test.
House Bill 4426, Reduce points for barely speeding: Passed 75 to 34 in the House
To reduce the drivers license points imposed for exceeding speed limits by 5 mph or less to one point from two points. The current two points would still apply to speeds above 5 mph and not more than 10 mph.
House Bill 4423, Increase speed limits: Passed 56 to 53 in the House
To increase speed limits on rural freeways to 75 mph where engineering studies and traffic patterns indicate this is safe. General speed limits elsewhere would be 70 mph on other freeways, 65 mph on state "trunkline" highways with light traffic, 55 mph on county roads, and 55 mph on unpaved roads except in Oakland and Wayne Counties, where they would be 45 mph. The speed limit on subdivision streets would remain at 25 mph.
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.
State job funds are expensive and underwhelming
There are rumors on Mackinac Island that there is an attempt to create a new state venture capital fund. It seems like these ideas pop up every couple of years. The results, though, have been expensive and underwhelming.
A 2003 program, the Venture Michigan Fund, is coming back to bite state taxpayers right now. The state issued a bunch of tax vouchers that would zap the budget if the deals behind them didn’t work out. Some did not, and the state was on the hook for an expected $140 million. Worse, the program may end up costing another $310 million. If the program was successful in creating jobs, the results were unreported. There are bills to wind this program down.
The 2005 21st Century Jobs Fund is still ongoing. Over the years, the fund has been used to support a number of high-risk investments. Unfortunately, more than $1 billion of taxpayer money has probably been spent, and what the state has received in return is uncertain. Feel free to scan the reports and see if you can determine whether the program justified its costs in an economy that gains and loses hundreds of thousands of jobs each year.
Success is something that gets trumpeted. Failures tend to be ignored. Lawmakers should be skeptical of another round of support for venture capital.