Studies

Telephone Lines

Crossed Lines: Regulatory Missteps in Telecom Policy

An analysis of forced access in Michigan

Violation of property rights is the defining feature of current telecom policy. … more

Recommendations to Strengthen Civil Society and Balance Michigan's State Budget

An Analysis of Fiscal-Year 2002-03 Appropriations and Recommendations for 2003-04

If Gov. Jennifer Granholm and the Michigan Legislature need specifics on how to close Michigan’s looming $1.7 billion budget deficit, they need look no further than the Mackinac Center for Public Policy’s new report on balancing the state budget, released today.

More than 200 specific recommendations from Mackinac Center analysts total more than $2 billion in cost savings and revenue enhancements. All budget reductions, including those involving federal funds, total $3.7 billion. 157 pages. … more
Budget Reductions

Proposed Budget Reductions for the Michigan Department of Agriculture

Gov. Granholm and the Michigan Legislature can save $34 million in the state agriculture budget, and sell state land for another $59 million. … more
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The Six Habits of Fiscally Responsible Public School Districts

An Assessment of What Michigan Public School Districts Can Do to Save Money Without Laying Off Teachers or Other Essential Staff … more
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The Clean Michigan Initiative: An Assessment

An Examination of the Goals, Results and Fiscal Consequences of Michigan's Most Ambitious Environmental Bond Program … more

Proposal 3: Establishing a Constitutional Requirement Extending Mandatory Collective Bargaining and Binding Arbitration to State Government Employees

On Nov. 5, 2002, Michigan voters will consider Proposal 02-03 ("Proposal 3"), an amendment to the state constitution that, if passed, would fundamentally alter the relationship between the State of Michigan and its employees. … more
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The Effect of Right-to-Work Laws on Economic Development

The right to decide for yourself whether or not to support a union in your workplace: union officials dismiss it as "the right to starve", but for the last thirty years Right-to-Work states have been outperforming compuslory unionism states such as Michigan. This report demonstrates how individual freedom and higher productivity give workers in Right-to-Work states the edge in job opportunities, employment, and purchasing power. … more
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Keeping Michigan on Track:

A Blueprint for a Freer, More Prosperous State

New legislative opportunities will come with the fall elections for the Michigan House, Senate, and governorship. Read the Mackinac Center's policy recommendations for the next Legislature and governor below. … more
The Michigan Union Accountability Act

The Michigan Union Accountability Act:

A Step Toward Accountability and Democracy in Labor Organizations

Unions in Michigan represent over 900,000 workers and take in more than $250 million in membership dues annually. But in spite of their expansive wealth and political power, requirements that unions disclose their financial dealings are minimal. Reform of the federal reporting system, which governs private-sector unions, is needed but unlikely in the current political climate. Michigan can take the lead by passing its own Union Accountability Act, requiring annual financial disclosure reports and independent audits of public-sector union affiliates active in the Great Lakes State. … more
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The Case for Choice in Schooling:

Restoring Parental Control of Education

After 40 years of struggle, school choice is now at the center of the debate over school reform in America, and it is of primary importance that the public understand the facts-and avoid the myths-surrounding this issue. This three-part primer is designed to educate and inform citizens about all aspects of school choice and equip them to participate in the debate as fully informed members of their communities. The report contains a historical overview of tax-funded schooling, demonstrates the failure of many popular reforms of the past and present, explains the various types of school choice, identifies the barriers to education reform, dispels myths surrounding school choice, and outlines strategic plans parents and other concerned citizens can follow to advance the cause of greater school choice. … more

The Cost of Remedial Education

More than a third of Michigan students leave high school without possessing basic academic skills including reading, writing, and arithmetic. This forces employers and post-secondary schools to take up the slack. This study conservatively estimates that Michigan businesses and institutions of higher education spend over $600 million annually to teach employees and students skills they should have learned in high school. The comparable national figure is $16.6 billion, but the human costs of K-12 educational failure are incalculable, according to experts' essays included in the study's appendices. … more
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The Impact of Limited School Choice on Public School Districts

Case studies of how school districts in Michigan's largest county are responding to competition from charter schools and public "schools-of-choice" … more
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Religious Liberty and Compulsory Unionism: A Worker's Guide to Using Union Dues for Charity

Many employees in unionized workplaces do not know that if they harbor religious objections to joining, financing, or otherwise associating with labor unions, they have legal recourse if their union or employer or both violate those rights. This report explains the statutes and developing case law that protect religious employees' freedom of conscience in the workplace by allowing them to refrain from union membership and divert their compulsory dues to a charity of their choice. … more
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Environmental Quality 2000: Michigan and America at the 30th Anniversary of Earth Day

Public opinion about the environment is often marked by unwarranted pessimism about the state of our air, water, and natural resources. But the most recent government data show that America in general, and Michigan in particular, have seen impressive gains in environmental quality since the first Earth Day 30 years ago. This report presents decades of facts and figures on Michigan and U.S. air and water quality, land use, and other environmental factors to show that, far from worsening, environmental conditions have actually improved substantially-and are likely to continue improving. … more
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Internet Purchases: To Tax or Not to Tax, Here Are the Questions

Has the growth of tax-free Internet sales hurt state revenues or education funding? Is it "unfair" for sales over the Internet not to be taxed while other sales are taxed? Would imposing new taxes on the Internet do serious damage to the ability of this new form of commerce to thrive? Does the growth of tax-free online shopping pose a threat to traditional "bricks-and-mortar" retailers? This study addresses these and other questions in order to provide state, local, and federal policy-makers with the intellectual and empirical ammunition they need to keep the taxman at bay. … more
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Trade Liberalization: The North American Free Trade Agreement's Economic Impact on Michigan

The North American Free Trade Agreement (NAFTA) is six years old. Has it benefited Michigan's economy? Or has it destroyed jobs and hampered prosperity, as predicted by many who participated in the national debate that raged for two years prior to its ratification? The verdict is in, and the available data clearly show that free trade is proving to be a significant boon to Michigan businesses and citizens. This study analyzes five years of import and export figures to show that the tariff cuts enacted by NAFTA have led to significantly increased Michigan exports to Canada and Mexico. The study concludes that while some businesses may have been hurt by NAFTA, on balance, removing government barriers to trade has been a positive step toward increasing the prosperity and standards of living for Michigan citizens-and citizens throughout America, Canada, and Mexico. … more
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Internet Access: Government Intervention or Private Innovation?

The Internet has transformed our way of life; and new "broadband" technologies promise even greater benefits through high-speed Internet access and communications. Unfortunately, because major cable companies currently have the capacity to provide this technology to their clients, other Internet service providers (ISPs) are crying foul. They are calling the cable companies' "head start" unfair and forming alliances to get the government to force cable companies to make their high-speed broadband lines available for use by all ISPs on equal terms. This study explains why this government intervention would be a terrible idea. It analyzes market trends and technological possibilities to show that "forced access" would significantly increase costs for consumers with no benefit to show for the added expense. The study concludes that "forced access" would stifle the innovation that naturally emerges from the free play of market forces. It shows why government should not only refrain from interfering with broadband technology, but should allow competition between local cable providers in order to maximize the potential of this exciting new technology. … more
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Michigan's Prevailing Wage Law and Its Effects on Government Spending and Construction Employment

Michigan's Prevailing Wage Act of 1965 requires contractors to pay artificially high union wages on all state-financed projects from road repair to school construction. This study examined the performance of Michigan's economy for two 30-month periods prior to and during the law's suspension by a federal district court and found that taxpayers could save hundreds of millions of dollars annually if the law were permanently repealed. The study also reveals prevailing wage laws' negative effect on job creation in the construction industry and their discriminatory impact on black and other minority workers. 21 pages. … more
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Michigan Labor Law: What Every Citizen Should Know

Michigan is one of the most unionized states in the country, with a long and sometimes troubled labor history that powerfully affects every citizen in the state from blue-collar factory workers to suburban soccer moms. Yet few understand how modern labor unions and state and federal labor laws operate. This study clearly and concisely explains the history of organized labor in America, how government unions affect the democratic process, how compulsory unionism interferes with workers' rights of free speech and association, and much more. Several recommendations for reform point the way toward restoring a more balanced, government-neutral approach to Michigan labor relations. … more
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School Choice in Michigan: A Primer for Freedom in Education

  School choice--the right, freedom, and ability of parents to choose for their children the safest and best schools--has moved front and center in the debate over how to improve education in Michigan. This three-part primer equips parents, educators, and policy makers with the facts they need to understand and advance market-based reforms that will help all Michigan schools perform at higher levels of quality and efficiency.
  The primer examines the history of government-funded and operated schooling, explains why nonmarket-oriented school reform efforts ultimately fail, and describes various school choice proposals including charter schools, inter-district choice, vouchers, tax credits, and universal tuition tax credits. Helpful appendices explain ways for grass-roots citizens to help advance school choice. … more

The Impact of School Choice on School Employee Labor Unions

  As school choice heads for the 2000 ballot in Michigan, it is important for citizens to understand how proposals including K-12 vouchers and tuition tax credits will affect the school employee unions that exert such a powerful influence on the state’s public school system.
  This study examines union membership rates among Michigan’s public, charter, and private school teachers and found that while teachers in every public school district are represented by-and pay dues to-a union, only 5 out of 139 charter and 2 out of over one thousand private schools employ unionized workforces.
  The study concludes that school employee unions-including the Michigan Education Association and the Michigan Federation of Teachers-have powerful political and financial incentives to spend millions of dollars to prevent more parents from being able to choose non-unionized charter or private schools for their children. … more

How Reliable Are Michigan High School Economics Textbooks?

  A strong knowledge of sound economic principles is not only important in the twenty-first century global marketplace, it is essential for the maintenance of a free society. Are Michigan high school students being taught what they need to know in order to succeed and prosper?
  This review of 16 of the most commonly used economics textbooks in Michigan high schools uses 12 criteria-including issues of trade, taxation, and the role of government-to evaluate which texts are and are not effective at presenting students with a balanced and accurate perspective on the modern market economy. Each text is graded, from A to F, on its ability to clearly instruct students in the "economic way of thinking."
  An abridged 27-page written copy of the report may be ordered normally, or the full reviews of each textbook may be downloaded at no charge via www.mackinac.org… more

Unused Capacity in Privately Funded Michigan Schools

Many Michigan education reformers are exploring proposals to use private schools to help fix public school problems, including student overcrowding and a lack of incentives for improving student performance. The proposals, whether they involve public-to-private student transfers or expanded parental choice among all schools, depend on private schools' willingness and ability to accommodate new students. This study, which surveyed 342 of Michigan's 1,058 private schools, confirms that private schools have the classroom capacity and desire to accept a significantly larger role in providing more of the state's children with quality education. 10 pages. … more

Keeping Michigan on Track

A Blueprint for Governor Engler and the 90th Legislature

  The close of the twentieth century finds Michigan in a position that seemed impossible barely a decade ago: record low unemployment, a thriving economy, growing educational opportunities, and a sense of accomplishment and high spirits. But much can be done to make Michigan an even better place to live and work.
  This report's five sections offer the Governor and the Legislature 41 specific recommendations that will strengthen property rights protection, reform labor law to protect worker rights, improve education for Michigan children, spur economic growth and development, and enhance the state's transportation infrastructure. … more

Saving Retirement in Michigan

Responsible Alternatives to Social Security

Social Security is going bankrupt, threatening the financial security of Michigan citizens. Retiring Baby Boomers are estimated to double the number of retirees in America by 2015, when Social Security will no longer collect enough in taxes to pay the benefits promised to recipients.

Privatizing Social Security-allowing individuals to privately invest their own retirement savings-can avert the financial crisis. Countries including Chile and Great Britain have privatized all or part of their state pension programs, yielding retiree benefits much higher than the government systems, including Social Security's paltry 2.2 percent annual rate of return.

This study recommends that the Michigan Legislature call on Congress to either privatize Social Security or allow Michigan to design for its citizens a sounder and more beneficial retirement plan. … more

"Urban Sprawl" and the Michigan Landscape: A Market-Oriented Approach

Government officials and environmental activists use "stopping urban sprawl" as a mantra to support greater government control over private land use decisions in Michigan through central planning aimed at farmland preservation and urban revitalization. This study critically examines suburbanization and land use in Michigan to determine that the state's economy and farmland and citizens' quality of life are not threatened by economic growth and development, or what activists have dubbed "sprawl." The study argues that restrictions on suburban growth do not address the causes of why people move out of inner cities any more than the Berlin Wall addressed the problems of East Germany's repressive socialist economy. The study concludes by recommending a market-based approach to land use policy and identifying "urban sprawl" as the natural evolution of free people pursuing peaceful ends and their shot at the American Dream. … more
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Paycheck Protection in Michigan

The U. S. Supreme Court's 1988 landmark decision Communication Workers v. Beck established the rights of employees working under union contracts to pay only those union dues or fees necessary to cover the costs of a union's employee representation duties. However, the majority of Michigan's nearly one million union workers are unaware of their rights under the Beck decision for the simple reason that their unions neglect to inform them. This report shows how "paycheck protection" legislation would help safeguard worker Beck rights by requiring unions to obtain up-front, written approval from individual workers each year before they could spend the dues money on political or other non-workplace-related activities. The report recommends that Michigan policy makers adopt a paycheck protection proposal to help union workers enjoy their freedoms of speech and association as they refrain from involuntarily contributing money to union causes with which they disagree. … more

Collective Bargaining: Bringing Education to the Table

Michigan parents, citizens, and policy makers have begun an earnest discussion over the issues that affect the quality of children's education, but one issue that is rarely considered in discussions about education reform is public school union collective bargaining. This Mackinac Center for Public Policy study is the first ever to systematically analyze the hundreds of collective bargaining agreements for every school district in a state. It examines collective bargaining's impact on Michigan public education and makes recommendations that school boards should incorporate into their union contracts to improve their ability to direct maximum resources to the classroom and deliver quality education to students. The study also explains the historical and legal framework of public employee collective bargaining in Michigan, analyzes seven important court rulings that affect public collective bargaining issues, and advises districts on which subjects to negotiate or not negotiate into their labor contracts. Three appendices compare costs and benefits of various health care plans and present contract and financial data from the survey of Michigan's 583 school districts. … more
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Reforming Property Forfeiture Laws to Protect Citizens’ Rights

The Framers of the United States Constitution understood that freedom depends upon the vigorous protection of private property rights and that this protection was therefore the most sacred obligation of government. However, despite Fifth and Fourteenth Amendment guarantees, recent years have witnessed a massive expansion of a legal practice known as "asset forfeiture," which allows government to violate the very property rights it is charged with protecting. Hundreds of asset forfeiture laws-many of them intended to stop illegal drug trafficking-give state and federal law enforcement agents the power to seize property even without proof of the owners' guilt in a criminal trial because, in many cases, the government considers the property itself to be the criminal. This study recommends nine reforms that will help guarantee that Michigan citizens enjoy the benefits of private property rights, limited government, and individual liberty, and remain protected from unjustified and arbitrary seizure of their personal possessions. … more

The Need for Debt Policy in Michigan Public Schools

Public school construction is booming across Michigan, but due to citizens' negative perceptions, many districts are finding it harder and harder to gain voter approval for bond proposals to fund needed projects. This analysis of Michigan public school bonding concludes that development of formal debt policies can help schools earn essential voter trust by managing bond monies in the most efficient and effective manner. The report recommends fifteen elements for a sound debt policy that school districts should adopt to avoid common pitfalls and problems in bonding, including excessive borrowing, improper accounting, and conflict of interest in debt issuance. 17 pages … more
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The Universal Tuition Tax Credit: A Proposal to Advance Parental Choice in Education

This pathbreaking approach to expanding parental choice in education embodies a proposal to amend the Michigan constitution and establish a Universal Tuition Tax Credit (UTTC). The tax credit would offset a portion of private or public school tuition and would be claimed against state tax liabilities. In addition to improving education, the UTTC would save the state hundreds of millions of dollars per year. Unlike other tax credit plans, the UTTC would help needy families with low state tax liabilities by encouraging the creation of corporate scholarships to offset tuition costs not covered by the UTTC. The per-student credit could be claimed against the Michigan tax liability of any person or corporation. Unlike vouchers, the UTTC would not allow state funds to support religious schools, would not drain funds from the public schools, and would not spawn new entitlements or overregulation of private schools. The study includes detailed fiscal models, a discussion of school choice, a history of Michigan's constitutional impediments to education reform, and proposed language for a constitutional amendment. 76 pages … more
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Do Private Schools Serve Difficult-to-Educate Students?

Private K-12 schools are sometimes criticized for accepting only those students most likely to succeed academically, and for leaving the most difficult-to-educate children to the public school system. Is this true? The diversity of private schools includes those that serve exclusively at-risk, incarcerated, or disabled children. The report describes private schools that educate each of these populations, reviews how public schools are contracting with private schools to serve difficult-to-educate students, examines policy implications including cost and school choice, and presents six case studies of Michigan private schools that serve exclusively students with special needs. 71 page … more
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Energizing Michigan's Electricity Market

Michigan is about to allow customer choice in the electric power market and, by doing so, end nearly a century of monopoly protection and guaranteed profits for electric utilities. How the state makes this free market transition will impact Michigan's competitiveness and cost of living. The report reviews key decisions before the legislature; analyzes the Public Service Commission proposals; shows the technical, environmental, and economic impact of deregulation; compares Michigan to other states; and recommends ten specific actions to ensure fair, timely, and comprehensive customer choice. The effects of so-called stranded cost payments to utilities are assessed in detail. A four-page glossary of technical terms is included. 33 pages. … more
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Compulsory Union Dues in Michigan

Nearly one million Michigan workers are forced to financially support a union in order to keep their jobs. Although federal law permits unions and employers to force workers to pay for union representation in the workplace, the law does not extend to forcing workers to pay unions for representation in the political arena. Over three-fourths of union workers are not aware that they do not have to fund their unions' political, social, and ideological agendas. This report documents the developing law surrounding compulsory union dues in Michigan, shows workers how to exercise their rights to a dues refund, presents positive union strategies for making workers aware of their rights, and calls for executive action by the governor. 28 pp. … more
Declining Standards

Declining Standards at Michigan Universities

Reflecting a national problem, Michigan public universities are producing graduates who are unprepared for K-12 teaching careers and the business world. The demise of the traditional core curriculum, indoctrination in the classroom, and questionable teaching methods that emphasize emotion and subjectivity over rigor and critical thinking are to blame. The study documents extensive evidence cited by employers that college graduates lack crucial communications and thinking skills, and it finds a link between poor training of aspiring teachers and declining K-12 student performance. Analysis of over 300 undergraduate course syllabi reveal the dominance of trendy, politicized course content. 88 pages. … more

Reforming the Law of Takings in Michigan

If the state of Michigan takes from a land owner some, but not all, of the use or value of his land, the owner is not entitled to any compensation. This forces a few land owners to bear the entire cost of these takings that are intended to benefit the public as a whole. Many states have initiated reforms that would permit land owners to be more fairly compensated. This study outlines the practice of takings jurisprudence in Michigan, reviews the legislative responses in Michigan and other states, and makes specific recommendations for reform in Michigan. 40 pages. … more

Advancing Civil Society: A State Budget to Strengthen Michigan Culture

At its core, the budget of the state of Michigan is not about money-it is about people and the way they organize their society. This line-by-line analysis of Michigan's 1995-96 state budget reflects a principled vision for Michigan culture by asking this question about each budget item: Should this program or activity be done by the authority of the state and financed by taxes, or should it be done by its individual citizens acting in voluntary cooperation and private contract with one another? The study recommends over $2 billion in spending reductions (over 7 percent of the state budget) achieved by eliminating unnecessary and counterproductive programs, rolling back unjustified program growth, and contracting out for services that can be handled more efficiently by the private sector. This landmark analysis will help citizens, candidates, and officials of any state craft budgets that promote the strengthening of private institutions and civil society. 97 pages. … more

Are Michigan's History Textbooks Reliable?

When history texts are poorly written, students are merely bored. But when they are distorted and biased, students may act on false ideas and live out a lie. How reliable are Michigan's history texts at presenting the past in ways which are well organized, accurate, clear, and free of bias? In this study, four Michigan history textbooks are analyzed and reviewed against these criteria. The reliability of these texts is especially important since Michigan history is a required subject for Michigan fourth graders, and it is studied by many junior high and high schoolers too. Parents, teachers, and school officials will find this study a valuable tool for making the best choices for their students. 28 pages. … more

Stress Claims in Michigan: Worker's Compensation Entitlement for Mental Disability

The worker's compensation system was developed as a way for workers who suffer on-the-job physical injuries to be compensated fairly and quickly for medical expenses and loss of income. In recent years, however, it has expanded into a new area fraught with vagueness: mental stress. Though the focus of this report is on Michigan, which has been in the forefront among states in mental stress claims, its searching analysis of the inherent difficulty in evaluating these claims will be useful for anyone interested in this growing area of workplace abuse. 36 pages. … more

Outcome-Based Education: Miracle Cure or Plague?

This report explains why there is so much conflict over outcome-based education (OBE). When states began to institute OBE programs, they turned the crucial task of defining outcomes over to the very education establishment threatened by the process. Having adopted in principle the laudable focus on education results, the educrats then went on to propose a list of outcomes that emphasizes not academic achievement but rather, attitudes and behavior that often reflect quasi-political or ideologically correct positions. 24 pages. … more

Teacher, Inc.: A Private Option for Educators

This study profiles the experiences of a number of educators in private practice, and discusses the benefits that teachers, students, and schools may realize by contracting for instruction. Also included are the results from two national surveys about the legal authority of school boards to contract for instruction, and a chart to help administrators identify the fully allocated costs of in-house and contract service. 23 pages. … more
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Fixing the Roads: A Blueprint for Michigan Transportation Infrastructure Policy

This comprehensive study is the only one available that documents Michigan's road needs, illuminates the diversion of hundreds of millions of Michigan road dollars to nonroad and non-Michigan use, demonstrates how Michigan can save over $170 million annually, and shows that a gas tax increase is not needed if funding diversions are stopped and modest savings measures are enacted. Several of its recommendations have been implemented. 40 pages. … more

MEGA Industrial Policy: An Analysis of the Proposed Michigan Economic Growth Authority

Michigan has seen stellar economic progress due to Governor Engler's free-market reforms. Is MEGA a reversal of the trend? Should government pick the winners and the losers? This report analyzes proposed MEGA legislation. 16 pages. … more

Timber Producer Certification in Michigan: Self-Regulation vs. State Regulation

Which form of regulation is better for solving problems, protecting consumers and the environment and encouraging rational economic planning-regulation by government or regulation by industry through free markets and incentives? Michigan State University Forestry Professor and Mackinac Center Scholar Dr. Potter-Witter argues for a self-certification model that could be applied to other industries. She also provides a thorough review of the Michigan timber market and a timely survey of literature on occupational licensing. 23 pages. … more

The Archer Administration: A Commentary at Year One

After one year of Detroit Mayor Archer's administration, analysts Kleiman and Hutchison conclude that although some promising new directions were taken, much work remains. Experience in other major cities such as Philadelphia point the way for Detroit: Mayor Archer should move quickly to cut tax rates and privatize more services. 10 pages. … more

Political Drift or Paradigm Shift?

An Agenda for Leadership that Lasts

During the elections of 1994, the voters spoke with uncommon clarity about the role of government in their lives. Governor John Engler was re-elected to be a risk-taker, not a caretaker. In this advisory document, the Mackinac Center recommends several specific measures for education reform, labor law reform, and economic development. 5 pages. … more

Doing More With Less: Competitive Contracting for School Support Services

Competitive contracting can provide schools with expertise, flexibility, and cost efficiencies not always available with in-house service provision. If they are properly designed and monitored, contracts between schools and private providers can help school administrators do more with less. Includes step-by-step guidelines for the "make or buy" decision, tells how to avoid pitfalls, and suggests measures for contractor evaluation. 26 pages. … more

The Limits of Compulsory Professionalism: Does a Unified Bar Make Sense for Michigan?

No profession other than the practice of law, in Michigan or any other state, requires membership in a professional organization to maintain a license. This practice, known as the unified bar, has been the subject of litigation in a number of states. Practicing attorney and Law Professor Bradley A. Smith and attorney Alan Falk note that nineteen states have voluntary bar associations, and compare their operation to the "unified" (involuntary) associations. They find that compulsory bar membership provides no greater benefits than those provided by voluntary bar associations. 26 pages. … more

Discrimination at Private Clubs in Michigan: Freedom of Association After Public Act 70

In recent years, a cherished American right, freedom of association, has come into conflict with laws designed to prevent discrimination by private organizations. Michigan's Public Act 70 of 1992 is one such law. Examining P.A. 70, as well as Michigan's famed Elliot-Larsen law, University of Detroit Law Professor Stephen J. Safranek finds that the act was unnecessary, misdirected, and economically harmful. Individual consumers of club services are the real losers. P.A. 70 is government intervention without regard to the right of private clubs to engage in freedom of association. 16 pages. … more

Sales vs. Income Taxes: The Verdict of Economists

The March 15, 1994, statewide ballot question asked voters to weigh the pros and cons of school finance. The central question was this: Which does the least economic harm-the sales tax or the income tax? Economist Dean Stansel maintains that theory and empirical evidence suggest that consumption taxes are less deleterious than taxes on income, investment, and savings. Connecticut imposed a new income tax in 1991 and economic growth evaporated and job opportunities and population declined. We should learn from the experience of states with high income taxes. 9 pages. … more

Making Schools Work: Contracting Options for Better Management

Can America's public schools be improved? Unquestionably. Without additional spending, school administrators can take advantage of the expertise of the private sector, introducing innovations that will make a world of difference. This study reveals dozens of examples of private companies now providing management, instructional, and support services to public schools across America. A must-read for anyone interested in changing public education by putting competition and the profit motive to work. 28 pages. … more

Ecorse: The Fall and Rise of a Michigan City

Ecorse, a Michigan community south of Detroit, gained a national reputation in the late 1980s as a town that took privatization seriously. Over a four-year period, Louis Schimmel, court-appointed receiver, privatized most city services, cut the city's work force more than 60 percent, and eliminated a $6 million budget deficit. Daddow's review of the city's efforts to correct its fiscal problems through spending discipline and privatization is a must-read for every city official who wants to learn lessons from a city that's been to the brink and back. 99 pages. … more

A Prosperity Agenda for Michigan Cities

Introduction by David G. Sowerby

This study compiles recently released 1990 U.S. Census Bureau data to measure the economic and fiscal policy performance of Michigan's eleven largest cities. Using an index composed of poverty rates, population growth, job growth, and per capita income, the authors find that six cities grew during the 1980s while five declined. The per capita tax burden was found to be 65 percent higher in the declining cities than in the growing cities, a difference of more than $1,100 per year in taxes. Preface by prominent Michigan economist and Mackinac Center scholar David Sowerby. 19 pages. … more

Michigan Education Special Services Association: The MEA's Money Machine

This exhaustive report illuminates the inner workings of the Michigan Education Association's health insurance division, known as MESSA. It documents how tens of millions of the public's education tax dollars are wasted each year on uncompetitive teacher health insurance, and how MESSA is part of a systematic plan to subsidize the MEA's basic operation and political activity. 64 pages. … more

Modern Schools for Michigan: An Outline for Educational Reform

After the Michigan Legislature's vote to end property tax funding for schools, the Mackinac Center issued this outline of a comprehensive education overhaul for Michigan. It suggests policy changes including parental choice, school-based management, and charter schools. Also included is an explanation of the Mackinac Center's innovative Education Credit Account idea. 7 pages. … more

Child Foster Care in Michigan: A Privatization Success Story

Few issues are more emotional and controversial than how states care for children who are removed from families because of neglect, abuse or abandonment. This extensively documented report finds that it is less costly to place children in foster care supervised by private agencies than for this service to be provided by Michigan's Department of Social Services. Privatization of this important social service serves as a model for other states. 16 pages. … more

Washington Should Kick the Mandate Habit:

The Fiscal Impact of Medicaid Mandates on Michigan

Unfunded mandates forced on state governments by Congress pose a substantial challenge to both their budgets and their fiscal sovereignty. Nearly one-third of the growth in Michigan state government revenue for 1993 was consumed by the cost of federal Medicaid mandates alone. The authors' recommendations include the creation of a mandate ombudsman and database, requirements that Congress determine the cost of mandates before passing them, and a call for Michigan's federal representatives to appear before the state legislature to explain their positions on mandate issues. 17 pages. … more

Proposal A: An Analysis of the June 2, 1993, Statewide Ballot Question

In 1993, Michigan voters were asked to consider a plan that would cut property taxes and cap property assessments, raise the sales tax, and establish a $4,800 per-pupil guarantee for the public schools. "Proposal A" was defeated, but not without intensive debate in which this study figured prominently. The report identifies both pros and cons of "A," including independent, in-depth analysis of its likely impact on the state budget, schools, and property owners. Although "A" is now consigned to the history books, this study is a useful tool for understanding school finance, the economics of property taxation, and related constitutional questions. 40 pages. … more
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Michigan's Experiment with Public School Choice: A First Year Assessment

In 1991, the state of Michigan required each of the state's 563 school districts to devise intra district choice plans by April 1992. Wittmann and DeVore examine those plans and conclude that what could have been a bold new beginning for school reform in Michigan turned out to be a largely unproductive extension of the status quo. Genuine choice, competition and accountability in education require far more fundamental changes that will break the monopoly of the public education establishment and create a real marketplace for education. 57 pages. … more
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The Engler Administration: A Mid-Term Review

January 1993 marked the half-way point of Governor John Engler's first term. In this review of the Engler administration, the Mackinac Center notes, "While the nation opts for change in one direction, progress in another is taking place here under the leadership of Governor Engler toward putting government in its proper (read: smaller) place." The report cites the strengths and weaknesses of the administration and concludes by assigning Governor Engler an overall grade of "A-." In addition, several new initiatives are suggested for 1993 and 1994 including civil service reform, property tax cuts, budget reductions, and privatization. 8 pages. … more

Analysis of Tax Proposals on the 1992 Ballot

The November 1992 general election in Michigan included two propositions regarding property taxes, Proposals A and C. This evaluation presents a detailed analysis of them, including projections for state and local government revenues. Widely cited in the press when released, it remains a useful guide to Michigan's property tax structure. The report makes a strong case that Michigan, which has the second highest property tax burden among twelve Midwestern states, sorely needs a property tax cut to spur economic growth and to stem the exodus of business from the state. 44 pages. … more

Twenty Myths About National Health Insurance

The allure of national health insurance comes largely because it is perceived as successful in Canada and Britain. This thoroughly documented report shows conclusively that government-run national health insurance has led to serious and inevitable dilemmas that no country should want to emulate. The authors prove that other models have not been more successful than the U.S. in controlling costs or providing superior access to care, and that adoption of a national health system would have negative consequences. Released in cooperation with the Dallas-based National Center for Policy Analysis. 68 pages. … more

Responding to Municipal Fiscal Crisis: Bottom Line Lessons from Ecorse, Michigan

Ecorse, one of seventeen communities in the Downriver Detroit area, became the first Michigan city to be placed in receivership. Court-appointed Receiver Louis Schimmel turned the city's finances around through aggressive policies of cost cutting and privatization. He privatized the entire Department of Public Works for a minimum annual savings of $400,000. Other cities such as nearby Detroit have much to learn from the Ecorse experience. 13 pages. … more

New Hope for Michigan Welfare Reform

Welfare programs cost too much, foster dependency, and tear families apart. Consequently, they actually increase and perpetuate the very poverty which they are intended to remedy. What is required now is a sharp break from prevailing practices-a new philosophy of public assistance. This special report argues that Lansing lawmakers must restructure our state's welfare programs to provide incentives to keep families together and encourage people to work their way off welfare. The sixteen-point program for Michigan welfare reform, the first comprehensive proposal on the subject after the 1990 election, sparked a vigorous statewide debate. Dr. Gerald Miller, then director of the Michigan Department of Social Services, stated in June 1992, "Eleven of the Center's proposals were incorporated into Governor Engler's program." 7 pages. … more

Keeping the Engler Revolution on Track

This analysis of Governor Engler's first year in office gives the governor high marks for balancing the state's budget without a tax hike. The governor is urged not to shrink from the politics of constructive confrontation with legislative "big spenders." Includes a review of his first year in light of the Road Map for a Michigan Renaissance, issued by the Mackinac Center in November 1990, and makes recommendations for the continued downsizing of state government. 3 pages. … more

Educational Choice for Michigan

The sad state of public education in Michigan and America is largely due to its organization as a government-protected monopoly. The authors argue that injecting choice, competition and accountability into education would result in dramatic improvement. The report explodes the myths that the problem in education is too little money and that choice would lead to segregation or elitism. One chapter focuses on the remarkable achievements of 107 non-public schools in Detroit. 102 pages. … more

Progressive Environmentalism: A Pro-Human, Pro-Science, Pro-Free Enterprise Agenda for Change

Task Force Report

Radical environmentalism is the destructive notion that free enterprise is the danger and government is the manager of the environment. Conclusive facts, figures, and analysis show that private property and free markets should be encouraged if we want to clean up our environment. Specific changes in the law would improve environmental quality and preserve personal and economic liberties. 85 pages. … more

Employment-at-Will in Michigan: A Case for Retaining the Doctrine

The last two decades have witnessed an unprecedented assault on one of the last frontiers of free contract: the employment relationship. The ability of individuals to choose freely for whom they will work and who will work for them is being undermined by activist jurists and legislators and cheered on by statist academics. Skoppek traces this development in Michigan law, explains the breadth of harm it has caused, and argues strongly for change. 26 pages. … more

Managing the Michigan Solid Waste Stream: Markets or Mandates?

This comprehensive, Michigan specific review of the economics and politics of solid waste management analyzes recycling, incineration, landfilling, and composting. Michigan should manage its solid waste stream by relying upon market mechanisms and avoiding imposing statewide mandates. Includes an analysis of solid waste legislation and certain local government waste management initiatives. 98 pages. … more

Ann Arbor, Michigan: A Privatization Profile

The city of Ann Arbor has a successful privatization track record: vehicle towing, street and sidewalk repair, snow removal, janitorial services, and tree trimming. More can be done and DiGiuseppe specifies possible savings that could be achieved if solid waste collection, landfill management, and parking structures were privatized. 14 pages. … more

Road Map For a Michigan Renaissance

In the aftermath of the 1990 gubernatorial election, innovative proposals for a new incoming administration and legislature were needed. In a 20-point program, The Mackinac Center calls for a Michigan Grace Commission, welfare reform, trucking deregulation, privatization, repeal of the Prevailing Wage law, and specific tax and spending cuts. … more

An Agenda for Solving America's Health Care Crisis

The best way to address the American health care crisis is to put market-based incentives in place where unwise public policies have been imposed. This study reviews the history and causes of national health care problems and proposes remedies such as the creation of medical savings accounts, reform of tax laws, and the repeal of expensive state-mandated health benefits. Released in cooperation with the Dallas-based National Center for Policy Analysis. 33 pages. … more

The Michigan Education Trust: A Political Economy Perspective

Touted as cutting-edge public policy, the MET program is found to be a flawed political promise that might have to be bailed out by state taxpayers. Parents who want to save for their children's education have better options in the private marketplace. Subsequent events led Governor Engler to scrap the program. 25 pages. … more

Michigan's Home Ownership Savings Trust: A Closer Look

The HOST program was created in 1989 ostensibly to assist first-time home buyers in saving for their down payments. Wolfram and Kaza point out the fatal flaws of the plan and expose HOST as a boondoggle of the first order. Their analysis was instrumental in bringing about revisions of the program under Governor James Blanchard and its ultimate abolition under Governor John Engler. 8 pages. … more

Auto Insurance in Michigan: Regulation, No-Fault, and Affordability

Written by one of America's foremost authorities on auto insurance, this study is a thorough review of Michigan's Essential Insurance Act and No-Fault Law. Harrington examines in-depth the structure of rates in the state and explains that they are not the result of price-gouging or insufficient competition. He analyzes the effects of the state's insurance regulations, and makes suggestions that would increase competition, lower costs, and limit the interference of government in a free insurance market. 33 pages. … more

Litigation and the Market: Restoring the Balance Between Individual and Employer Rights

Litigation has become an expensive and prominent component of our economy. There are too many excessive damage awards and too few controls on the length and expense of court proceedings. The author examines product liability and employment contract law and recommends ten specific reforms. 5 pages. … more

Regional Economic Development: Downriver as a Case Study

The seventeen communities of the Downriver Detroit area have traditionally been economically vibrant. Their decline in recent years is due in great measure to excessive tax burdens and the politicization of community services. The authors explain how this area can revive by rolling back property taxes, privatizing a number of municipal functions, avoiding government-directed economic development schemes, and making certain improvements to the transportation infrastructure. The many lessons from the Downriver experience are applicable to communities all across Michigan. 32 pages. … more

Jail Overcrowding in Michigan: A Public Problem With a Private Solution?

Strapped for cash and experiencing soaring costs to maintain over crowded jails, Michigan counties are overdue for privatization. Van Eaton cites substantial cost savings in more than a dozen other states where jail operation and management has been privatized. Michigan state government should allow our 83 counties the freedom to employ this promising option. 26 pages. … more

Tort Law and the Products Liability Insurance Crisis

This report examines the theories behind the products liability insurance crisis, including the idea that the crisis is contrived by the insurance industry. Smith argues that the real source of the problem is judicial changes in tort law that undermine the predictability of risk and the independence insurance markets need to adequately measure risk. He recommends steps that governments should take to solve the crisis and bring down consumer and industry costs. 55 pages. … more

Detroit Metropolitan Airport: A Case for Privatization

The nation's first comprehensive proposal to privatize a commercial airport was inspired by Britain's successful 1987 effort to privatize eight airports, including London's Heathrow. If Detroit Metro were properly privatized, it would benefit county finances, air travelers, and area economic development. … more

The Single Business Tax Burden on Michigan Industries

The Michigan Single Business Tax (SBT) was, at the time of this report's release, the only value-added state business tax system in the U.S. The author explores its history, actual practice, and inherent advantages and disadvantages. Tables of data are provided, showing the SBT burden as a percentage of the Adjusted Tax Base on industries in Michigan. This report is a good overview of the SBT and its impact on the state's businesses. 30 pages. … more

The Michigan Accident Fund: A Need for Privatization

Though prevailing legal opinion had concluded that the Accident Fund, a workers' compensation insurer, had been operating as a private insurer, Attorney General Frank Kelley ruled in 1976 that the Fund was in fact a state agency. Smith examines the controversy ignited by Kelley's ruling, culminating in a state takeover of the Fund in 1989. His powerful case for privatization of the Fund is just as relevant today and, in fact, is a major reason why the Engler administration planned to do just that in 1994. 31 pages. … more

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