Good policy is good politics. After accomplishing so much in 2011 and 2012 to move Michigan forward, progress nearly sputtered to a halt in 2013.
Here's how to get back on track:
-- Pass a broad based marginal rate income tax cut. This is an incentive changing reform that will lead to more jobs, higher incomes and a growing, more competitive state economy. In contrast, boutique tax cuts like vehicle "sales tax on the difference," and political tax changes like increasing homestead property tax exemptions have none of those virtuous effects.
-- Close the school defined benefit pension system to new employees.
-- Require local governments to close their own defined benefit pension systems to new employees.
-- Repeal the state prevailing wage law that prohibits granting government construction contracts to the lowest bidder if a contractor is not unionized.
-- Enact a "no more stringent that federal' law limiting rules promulgated by state environmental and workplace safety regulators.
-- Finish the job on personal property taxes by putting a stake in the heart of this absurd levy on business tools and equipment. Even after parts of it are phased out under the recent reform law, the tax will remain a burden on many commercial firms. (Phase outs are OK, but at the end the tax should be deader than the Dodo for all businesses, regardless of size or type.)
-- Add sunset provisions to all laws that give government bureaucrats the power to write rules, enforce those rules and adjudicate them. Gradually replace those laws with ones that do not grant unelected bureaucrats legislative and judicial powers that undermine the constitution's separation of powers.
-- Stop expanding, and start rolling back, Michigan's "shadow government" of borrow-tax-spend "authorities," "zones," "tax increment finance" schemes, "interlocal agreements," etc.
-- Stop inflating the higher education bubble, and by all means don't put the state in debt to inflate it even further. Rather than allocating appropriations directly to each university, start shifting to a system that gives those dollars to students, who can use them to pursue the post-secondary education opportunities that provide the most value for the money.
-- Stop pretending that spending more on conventional public schools leads to better educational outcomes for children. The evidence shows that it does not. Instead, fund innovative alternatives including online education and greater parental choice.
-- Reverse the accounting change that delivers state tax dollars directly to the school pension fund rather than passing them through school districts. This is harming innovative and successful charter public schools and generating mischievous political games related to how much the state is spending on public education.
-- Repeal Michigan's minimum wage law, don't increase it. As Mackinac Center for Public Policy's director of fiscal policy Michael LaFaive put it, the only true minimum wage is zero, which is what many more low-skill workers will get if the mandated minimum is increased.
-- End corporate welfare handouts. So-called economic development programs are in fact just political development programs that benefit politicians and a handful of lucky winner firms, while doing nothing to grow the state economy or increase the total number of jobs.
-- Eliminate statutory revenue sharing payments to local governments. When the only money local politicians can spend comes from taxes and fees they themselves must authorize, they spend and govern more wisely. (This constraint is the only real and durable "best practices incentive." Legislators will inevitably succumb to pressure and hollow out other forms.)
-- Repeal the Obamacare Medicaid expansion. Instead, join with other states to press for the federal government to "block grant" the program with no strings attached to the 50 state laboratories of democracy. Let states create sustainable low-income health care systems that actually work for the beneficiaries and their people of their states.
-- Privatize some prisons. Not only will the privatized institutions save money, their very existence will create incentives for the non-privatized prisons (and the prison guard unions) to sharpen their pencils and also find ways to run more efficiently and frugally. Prisons are a necessary evil, not a jobs program, and their right cost is the least cost.
-- Repeal the racket known as the three-tier alcohol distribution system, which redistributes tens of millions of dollars from the consumer tier to a tiny, rolling-in-dough special interest tier. Prohibition ended 80 years ago; it's past time to end Michigan's transition out of it.
-- Increase Gov. Rick Snyder's bid to cut $25 million out of wealth redistribution from Michigan taxpayers to film producers by making the total cut $50 million. In other words, zero-out this bizarre form of reverse-Robin Hoodism.
-- Replace the extremely costly Michigan State Police ($639 million proposed for next year) with a much smaller and less costly agency limited to statewide investigations and specialized functions (aviation, dive teams, canines, etc.)
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