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.
$500 million later, 100 fewer jobs
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.
Very few jobs to show for special favors, subsidies
Michigan Capitol Confidential has been reviewing how the state's economy performed during the previous decade, in answer to a question raised by a politician’s recent assertion that “those years weren’t as bad as we think.” Separate articles looked at changes in Michigan’s employment, personal income and loss of people to other states. The data shows the period was quite bad, although causes and culprits will be debated.
But one sector does appear to have experienced significant growth during the 2000s: corporate welfare, euphemistically called “economic development programs” by politicians.
Measuring its growth is challenging because of frequent changes in programs and goals, a lack of transparency, and an abundance of spin and puffery in the information that is released. Moreover, the state has a poor record of actually confirming that subsidy recipients kept their “jobs” and “investments” promises.
Nevertheless, figures do exist illustrating the overall trajectory.
The Michigan Economic Growth Authority was considered the state’s flagship economic development program in the 2000s. Launched by Gov. John Engler in 1995. It granted “refundable” tax credits to particular firms selected by political appointees on the entity’s board. (MEGA was replaced in 2011 by a direct subsidy program, with amounts appropriated annually by the Legislature.)
Companies had to make investments and employ specified numbers of people before they could collect the credits, which were delivered in the form of business tax reductions and flat-out subsidy checks. How much of each has not been revealed to the public, reportedly due to Treasury Department rules.
As the charts below show, the volume of MEGA activity rose sharply under Gov. Granholm, both in the quantity of deals and their size:
The number of jobs promised by these deals rose apace:
Most of the jobs never happened though. A 2009 Mackinac Center study found that from the program’s 1995 inception through 2004, only 29 percent of the jobs initially promised came to pass. And even when these companies added jobs, considering the costs of these incentives, it’s questionable whether their net economic effects are positive. Moreover, it is impossible to know how many of those jobs would have happened even without the special treatment.
In addition to expanding MEGA, Gov. Granholm also launched her own selective subsidy and tax break programs. One of these was called the 21st Century Jobs Program, an economic central planners’ smorgasbord ranging from business loan guarantees to panels of “experts” allocating state research subsidies to the state actually owning a share of particular businesses. This was approved by the Legislature in 2005 and financed by $400 million in new government debt, with a commitment to spend an additional $75 million annually for another eight years (spending that continues today.)
Like MEGA, the results were not what was promised: A 2013 Auditor General report found that just 19 percent of the original jobs projected came to pass.
A number of other corporate and subsidy programs were launched or expanded by Gov. Granholm. One paid up to 42 percent of the expenses incurred in Michigan by film producers. In 2011 the open-ended nature of these film subsidies was ended, replaced with fixed-sum grants ($25 million worth in the 2011-2012 fiscal year, and $50 million annually in subsequent years.) As of last spring, nearly $450 million has been spent on these subsidies, with little to show for this massive redistribution of Michigan taxpayer dollars (see chart).
There is no systematic evidence that the corporate welfare expansion did anything to relieve the dismal economic conditions that prevailed during Michigan’s “lost decade.” Indeed, the evidence from many studies shows that these government attempts to pick winners and losers were actually harmful.
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.
Senate Bill 821, Whitmer amendment to impose "Amazon" internet sales tax: Failed 12 to 26 in the Senate on March 4, 2014
To "tie-bar" a bipartisan personal property tax reform bill to Senate Bill 658, which would impose state sales tax on catalog or internet purchases made from sellers outside the state that have an affiliation with a different business located in Michigan, in the manner pioneered by internet retailer Amazon.com. The amendment would have required the internet sales tax legislation to become law for the personal property tax reform to do so.
Senate Bill 783, Let landlords ban medical marijuana use: Passed 31 to 7 in the Senate on March 4, 2014
To prohibit the possession or use of medical marijuana on any portion of private property that is open to the public, or where it is banned by the property owner. The bill would also permit a landlord to refuse to rent a residence to someone who uses medical marijuana on the property. The House has not taken up this bill.
Senate Bill 878, Accommodate and regulate the “millionaire party” business: Passed 37 to 0 in the Senate on April 24, 2014
To revise the law governing charitable “millionaire party” gambling events that include casino games, in a manner that accommodates charities contracting-out operation of the fundraising events to a service that operates them for multiple charities at a single location, one event after another. This would recognize and accommodate a system that has evolved where on most days a person can gamble on casino-like games at a particular location, with the proceeds going to different charitable. The state Gaming Control Board had proposed restrictions on this. The House never took up the bill, and the dispute appears to have been successfully negotiated to permit the practice with some new regulations.
Senate Bill 768, Let state universities provide "unmarried partner" benefits: Failed 12 to 26 in the Senate on May 6, 2014
To adopt an amendment to the annual Higher Education budget offered by Sen. Gretchen Whitmer that would remove a prohibition on universities providing health insurance or other fringe benefits for "unmarried partners" of employees.
Senate Bill 774, Add spending for summer jobs program: Failed 12 to 26 in the Senate on April 30, 2014
To approve an amendment to the Natural Resources budget offered by Sen. Hopgood that would increase spending on a "Michigan Conservation Corps" from $4.1 million to $7.6 million. This is the state version of a New Deal era program created in 1933. The extra money would be for a summer jobs program.
Senate Bill 791, Revise, make permanent non-transportation 7/8th cent gas tax: Passed 38 to 0 in the Senate on May 21, 2014.
To eliminate the 2016 sunset on a 7/8ths cent-per-gallon gas tax that was originally supposed to expire in 1998 and only be used to clean up leaking underground fuel tanks, but which has been extended several times, and was diverted to other government spending by a 2004 “fund raid” enacted to avoid spending cuts in that and subsequent years' budget. This bill has not been taken up by the House.
Senate Bill 786, Give tax breaks to aquaculture and hydroponics: Passed 36 to 1 in the Senate on March 26, 2014
To exempt aquaculture and hydroponics production facilities from property taxes, and instead levy an alternative tax equal to 25 percent of the regular tax paid by other property owners.
Senate Bill 934, Preempt $10.10 minimum wage initiative; hike mandated minimum: Passed 24 to 14 in the Senate on May 15, 2014
To repeal the current state minimum wage law that makes it unlawful to employ a worker for less than $7.40 an hour, and replace it with a new law gradually increasing the mandated minimum to $9.20 an hour in 2017, and indexed to inflation thereafter.
As introduced the bill was seen as a Republican gambit to preempt a ballot proposal mandating that employers pay even higher minimums. It became a bipartisan gambit after concessions including inflation indexing brought most Democrats on board.
Senate Bill 850, Exempt public safety employees from no-contract "step pay hike" ban: Passed 27 to 10 in the Senate on June 10, 2014. Passed 27 to 10 in the Senate
To exempt law enforcement and fire department employees from a 2011 law that banned automatic seniority-based automatic pay hikes for individual government employees (“step increases”) during the time when a government employee union contract has expired and no replacement has been negotiated.
Senate Bill 910, Ban enforcement of new woodstove emissions limits: Passed 25 to 12 in the Senate on June 11, 2014.
To prohibit the Department of Environmental Quality from imposing new state woodstove and wood heater regulations, or enforcing new federal ones. The bill was introduced following news reports that proposed federal Environmental Protection Agency rules would impose restrictive new limits on wood heat. The House has not taken up this bill.
Senate Bill 324, Require certification of federal health care law “navigators”: Passed 37 to 0 in the Senate on June 12, 2014
To require “certification” for the individuals and organizations acting as “navigators” authorized by the federal health care law (“Obamacare”) to assist individuals who apply for government-subsidized health benefits through the law's “exchange,” including criminal background check and training in a program that protects the privacy and security of Michigan residents' personally identifiable information. The bill authorizes administrative sanctions and fines for individuals and organizations who violate various rules, including “steering” a person toward a particular policy. The House has passed a similar bill (HB 4576), but neither has been approved by the other body.
Senate Bill 748, Revise protectionist Detroit "limousine" regulations: Passed 30 to 8 in the Senate on June 11, 2014.
To allow Detroit to expand the scope of a city regulatory regime on “limousines,” by extending it to vehicles that can carry eight people including the driver. The limousine regulations have the effect of limiting competition to the taxi cartels that are protected by the city. The bill is sponsored by Detroit Democrat Virgil Smith, Jr. and cosponsored by Oakland County Republican Mike Kowall. It has not been taken up by the House.
Senate Bill 934, Preempt $10.10 minimum wage initiative; hike mandated minimum: Passed 76 to 34 in the House on May 27, 2014
The House vote on the bill described above.
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.
CapCon broke DIA salaries story three weeks ago
The Detroit News and the Detroit Free Press on Thursday both reported on $50,000 bonuses and double-digit raises the top two administrators at the Detroit Institute of Arts received in 2012. That was the same year voters in Wayne, Oakland and Macomb counties approved a 10-year millage for the DIA worth $23 million. The DIA has also resisted suggestions that it sell just a single painting that would have provided enough cash to ensure the museum did not need $350 million of taxpayer money as part of Detroit’s so-called “grand bargain” bailout.
Kudos to The News and Free Press for reporting on the DIA information that Michigan Capitol Confidential broke three weeks ago.
Twice as likely to work low-hour schedules
Economist Casey Mulligan has authored a new working paper for the Mercatus Center examining the impact of Obamacare’s “employer mandate” on various groups of workers. The mandate imposes financial penalties on larger employers who do not provide government-approved health insurance to employees who work more than 29 hours a week.
This provision creates an incentive for businesses to shift more people to part-time work, meaning fewer than 29 hours. Workers who currently work slightly more than 29 hours are especially vulnerable to having their hours reduced, and also losing any employer-provided coverage.
It turns out that, “Female workers are twice as likely as male workers to have work schedules that are between 30 and 35 hours per week,” reports Mulligan.
On the one hand, these workers become eligible for Obamacare insurance subsidies, without inflicting a penalty on their employers, when their hours are reduced. Unfortunately — as we’ve been hearing for the past year — the insurance available through those exchanges doesn’t work for many people, and even with subsidies can cost more than the better coverage many workers receive — or used to receive from their employers. (The cost increases for Michigan were described in a previous blog on this site.)
Mulligan explains the findings in more plain-English vs. wonky terms in this article posted on Real Clear Markets.
Gov. Snyder, GOP fail to defend K-12 spending
It is difficult to decide which is the more infuriating – those who persist in advancing a lie or those who stubbornly ignore the possible means of combating it.
The State of Michigan is spending more state tax dollars on K-12 education than the $6,884 per pupil it was spending the final budget year of former Gov. Jennifer Granholm’s administration. At the beginning of this year it was spending $7,545 per pupil. Beginning Oct. 1, that amount was increased again by $50 to $175 per pupil, with the lowest funded school districts receiving the largest boosts.
As students of propaganda learned long ago, however, if you tell a big lie long enough and loud enough people will tend to believe it. Polls show that, in spite of what simple math reveals, a majority of Michigan voters believe K-12 spending has been cut under Gov. Rick Snyder.
The Snyder campaign is now running television ads that attempt to refute the big lie about his record on K-12 spending. You can bet it wouldn’t be doing this unless there was evidence that, at least to some degree, the lie is hurting his re-election chances.
At this stage, in the midst of an election race, the impact of these ads will likely be minimal. It’s just too late to really win the argument, which will now come down to an adolescent exchange with one side saying: “that’s not so” and the other side saying: “oh yes it is so.”
As maddening as it may be to see a big lie perpetrated successfully, Gov. Snyder and the Republicans deserve much of the blame. Their longstanding ineptitude in dealing with the lie has been frustrating — and all the more so because it was rooted a dismissive ambivalence.
At a base level there’s a temptation to say “it serves you right.”
Over the past couple of years, in addition to telling the truth about the increased K-1 2 spending, Gov. Snyder and the Republicans should have also repeatedly cited statistics to put the entire debate in a different context. When it comes to K-12 spending, Michigan has been anything but stingy.
According to the U.S. Census Bureau, Michigan ranks 8th among the 50 states and the District of Columbia in per-pupil spending when adjusted for per-capita income. Without the per-capita income adjustment, it ranks somewhere between 22nd and 26th depending on mid-decade measuring variations.
The per-capita income ranking means that only six states and the District of Columbia make a greater spending effort toward K-12 education than Michigan. The overall (or raw number) ranking of 22nd to 26th puts Michigan in the middle of the pack among the states — an impressive standing considering it only recently emerged from a single-state recession.
Imagine if that information concerning Michigan’s comparative ranking in K-12 spending had appeared on every press release pertaining to education spending issued on behalf of Gov. Snyder and the Republicans for the past two years. Out of shear repetition the result would have been that virtually every journalist who regularly covers the issue would have known the rankings by heart months ago. In addition, perhaps somewhat more than half of the time, the rankings would have made it into their news stories.
Whether political propaganda is true or false, repetition is the key to its success. This is how the big lie about Michigan education spending has been promoted. Repeatedly putting Michigan’s K-12 spending story in its larger perspective could have provided Republicans with the antidote to that poison.
Those who prefer to believe K-12 spending has been cut probably wouldn’t be swayed by anything. But chances are that by providing the bigger context, again and again, the potential impact of the big lie could have been significantly limited. Or at the very least making the effort sure wouldn’t have done any harm.
Some might say that if those claiming Gov. Snyder cut K-12 funding were willing to perpetuate that lie in the first place, then what would prevent them from disputing the Census Bureau rankings as well? This is true, but that would have involved pushing and repeating a second big lie, something that would have complicated their task and wandered into an area (state K-12 spending rankings) which they prefer to avoid.
Use of the “larger context” would not only have been a sound technique for battling the big lie about K-12 spending, it is the logical, natural and orthodox response to all attacks that are based on partial and manipulated figures.
Let’s say someone wants to promote the idea that the Detroit Tigers are a lousy baseball team. They could cite whatever comparatively weak statistics they could find involving fielding, relief pitching and the absence of a World Series title over the past 30 years.
If your job was to defend the Tigers, wouldn’t it be sensible and obvious to change the perspective by pointing out that they have won their division four straight years and appeared in two of the last eight World Series?
This is exactly what Gov. Snyder and the Republicans failed to do regarding the K-12 spending issue. They made it easier instead of harder for their opponents to sell the big lie. That’s never a good strategy.
(Editor’s note: Jack Spencer is Capitol Affairs Specialist for Michigan Capitol Confidential and a veteran Lansing-based journalist. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)
Pension liabilities still a looming problem
A new survey of communities from the Center for Local, State and Urban Policy at the University of Michigan shows an uptick in the percent that say they are better able to meet their fiscal needs. This is good as it generally tracks with an improving state economy, but there are some warning signs ahead.
The survey notes, “For the first time in six years, more Michigan communities report that they are better able to meet their fiscal needs this year than those who say they are less able to do so.” (See chart nearby.)
This pushes back a bit against the frequent claims that local municipalities are “starving” for revenue. A full look at the numbers shows that revenue for local governments has stayed relatively stable, even amid the economic “lost decade” in Michigan. As noted in a recent CapCon article:
Local municipalities saw an increase of $1.4 billion in property taxes from 2000 to 2013 with that revenue increasing to $5.3 billion in 2013 from $3.9 billion in 2000, according to the state tax commission.
The municipalities received about $1 billion more in property tax in 2008 compared to 2000 with inflation factored in. By 2009, the property taxes collected had reduced to the point they were relatively the same as 2000 with inflation.
But many local governments will be facing ongoing fiscal problems. In cities, counties and townships around the state, retirement liabilities are eating into budgets. Some public entities are confronting this head on while others are putting off the problems for future elected officials (or unelected if the fiscal problems get too bad).
So while many local units haven’t seen a collapse in revenue, there has been a shift in where that money is going — often from public safety and parks to the liabilities of former employees. Those communities that confront this head on will be in better shape in the years ahead.
What rhymes with "that's not your job"?
Maybe it’s something in the water. In recent weeks Lansing politicians have proposed laws mandating an official poem for Michigan and forcing taxpayers to buy a state flag for the survivors of current or former legislators when they die. Now comes yet another piece of institutional grandiosity: a bill to create an official state poet laureate.
Never mind pension underfunding and damaged roads, to name two issues crying out for legislative solutions; members of our full-time Legislature seem to have both the time and the sense of entitlement to designate an official state poet.
Alas, given the usual political incentives, were the measure to become law (unlikely) the candidates would probably sound less like the ancient Greek Homer of “Iliad” and “Odyssey” fame and more like a modern namesake — Homer Simpson. Doh!
The Michiganvotes.org description of House Bill 5853* reads:
Introduced by Rep. Sarah Roberts, D-St. Clair Shores, on Sept. 23, 2014, to authorize the appointment by the governor of a state poet laureate, who would serve at the pleasure of the governor (meaning the governor could withdraw the appointment at any time). The bill authorizes no compensation, but does allow government money to be used to reimburse the individual’s travel expenses.
According to Wikipedia, the first such poet positions were created in Europe in the 1300s. The tradition started in Italy but it exists in other nations as well, including within the United States federal government and several of its independent states.
That’s no excuse though: As mom often told us, “Just because Johnny does something foolish doesn’t mean you have to do something foolish.”
Alas, these latest examples of legislative self-absorption are hardly new or unique. An earlier version of that flag bill in 2009 would have required a State Police escort for deceased legislators’ final ride to their grave. State politicians have named public highways, laws, buildings and other state assets after each other.
The political incentives for such institutionalized self-glorification — the desire of political careerists to avoid ever having to return to the private sector — also explains fluff bills intended to associate politicians’ names with symbols dear to certain interest or affinity groups. Examples include bills to establish an official state Scottish Tartan (see the video testimony here), enshrine in statute that Iosco County (and no other county!) shall be the “birding capital” of Michigan, or resolve the simmering controversy over which frog shall henceforth and always be the official state amphibian.
While a constitutional amendment prohibiting such puffery and self-promotion is probably excessive, residents should certainly not reward such behavior with any response other than hisses and sneers.
Lansing politicians should stick to their knitting: Protect residents and their property; provide efficient courts to adjudicate contractual disagreements, provide other true public goods and otherwise just stay out of the way.
Now there’s a concept worthy of a poem.
*The measure has 12 Democratic cosponsors and one Republican, Rep. Al Pscholka, who also is maneuvering to be the next Speaker of the House. The Democrats are Reps. Rashida Tlaib, Jon Switalski, Henry Yanez, Scott Dianda, Jeff Irwin, Tim Greimel, Tim Kelly, Marcia Hovey-Wright, Adam Zemke, Sam Singh, Andrew J. Kandrevas and David Rutledge.