all stripes like to talk about reforming government. Once in office, however,
those sentiments quickly dissipate as lobbyists, vested interests, party
leaders, campaign consultants and others make their voices heard. So the fact
that several good-government policies — including dozens put forth by the
Mackinac Center — have been introduced as legislation or become law is a
promising development for Michigan residents.
In less than six months, the new Legislature and Gov. Rick
Snyder have made the following changes in law, all of which had been
recommended by the Center:
- Reduced and
simplified business taxes to spur job
- Eliminated tax breaks for favored industries
- Significantly reduced film industry subsidies
- Allowed municipal or school district union
contracts to be set aside to prevent insolvency
- Encouraged schools and municipalities to seek
competitive bids for services
- Encouraged schools to purchase less costly
health insurance than MESSA, the third-party administrator of the Michigan
- Linked state school aid and municipal revenue
sharing to local cost control
- Eliminated the retail “item pricing law.”
It’s a good beginning,
but more needs to be done to transform the state and its economy. Fortunately,
Center ideas remain in demand in Lansing. Five Center analysts testified
before legislative committees in the
first quarter of 2011, and several others have shared their expertise since.
On April 12 and May 17,
Patrick Wright, director of the Mackinac Center Legal Foundation, testified
before the House Families, Children and Seniors Committee on the forced
unionization of home care workers. In May he was joined by Sherry Loar, the
MCLF’s lead client in a lawsuit to end this unconstitutional practice. The
committee was considering legislation introduced by Rep. Paul Opsommer,
R-Dewitt, that would prevent anyone from being designated a public employee
without the consent of the Legislature. The bill has since passed the House,
and the budget deal zeroes out funding for the state’s shell “employer” of day
care providers, the Michigan Home Based Child Care Council.
Fiscal Policy Analyst James Hohman spoke on the need to
reform the Michigan public school teachers’ retirement system. He told the
Senate Education Committee on April 13 that the current system was “risky,
expensive and likely unsustainable.”
April 20 found Paul
Kersey, director of labor policy, speaking to the Michigan House Education
Committee on legislation involving penalties for illegal teacher strikes.
Current penalties make the teacher strike ban difficult to enforce. Earlier in
the year, Kersey suggested that teachers unions that conduct illegal strikes
should lose their collective bargaining power for at least three years. By
April, amidst rumors of strikes, the House took up two bills to put teeth into
the ban. Testifying on these bills, Kersey said: “Collective bargaining
(for government employees) is a privilege, not a right. An illegal
strike is the ultimate abuse of that privilege.”
testimony, one of the bills was modified to include automatic decertification
of a union after an illegal strike.
Also, on the heels of
Fiscal Policy Director Michael LaFaive’s testimony in February on the Michigan
business tax, the Legislature has passed and the governor has signed a repeal
of the MBT, replacing it with a much simpler flat 6 percent corporate
LaFaive had told the
Senate Finance Committee, “As you know, the MBT is a complex and widely hated
business tax that replaced an equally complex and widely hated business tax.”
The tax reform will also end the business tax credit regime, much of which
created an unfair playing field for Michigan businesses.
The new law, Hohman
says, will make Michigan a better place to do business.
Similarly, the Michigan
Economic Development Corp. announced it will become more transparent, a move
long advocated by LaFaive. In 2009, he challenged the MEDC to post the
names of companies receiving tax incentives and the value of other state
and local incentives they are awarded. The MEDC is now doing so.
The state will also
stop touting “indirect” jobs numbers in MEDC reports, another
transparency-enhancing idea. Instead, the MEDC will only count actual new jobs
created by the specific business receiving the credit.
budget includes a requirement for competitive bidding for prison services,
as LaFaive and other Mackinac Center analysts have suggested.
Another Mackinac Center
initiative, Benefits in Balance, gained traction as the governor and
Legislature wrestled with the state budget. As part of Gov. Snyder’s plans to
cut state revenue sharing to local governments, local governments must make
certain reforms to receive some of the revenue. Many of these requirements,
related to employee benefits and other spending reforms, are suggested at
In another effort to
bring benefits into balance, the state Senate passed legislation to require
public employees to pay at least 20 percent of their health care premiums. As
Center Education Policy Director Michael Van Beek has found, most school
districts’ teacher contracts do not require any employee contribution to health
care costs, and the districts that do generally require a very small percentage
— meanwhile, the average private-sector employee contribution to health care
costs is about 20 percent.
This disparity has been
pointed out in Michigan Capitol Confidential (see article on back page), as
well as in a piece by Detroit Free Press editorial page editor Stephen
Henderson calling for employee benefit reform. The 80-20 legislation is
currently in the House Oversight, Reform, and Ethics committee.
This is an exciting time
for Michigan, with many opportunities for needed reform. The Mackinac Center
will continue to work toward freedom in Michigan’s schools, homes and