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.
Tough times, tough decisions. But also magnificent opportunities. That’s what a looming state budget deficit means for Gov. Jennifer Granholm and Michigan’s newly elected 92nd Legislature. Make no mistake about it: The soft economy and resulting decline in state revenues will dominate politics in Lansing this year as officials struggle to fulfill the state’s responsibilities and its constitutional mandate to balance income and expenses. How officials respond will be determined by whether they see our situation as a crisis to be survived, or an opportunity to be welcomed.
State programs will be under the microscope, scrutinized in more detail than they have been in perhaps a decade. Priorities will be re-examined, and some programs may be eliminated. Others will be pared back. The state workforce will shrink. Certain government duties, once regarded as sacrosanct, will be found to be expendable after all. Adjustments of one degree or another will be undertaken within all 20 state departments. Ingenious and compassionate private citizens and organizations will surprise skeptics by expanding or arising to do what had recently been an activity of the state.
As challenging as the situation may seem, we must keep it in perspective. First, state government is not the only means, nor necessarily the best means, for meeting human needs. Second, state government is not the only entity in Michigan that’s having a difficult time. Hundreds of thousands of Michigan families, nonprofits, and businesses are, too. Indeed, it’s precisely because those families and business are in trouble that the state is in trouble. We should never forget that the state has nothing to spend for anybody except what it first takes from somebody. And the state’s first priority ought to be the fiscal health of the hard-working people who, as taxpayers, have to pay the state’s bills before they pay their own. When they are not unduly burdened by taxes, they have less need for assistance themselves and more ability to help those who do need assistance.
All across Michigan, citizens are coping with the challenges of an ailing economy. And they are coping by re-examining their spending. They are re-prioritizing, and doing without some things they’d love to have. They are hiring less, spending less, and taking fewer and shorter vacations closer to home. They are stretching further the dollars they have, and generally exerting the discipline necessary to weather the storm. Why should state government not do the same? In fact, why wouldn’t we welcome this as an opportunity for officials to demonstrate the discipline and prudence we expect from them?
Another matter that should inform the budget debate in Lansing is the fact that Michigan families and businesses are shouldering a tax burden that is still above the average among the 50 states. What we get in exchange is a mixed bag. We get decent roads and good schools in some areas. But more often than not we get excessive construction costs, inefficient bureaucracies, and schools that parents and children are desperate to escape.
Due in large measure to rising property tax rates and assessments, state and local taxes actually have risen since 1993, the year before Proposal A passed, from 10.7 percent of total personal income in Michigan to 10.8 percent in 2000, the most recent year for which numbers are available. The state’s Single Business Tax exacts a “take” that represents a larger portion of business income than that of perhaps any corporate income tax in the other 49 states. Even a May 2002 report from the Michigan Economic Development Corporation showed that Michigan ranks 16th among 17 peer states in business costs (meaning that 15 of the 17 states with whom we compete have lower costs). Michigan simply must make more progress in reducing the financial burdens it imposes on its workers, families and businesses. Because we live in a competitive and highly mobile world, we cannot afford to do otherwise.
Gov. Granholm and the Legislature can pursue any number of courses as they navigate today’s troubled fiscal waters. On the one hand, they could ignore the difficulties faced by the state’s citizens and simply raise taxes. That would drive people and businesses elsewhere, and in the long run undermine the state’s financial health for many years. Until the early 1990s, that’s what Michigan often did, inspiring the all-too-familiar line that the last person to leave the state should turn the lights out. On the other hand, the governor and Legislature could follow the example of most of the state’s citizens who know what to do when times are tough: Make tough decisions.
There is a magnificent opportunity in these difficult times to make a huge difference in how state government relates to its citizens — to regroup, stick to the basics and do them well, and trust the people. This is a time to strengthen civil society — that network of private institutions, community associations, schools and religious organizations, families and friends and coworkers, and all their voluntary, from-the-heart interactions. There is room for politics in our lives, but most of what enriches and defines us as a progressive and compassionate people emanates from other, deeper sources.
As government grows, civil society shrinks. When government moves beyond its core functions, it does not create things out of thin air so much as it displaces what a free people would choose to do. And it ends up performing too many tasks too poorly, including the ones we absolutely must rely upon for the sake of safety and basic, essential services. If this is a radical notion, then America was founded on radical notions.
For all people interested in the advancement and enrichment of our culture, this is a crucial observation with far-reaching implications. Cultural progress should not be defined as taking more and more of what other people have earned and spending it on “good” things through a government bureaucracy. Genuine cultural progress occurs when individuals solve problems without resorting to politicians, or the police and bureaucrats they employ. How can we restore and strengthen the attitudes and institutions that formed the foundation of American civil society?
Certainly, we can never do so by blindly embracing government programs that crowd out private initiatives or by impugning the motives of those who raise legitimate questions about those government programs. We cannot restore civil society if we have no confidence in ourselves and believe that government has a monopoly on compassion. We’ll never get there if we tax away large portions of people’s earnings and then, like children who never learned their arithmetic, complain that people can’t afford to meet certain of their needs.
We can advance civil society only when people get serious about replacing government programs with private initiative, when discussion gets beyond such infantile reasoning as, “If you want to cut government subsidies for Meals on Wheels, you must be in favor of starving the elderly.” Civil society blossoms when we understand that “hiring” the expensive middleman of government is not the best way to “do good”; that it often breaks the connection between people in need and caring people who want to help. We make progress when the “government is the answer” cure is recognized for what it is: false charity, a cop-out, a simplistic non-answer that doesn’t get the job done well, even though it allows advocates to believe they’ve done the right thing.
The kind of leadership we at the Mackinac Center for Public Policy hope to see from Lansing in 2003 and beyond is defined by adherence to the principle enunciated by Thomas Jefferson in his first inaugural address:
. . . a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government . . .
In accordance with this Jeffersonian principle, the Legislature and the governor should evaluate each item in the state budget, asking 12 key questions:
· Does the item weaken communities by assuming a responsibility best left to private families, charities or firms?
· Does the item duplicate what other state agencies or the federal government are doing in that area?
· Does the item primarily benefit a single favored constituency or region rather than the state as a whole?
· Are direct users or beneficiaries of the service paying a reasonable amount of the cost?
· Does the item create or expand an “entitlement” that cannot be reasonably withdrawn if necessary or advisable in the future?
· Has the item received significantly more money in recent years but not used that money in the most effective way?
· Has the item been funded in the past by deceptive or inappropriate legislative or executive actions?
· Does the item use taxpayer funds for political advocacy or to discriminate against racial or ethnic groups?
· Does the item discourage self-help and personal independence unnecessarily or encourage reliance upon government?
· Does the item yield benefits commensurate with costs?
· Does the item force private businesses to unfairly compete with the state?
· Does the appropriation growth of an item exceed the rate of inflation or real personal income growth?
The Mackinac Center for Public Policy recognizes that not all budget cuts are created equal. Some represent the proverbial “low-hanging fruit” — easy to reach, if not painless. Other budget cuts would surely entail at least short-term pain. We encourage readers to consider the potential for long-term gain — from all the cuts recommended herein, whether they be “low-hanging fruit” or, to mix metaphors, the “sacred cows” of the Lansing establishment.
Michigan citizens have reason to be encouraged by the statements made by incoming Gov. Granholm and her representatives since the November 2002 election — statements to the effect that she will address the budget deficit from the spending side and avoid raising the tax burden on still-overburdened Michiganians. If she follows through and makes the tough decisions required in these tough times, she will truly display the kind of leadership she was elected for, and the Mackinac Center for Public Policy will be in the forefront of a cascade of praise that will be due her.
Scrutinizing every nook and cranny of state government, raising questions about previously unquestioned premises, thinking creatively about how to do things better, if the state is to continue doing them at all — these are healthy, positive attributes of forward-looking leadership in a free society. While some may approach the state’s deficit with their minds already closed to the concept of downsizing the public sector, we ask readers of this document to think progressively. Why must the state do things as it always has? Why can’t — and why shouldn’t — private people and private institutions do more? Will they ever do more if we take for granted that they can’t or shouldn’t? With government at all levels consuming over 40 percent of national income — more than ever before in our nation’s history — why isn’t now a good time to make a big difference?
The following analysis examines the 2003 fiscal year state budget and makes recommendations for fiscal year 2004. If the legislature adopts the recommendations in this study it will be able to close the estimated $1.5 billion General Fund/General Purpose (GF/GP) budget deficit that is expected in fiscal year 2004, with millions to spare. Adopting every recommendation in this study would reduce overall state spending by $3.7 billion, which constitutes 14.2 percent of the total state budget. Of this total, $1,527,814,522 is from the GF/GP portion of the budget. We also recommend a 50 percent reduction in the state revenue sharing that is not constitutionally mandated, producing savings of $344,665,000, which should be redirected to the state’s GF/GP fund. In addition, we recommend the sale of three state properties worth an estimated $69,600,000, a fee hike worth $25,280,155, the elimination of the Life Science Corridor Initiative, which would save another $45,000,000; and use of the $11,500,000 in annual revenue from the state’s Indian Gaming Compact. Together, these savings and revenue enhancements exceed $2 billion.
Most complaints leveled against the proposals in this study will fit into one of two categories. First, people will argue, “Why cut a program that constitutes such a small proportion of the total budget?” And second, people personally affected by the program cut, such as recipients of direct subsidies, will oppose the proposal on the basis that it will affect them disproportionately. Both of these arguments are easily refuted when examined more closely. In the first case, while it is quite true that eliminating one program will have little effect on the overall size of the budget, many of these cuts will certainly affect some people more than others, but this is not coincidental — it is these same people who are benefiting disproportionately by the very presence of the programs. What is unjust or unfair is not the elimination of the programs, but their creation in the first place.
Over the past 12 years, the Engler administration took steps to reduce the size of state government. But there is far more work to be done. It is the Mackinac Center for Public Policy’s hope that Gov. Granholm will take much of Lansing’s power and return it to where it rightfully belongs: the homes of families and individuals who are the citizens of the Great Lakes State.
One final word is of introduction is necessary. It is important to note that the title of this study is not, “Reducing the Proportion of State Spending Paid by State Taxes.” A large portion of Michigan’s budget comes from the federal government. In this study we recommend cutting many expenditures funded entirely by Washington. The source of the funding is not the issue here. Restoring civil society requires reducing the role of coercive institutions (government) and increasing the role of formal and informal voluntary associations in improving peoples’ lives and solving problems. If a state function is outside the proper role of government, the fact that the money goes through Washington first is of secondary importance. “That’s federal money,” is no excuse for continuing such functions.
Each proposal within this analysis contains information described as the “appropriation breakdown.” The numbers in these breakdowns refer to the origins of the funds used to pay for the program. There are four possible areas from which a program can be funded: Interdepartmental Grants, Federal Funds, General Fund/General Purpose (GF/GP) Funds, and Special Revenue Funds.
Interdepartmental Grants are exactly what the name implies: funds transferred from one state department to another. For example, if the Department of Commerce were to assume some of the computer processing responsibilities of the Department of Labor, Labor would issue a grant to Commerce to help pay for the provision of that service.
Federal Funds are funds sent from Washington to Lansing to subsidize the operations of various state programs. The source of Federal Funds is, of course, federal revenues, which are comprised of federal income tax, fuel tax, capital-gains tax, and tariff receipts, just to name a few sources.
General Fund/General Purpose Funds are funds gained by the state from three main areas: state personal income taxes, state sales and use taxes, and single-business and insurance taxes. These taxes are broad-based and (in theory, if not always in practice) intended to fund programs that also have broad-based effects.
Special Revenue Funds are comprised of many different types of state revenues. The most common type of Special Revenue Funds, however, is targeted taxes, user fees, and regulatory fees.
Total Budget Savings and Revenue Enhancements by Category
Summary of Recommendations**
|
Actual
Appropriation |
Recommended
Appropriation |
Difference |
Percent
Change |
Department
of Agriculture |
$96,470,700 |
$62,334,615 |
$34,136,085 |
35% |
Department
of Attorney General |
$61,757,600 |
$61,757,600 |
$0 |
0% |
Department
of Career Development |
$459,846,600 |
$0 |
$459,846,600 |
100% |
Consumer
and Industry Services |
$555,001,500 |
$480,465,882 |
$74,535,618 |
13% |
Department
of Civil Rights |
$14,367,700 |
$14,367,700 |
$0 |
0% |
Department
of Civil Services |
$31,585,200 |
$28,067,175 |
$3,518,025 |
11% |
Community
Colleges |
$321,732,319 |
$292,038,170 |
$29,694,149 |
9%
|
Department
of Community Health |
$9,799,182,300 |
$9,184,221,401 |
$614,960,899 |
6% |
Department
of Environmental Quality |
$404,819,600 |
$396,344,250 |
$8,475,350 |
2% |
Department
of Management and Budget |
$188,098,300 |
$185,893,000 |
$2,205,300 |
1% |
Department
of Natural Resources |
$257,719,600 |
$239,005,400 |
$18,714,200 |
7% |
Department
of Education |
$214,393,000 |
$222,944,100 |
($8,551,100) |
-4% |
Family
Independence Agency |
$4,074,490,500 |
$3,142,731,580 |
$931,758,920 |
23% |
Higher
Education |
$1,943,345,166 |
$1,651,559,042 |
$291,786,124 |
15% |
Information
Technology |
$424,006,800 |
$424,006,800 |
$0 |
0% |
Department
of History, Arts, and Libraries |
$71,486,200 |
$20,764,230 |
$50,721,970 |
71% |
Department
of Corrections (Option II) |
1,704,350,600 |
1,450,588,385 |
253,762,215 |
15% |
Department
of Transportation |
$3,125,181,500 |
$2,782,930,225 |
$342,251,275 |
11% |
Department
of Military and Veterans Affairs |
$103,364,700 |
$73,346,500 |
$30,018,200 |
29% |
Secretary
of State |
$180,055,800 |
$173,917,800 |
$6,138,000 |
3% |
Department
of State Police |
$415,678,200 |
$345,257,732 |
$70,420,468 |
17% |
Michigan
Economic Development Corp. |
$146,181,500 |
$0 |
$146,181,500 |
100% |
Department
of Treasury |
$1,961,566,900 |
$1,526,574,600 |
$434,992,300 |
22% |
Total: |
$26,554,682,285 |
$22,759,116,187 |
$3,795,566,098 |
14.2% |
Summary of Savings by Revenue Source
Interdepartmental Grants |
$12,197,610 |
Federal Funds |
$1,303,128,215 |
General Fund/General Purpose (GF/GP) |
$1,527,814,522 |
Special Revenue Funds |
$958,281,751 |
Total: |
$3,801,422,098 |
Other Funds (GF/GP) |
$5,856,000 |
*This figure is understated by $5,856,000 to reflect the changes in appropriation amounts after the fiscal year 2003 budget was passed. The MEDC received $8,856,000 in additional revenue after the summer cigarette tax increase, and then had its budget cut by $3 million due to Executive Order 2002-22.
**See the next page for a summary of savings and revenue enhancements.
Total Budget Savings and Revenue Enhancements by Category
General Fund/General Purpose Recommendations |
$1,527,814,522 |
State Revenue Sharing from Special Revenue |
$344,665,000 |
Sale of State Fair Grounds |
$59,600,000 |
Sale of Ralph A. MacMullan Conference Center Property |
$10,000,000 |
DNR State Park Fee Increase |
$25,280,155 |
Strategic Fund Revenue Supplemental Appropriations* |
$5,856,000 |
Life Science Corridor Initiative |
$45,000,000 |
Indian Gaming Compact Revenue** |
$11,500,000 |
TOTAL SAVINGS |
$2,029,715,677 |
*The Strategic Fund received additional funding after its original budget had been passed. The $5.8 million is the GF/GP component of the supplemental funding.
**With the elimination of the Michigan Economic Development Corporation, revenue generated from the state’s Indian Gaming Compact could be redirected to the GF/GP component of the state budget.
Appropriation
Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$10,953,800 |
$9,342,000 |
$1,611,800 |
Federal Funds |
$ 6,639,500 |
$4,505,500 |
$2,134,000 |
General Fund/General Purpose |
$38,407,400 |
$33,210,755 |
$5,196,645 |
Special Revenue Funds |
$40,470,000 |
$15,276,360 |
$25,193,640 |
Gross
Appropriation |
$96,470,700 |
$62,334,615 |
$34,136,085 |
Following is a list of Michigan Department of Agriculture (MDA) programs and recommendations to downsize, outsource, or eliminate. The MDA was created in 1921 by the Michigan Legislature. According to the department’s official web site, its mission is "to serve, promote and protect the food, agricultural, environmental and economic interests of the people of Michigan."[2] This sweeping statement effectively authorizes the department to involve itself in aspects of civil society in which government action may be unnecessary or counterproductive, distorting market mechanisms and incentives in the process. Accordingly, the Legislature should reduce and/or eliminate low-priority programs, including those listed below. Doing so will reduce the MDA budget by 35 percent.
Program: Commissions and boards
Appropriation: |
Interdepartmental Grants: |
$8,800 |
|
Special Revenue Funds: |
$15,000 |
|
GF/GP: |
$39,500 |
|
Total: |
$63,300[3] |
Program Description:
The Commissions and Boards line item subsidizes the work of the Agricultural Commission, the Marketing and Bargaining Board, the Michigan State Fair Board, and the Upper Peninsula State Fair Board. The Agricultural Commission is a five-member bipartisan group of citizens appointed by the governor and subject to Senate confirmation. Members serve four-year staggered terms. By law, not more than three members may be of one political party. The commission appoints the director of the MDA and approves all rules and regulations promulgated by the MDA.
The Marketing and Bargaining Board administers Public Act 344 of 1972, which permits producers of perishable fruits and vegetables to be represented in negotiations for the price of commodities by an accredited agricultural association. Functions of the board include: determining the definition of a commodity bargain board unit, administering accreditation procedures, determining members of the accredited bargaining units, and protecting the rights of both growers and handlers. The State and Upper Peninsula Fair Boards oversee the operations of their respective fairs.
Recommended Action:
The MDA should be restructured according to the design of many other departments of state government, which do not have commissions to oversee department management. This could be accomplished in part by eliminating the Agricultural Commission, allowing the governor to choose the director, and granting the director the responsibility for setting department policy.
The Marketing and Bargaining Board should be eliminated, and its functions handled by the private sector. Both the producers and the processors of fruit and vegetables have every incentive to make sure that their negotiations over the price of their products go smoothly and without error. There is no reason to believe that agricultural producers, wholesalers and processors are any less able to conduct commerce than producers, wholesalers and users of other goods. State funding of the fair boards should be eliminated along with state funding of the fairs themselves. There is no reason to maintain them once the fairs are privatized (see recommendation on pages 14-15). Savings: $63,300.
Program: Unclassified positions
Appropriation: |
Special Revenue Funds: |
$80,500 |
|
GF/GP: |
$407,700 |
|
Total: |
$488,200[4] |
Program Description:
“Unclassified Positions” reflects employees who fall outside the state’s classified civil service. The positions include, appointments such as the Director of MDA, State Fair Manager, and Legislative Liaison.
Recommended Action:
With the elimination of approximately 35 percent of the Agriculture budget comes the ability to downsize these appropriations commensurately, producing an additional savings of approximately $170,870. This is an estimate only, and a detailed analysis of the impact of programs reductions is needed to determine exact savings. Savings: $170,870.
Program: Executive direction
Appropriation: |
All from GF/GP: |
$525,700 |
|
Total: |
$525,700 |
Program Description:
“Executive Direction” provides support services to the director of MDA. In other words, they are the director’s staff.
Recommended Action:
With the elimination of approximately 35 percent of the Agriculture budget comes the ability to downsize these appropriations commensurately, producing an additional savings of approximately $183,995. This is an estimate only, and a detailed analysis of the impact of programs reductions is needed to determine exact savings. Savings: $183,995.
Program: Management services
Appropriation: |
Special Revenue Funds: |
$109,900 |
|
GF/GP: |
$3,587,300 |
|
Total: |
$3,697,200[5] |
Program Description:
Management Services has historically provided financial administration and computer services. Computer services currently are handled on a line item of their own.
Recommended Action:
With the elimination of approximately 35 percent of the MDA budget comes the ability to downsize the Management Services division commensurately, producing a substantial additional savings of approximately $1,294,000. As a result of the state’s 2002 “early out” program, which allowed state employees to retire earlier than previous rules allowed, the MDA already has reduced Management Services by 17 percent without eliminating any of the programs analyzed in this policy brief. The commensurate reduction of 35 percent may be a conservative estimate of what could be accomplished if policy-makers adopt Mackinac Center recommendations. This is an estimate only, and a detailed analysis of the impact of programs reductions is needed to determine exact savings. Savings: $1,249,020.
Program: Statistical reporting service
Appropriation: |
All from GF/GP: |
$435,100 |
|
Total: |
$435,100[6] |
Program Description:
The Statistical Reporting Service (SRS) maintains an agricultural database under an agreement with the United States Department of Agriculture (USDA). The agreement is designed to create and maintain a statistical service of use to the state and to the USDA. The SRS attempts to “keep accurate, current, and historical data for all commodities in the program.”[7]
Recommended Action:
The state could extricate itself from its agreement with the USDA immediately. The functions associated with the agreement, if necessary, can be handled by the agriculture industry itself. Most non-agricultural industries provide market information without government assistance. There is no reason to expect any less from the agriculture industry. Indeed, private organizations exist in almost every area of commerce to survey producers and consumers and develop detailed and reliable market and safety information of the same kind provided for the agriculture industry through the SRS. This is true in every industry, from automobiles, computers and telephones, to snack food and insurance policies.[8] Indeed, both government and business routinely rely on private statistical survey research organizations, such as the Rockville, Md.-based WESTAT, or Mathematica, Inc., of Princeton, NJ. There is no reason to believe that the Michigan agricultural industry or federal and state governments could not look to organizations such as these for data collection and distribution. Savings: $435,100.
Program: Michigan State University
Appropriation: |
All from Federal Funds: |
$210,000 |
|
Total: |
$210,000[9] |
Program Description:
This line item represents a grant from the federal government. It is designed to provide education and research for EPA plans involving the use of pesticides.
Recommended Action:
This line item could be struck from the budget. The MDA should not act as a pass-through agency for any Michigan university. This sort of “hidden funding” obscures the true cost of operating Michigan’s extensive public university system. If Michigan State University has an interest in ongoing pesticide research, it could appropriate the money from the $326 million it will receive from the state in fiscal year 2003, or, federal law permitting, apply for a grant to the federal government directly.[10] An even better solution would be to use money from the considerable private donations MSU receives each year. Indeed, since July of 1999 alone MSU has raised $80 million just for its endowment (which now stands at $800 million); another $420 million was raised in cash, pledges and deferred gifts for annual expenditures; excluding the $46 million that was raised privately just to fund facility repair and construction. Whether or not MSU would be willing to support the program with money it earned by soliciting donations for the university is the perfect litmus test for evaluating the importance of the EPA program to MSU. This will force MSU officials to look harder at whether its pesticides program is truly worthwhile. Savings: $210,000.
Program: Cooperative resources management initiative
Appropriation: |
All from Interdepartmental Grant: |
$1,000,000 |
|
Total: |
$1,000,000[11] |
Program Description:
According to the state’s House Fiscal Agency, a nonpartisan agency that gives expert financial assistance to the House Appropriations Committee, this appropriation helps coordinate efforts of local, state and federal governments with private-sector conservation organizations who “work together to manage land in Michigan.” It is designed to match private landowners with government partners who help the landowners design an effective land-management plan.
Recommended Action:
The state could remove itself from this initiative entirely. Private conservation groups are formed around the self-interest of the individuals who agree with the groups’ missions. As a result, they maintain sufficient incentives to coordinate their own efforts without help from the state or other units of government. Savings: $1,000,000.
Program: Migrant labor housing
Appropriation: |
All from GF/GP: |
$550,000 |
|
Total: |
$550,000[12] |
Program Description:
According to the state of Michigan, the Migrant Labor Housing program has two components. The first component involves licensing and inspection of any site occupied by more than five migrant workers. The second component involves grants for the construction of migrant housing.
Recommended Action:
To former Gov. Engler’s credit, he reduced the appropriation for this program by 38.5 percent over the previous fiscal year (ending in 2002), but Gov. Granholm could go further and remove the state entirely from this program. Migrants have been finding satisfactory places to live on their own accord since long before the state began inspecting and licensing migrant housing in 1978.[13] Prior to 1978, every housing situation may not have been ideal — from either the observers’ or migrants’ perspective — but that does not mean people were worse off then as opposed to now, on net balance. The transitory needs and wants of employers and employees are too fluid and complex to be confined to the one-size-fits-all standardization model offered by a state program. The bottom line is that, unless adult migrant workers are being illegally defrauded or coerced, they are quite capable of accepting or rejecting housing based on how they themselves perceive the benefits and costs of living and working in a particular area.
In removing itself from this role, the state may wish to ease its financial and regulatory transition in one of two ways: by privatizing housing inspections in part or whole. The Mackinac Center for Public Policy has long recommended contracting out to private agencies for state and local inspections of housing and housing-related items. This form of partial privatization would work by having the MDA contract out inspection of the 950 sites under its jurisdiction. Such a move could shave 20 percent from this line item. (For more on this subject, see “Looking Over Private Inspections,” in the Winter 2001 edition of Michigan Privatization Report.[14])
The state could, at a relatively small cost, alert those companies whose clients include farmers living in migrant housing to the fact that the state no longer intends to regulate such housing. This would serve to draw insurers’ attention to the risk of having to make more payouts based on the provision of regulation-free housing by their clients. Insurers may or may not mandate similar private inspections and then reflect any concern that they may have by raising or lowering premiums paid by farmers to protect insured assets. Savings: $550,000.
Program: Laboratory analysis program
Appropriation: |
Interdepartmental Grants: |
$181,900 |
|
Federal Funds: |
$300,000 |
|
Special Revenue Funds: |
$1,474,400 |
|
GF/GP: |
$4,365,200 |
|
Total: |
$6,321,500[15] |
Program Description:
The Laboratory Analysis Program provides chemical testing and diagnostic services of a variety of substances for the state, to protect the health and welfare of citizens. For instance, farmers may have seeds tested for quality through this program.
Recommended Action:
There are two specific areas in “laboratory analysis” that should be removed from the MDA budget: equine drug testing and seed testing.
Equine drug testing: While it is true that the horse racing industry may wish to monitor drug levels in the bloodstreams of race horses to ensure the integrity and quality of the races, such an issue need not involve state government. Many sports monitor similar things without the benefit of state intrusion. For example, in weightlifting, swimming, and track and field, competitors are privately tested for legal and illegal consumption of performance enhancing drugs, and there has been very little trouble enforcing anti-drug rules. Major League Baseball soon may begin testing its players for anabolic steroids. The horse racing industry has, like the baseball and weightlifting industries, a vested interest in seeing their sport attain a high level of respect and legitimacy. Indeed, without spectator confidence in the legitimacy and fairness of the races, the horse racing industry would quickly perish. As a result of this incentive, the industry can be expected to regulate itself. Savings: $509,000.
Seed testing: The state Laboratory Analysis Program also analyzes seeds for farmers and seed dealers to ensure the quality of their seeds. This represents another corporate-welfare line item of the type found elsewhere in the MDA budget. For-profit industries have every incentive to ensure that the raw materials they use to make their products meet their standards of quality. If the industry believes that it needs a central source of analysis to check the quality of its seeds, it should use one of the many existing private agricultural associations — or create a new one — to do so. Savings: $500,000 ($97,000 from GF/GP).[16]
Program: USDA monitoring program funds
Appropriation: |
All from Federal Funds: |
$1,824,000 |
|
Total: |
$1,824,000[17] |
Program Description:
The USDA’s pesticide data program is a federal program administered by state governments. Michigan is one of nine states participating in the program voluntarily.[18] The program is designed to survey data and prepare reports on residue from pesticide chemicals.
Recommended Action:
Michigan could easily opt to end participation in this program. As noted above for the SRS program, most non-agricultural industries obtain market information without government assistance. There is no reason to expect any less from the agriculture industry. This program also raises the issue of whether the state of Michigan should accept federal funding for unnecessary or questionable programs, a practice which is commonly justified by the argument that if Michigan doesn’t take the money, someone else will, and that Michigan citizens somehow will be worse off. However, such federal funds should not be viewed as “cost-free” gifts that provide Michigan with jobs and benefits.[19] After all, funding originates in Michigan and her sister states in the first place. Because the federal government redistributes money back to the states through its highly political and expensive bureaucracy, Michigan and other states may get back less than they send. This phenomenon led one commentator to remark that when our money goes to Washington it tends to have a night on the town before it comes back to us. Michigan should show leadership in this area by repudiating such funds and demanding that the federal government take less from state citizens in return. Savings: $1,824,000.
Program: Market Development (Section 109)
Appropriation: |
Interdepartmental Grants: |
$603,000 |
|
Federal Funds: |
$100,000 |
|
Special Revenue Funds: |
$260,000 |
|
GF/GP: |
$2,492,800 |
|
Total: |
$3,455,800[20] |
Program Description:
The Market Development program is effectively a marketing department for the state’s private agriculture industry. It also subsidizes some charitable work with food banks in the state.
Recommended Action:
All line items underneath Section 109 of the MDA budget for the 2003 FY should be eliminated. There are no functions in this section of the budget that cannot or are not already being performed by private for-profit and nonprofit organizations. The following is a description of each individual program, and the amount that could be saved by elimination.
Marketing and Emergency Management: This program is designed to “serve as a catalyst, coordinator, and resource to provide promotional marketing, and economic development opportunities for Michigan’s food and agricultural industry.” It is also dedicated to “protecting the state’s food and agriculture resources in times of emergencies.”[21] Unfortunately, the marketing component of this line item is best described as corporate welfare for the agriculture industry. Agriculture is a profit-making industry and should not receive what are essentially marketing subsidies any more than the auto, computer, and defense industries should. A prime example of the department’s unnecessary marketing efforts is the free distribution of Michigan Wine Country, a trade publication of the Michigan wine industry. (See subsequent discussions on the state’s export marketing program on page 13.) Savings: $2,005,600.
Agriculture Development: The Agriculture Development Office was created in 1997 to help improve “economic and environmental sustainability and viability of Michigan’s food and agriculture industry ... ”[22] The office also “focuses on expansion of food and agricultural value-added processing ... ”[23] For example, in September 2000, the MDA reached a grant agreement with the Midwest Nut Producers Council in which it would grant $82,255 in federal and state money to “develop, test and devise a marketing strategy for two products, a chestnut puree and chestnut crumble.”[24] The grant will help the industry “work with 15-20 Michigan chefs to test and evaluate new chestnut products,”[25] and prepare recipes in their own restaurants using chestnuts, interview customers about the dishes, and provide feedback to the grantee.
Private industry has its own incentives for adding value to agricultural products — profit being one of them. By providing government money for such research, the state is, in effect, socializing the risk of the agriculture industry while helping to ensure profits that the industry may not otherwise see. In addition, the Agriculture Development Office may actually hurt agricultural processing businesses. It has used its own resources in conjunction with the Michigan Economic Development Corporation (MEDC) to grant special favors to particular firms, while giving none to their in-state rivals. The Summer 2002 issue of the Mackinac Center’s Michigan Privatization Report, described how “Agricultural Processing Renaissance Zones” may do more harm than good.
The newest type of renaissance zone created in Michigan is known as Agricultural Processing Renaissance Zones, of which there are three, two in Oceana County and one in Ionia. All illustrate two basic problems with state favoritism in the name of “economic development”: 1) It’s unfair to businesses that do not receive the tax advantages offered; and 2) Officials can’t prove that the development they claim as proof of the zone’s success wouldn’t have taken place without their interference.
Targeted tax relief places at a competitive disadvantage those businesses that do not get the state favors. This is why some Michigan agricultural companies, in January 2001, actively opposed zones being granted around the properties of their competitors, Peterson Farms, near Shelby, and Gray & Company in Hart.
One of the zones’ critics, who asked to remain anonymous for fear of state retribution, told Michigan Privatization Report, “The state has put me at a terrible disadvantage by giving my competition substantial tax relief. How can Lansing bureaucrats possibly believe that hurting me will help the economy?” This was generally the nature of other processing companies’ opposition, though several firms’ officers noted that they were not opposed to the idea of helping the agricultural industry. The state took testimony in person and by letter from businesses opposed to the way these zones were being used, but plowed ahead anyway.
All of this might be tolerable if state officials could prove that renaissance zones actually produce a positive net benefit to the economy. But the literature on the subject is very clear: Enterprise zones have little measurable impact on economic growth and employment — but they do have huge costs.
Nationwide, research indicates that enterprise zones have had a negligible impact on economic growth and development. Professors Thomas Lambert and Paul Coomes of Spalding University and the University of Louisville, respectively, studied one of the nation’s oldest and biggest enterprise zones in Louisville, Ky., and used “many measures to try and give the program every chance of success.” Yet the evidence, published last May, showed that after 14 years “it is difficult to document that this program has been effective.”
Other studies concur. In their paper, “Enterprise Zones and Local Employment: Evidence from the States Programs,” published in Regional Science and Urban Economics, Daniele Bondonio and John Engberg found “zero impact” on local employment from enterprise zones and that “the level of the monetary value of the incentives awarded to zone businesses does not noticeably contribute toward enhancing the impact on local employment.”[26] Fortunately, the legislation for agricultural processing zones was sunset for the end of 2002 and the state can no longer use this particular device for agricultural economic development.
(For more on this subject, see “Make Michigan One Big Renaissance Zone,” in the Summer 2002 Michigan Privatization Report.[27]) Savings: $742,400.
Export Market Development Program: This program is similar to the marketing line item above, with an international application. In a time of fiscal crisis, should the state of Michigan subsidize dried fruit seminars in Taiwan? Promote dried blueberries in Japan? Should it market pickles in Korea, apples in Israel, and cherries in Germany? Past MDA grants have also been used to help “develop bakery recipes that utilize processed cranberry products.”[28] Indeed, should the state do these things at any time? The case that it should is an extremely weak one.
In February 2002, the MDA gave a $5,950 grant to the Michigan Food Processors Association so its members could attend a food show in Canada.[29] In March, a delegation from the Michigan Potato Industry Commission flew to tropical Costa Rica with the help of a $5,600 MDA grant.[30] The goal? To educate Costa Rican snack processors on the use of Michigan potatoes in their respective businesses.
A review of the commission’s spending indicates part of its grant was spent before and after the trip on meals at the Budweiser Brew House in Detroit and at a Bob Evans restaurant in Romulus. These are particularly troubling uses of grant funds. Even if subsidizing this travel were a legitimate function of the state, is it not fair to assume that commission members would have eaten something, and paid for it themselves?
These are just a few examples of how Michigan subsidizes the international marketing efforts of private business. For-profit businesses should be required pay for their own marketing efforts. It is a basic issue of fairness. Most business owners do not receive state help marketing their own businesses yet they are forced to pay taxes to support those who do. Savings: $100,000.
Food Bank Council: This appropriation provides a General Fund/General Purpose subsidy to the Food Bank Council of Michigan for handling items donated for charity. The Food Bank Council of Michigan is a private, nonprofit charity that is comprised of 10 smaller food banks in the Great Lakes State. Each bank provides food and funds to low-income people through 2,500 charities.[31] This is a seemingly kind, but unnecessary, state appropriation. Europe, America, and Michigan have a long and generous tradition of private charity. If the state took less money from taxpayers, private citizens would have more to give to private food banks and similar organizations, voluntarily.
Michigan’s “Harvest Gathering” program is a good example of how the private sector can contribute to citizens’ hunger problems. Harvest Gathering is a private, nonprofit foundation founded by then-MDA director Bill Schuette in 1990. Schuette and other state officials used their high-profile positions to help raise private funds and food for Michigan families. Last year alone, Harvest Gathering collected and redistributed 650,000 pounds of food at 100 locations across all 83 counties in Michigan. Savings: $487,400.
Southwest Michigan Tourist Council: This line item also markets Michigan agricultural products, but only in southwest Michigan. One marketing tool the council uses to get its message out is color brochures, featuring dates and locations for fairs and festivals in southwest Michigan. Another technique used by the council is to hand out Michigan agricultural products free of charge at the New Buffalo Welcome Center in New Buffalo. The state maintains a variety of lavatories for Michigan travelers and one is in New Buffalo. The Southwest Michigan Tourist Council uses money from this line item to buy products — such as strawberries and asparagus — and distribute them gratis on Saturdays to travelers who have stopped at the center. During the fall and winter the Council gives away Christmas tree corsages. Savings: $60,400.
Future Farmers of America: This line item subsidizes the Michigan chapter of the Future Farmers of America. Future Farmers of America is a private, nonprofit organization whose mission is to make a “positive difference in the lives of students by developing their potential for premier leadership, personal growth and career success through agricultural education.”[32] The state should no more appropriate funds for this organization than it should for future economists, accountants, or computer scientists of America. To subsidize one career choice over others, the state effectively gives its blessing to a single job category as if farming is more important than other work choices. Government should be neutral with respect to how free young men and women choose their occupations. In addition, career opportunities are of sufficient importance that young people have every incentive to find career information without government involvement. Savings: $60,000.
Program: Fairs and Expositions (Section 110)
Appropriation: |
All from Special Revenue Funds: |
$20,192,300 |
|
Total: |
$20,192,300[33] |
Program Description:
The Michigan state budget contains 20 separate line items under Section 110 (“Fairs and Expositions”) in the MDA budget, denoting exactly where this $20 million is spent. Expenditures in this area include money to state fair operations, prize money for fair contests, and “purses” for horse racing victories.
Recommended Action:
Section 110 should be eliminated from the state budget entirely. The following is a list and description of each line item.
Michigan State Fair: The official fair of the state of Michigan was the first of its kind in the nation. It was originally held in a different city each year, but since 1905, has been located at the corner of Eight Mile and Woodward in Detroit. Its 2003 appropriation is $5,110,200.[34] Most of the revenue for the state fair is generated by ticket sales, but that has not always been the case. From 1970 to 1995, for example, the fair lost an average of $2 million annually,[35] which the Legislature ultimately subsidized with additional appropriations. From 1995 to 2002, fair attendance and revenue improved, but not by much. In 2002, the fair eked out a $28,000 profit.[36] This is not a cause for celebration, however. Due to the collapse of a lease arrangement between the state, fair officials, and a private developer, the cost of maintaining the fairgrounds will increase by about $900,000 in 2003, excluding necessary capital improvement costs. The state should remove itself from fair operations entirely and sell the 200 acres of state land on which it operates.
What revenue might the sale of state fairgrounds generate? It is impossible to tell precisely without actually selling the land. Still, a general idea of possible sales prices can be formed by extrapolating data from the offers made on properties adjacent to the fairgrounds. In April 2000, developer Joseph Nederlander agreed to purchase 36 acres of government-owned land adjacent to the state fairgrounds in Detroit for $6.1 million. Before the deal was legally finalized, Nederlander sold it to another developer, Bernie Schrott, for $10.5 million. While both of these deals ultimately fell through, they still give an indication of what the 36 acres might sell for. What if the parcel for sale was 5.5 times larger, as is the fairgrounds? The potential for $57 million in one-time revenue makes the sale of the fair land and its buildings worth exploring. Savings: $5,110,200.
Upper Peninsula State Fair: The Upper Peninsula (U.P.) State Fair, located in Escanaba, was not created by the Legislature until 1927. Its 2003 appropriation is $1,214,400.[37] During the last fiscal year it required a General Fund/General Purpose subsidy of $177,900 in fiscal year 2001 to pay its bills.
The state of Michigan should remove itself from U.P. state fair activities entirely, and the 100 acres of state-owned land on which this fair operates should be sold. That’s because, as with other forms of private entertainment, state fairs should sink or swim on their own merit. If there is demand for these summer festivals, the people who value them the most will be willing to fund and operate them without state influence. Even if the state were to remove itself from fair involvement, it would hardly result in a dearth of fair fun. Seven Michigan counties and another 80 communities and associations run their own fairs, too.[38] Ottawa County alone has three different community fairs. Barry County’s Bill Ackerman has run a private, for-profit fair for 24 years. The “Prairieville Old Fashioned Farm Days Show Grounds” plays host to fair events every August. Animals are on display for show and racing; there are craft shows, dancing, live country music, cow-chip golf ball driving contests, and a “National Truck Pull” competition. It is situated on 140 acres of land owned by Ackerman. His fair is so popular it often fills the 3,000-space camping area set aside by Ackerman for overnight guests.
The sale of the U.P. land would generate dramatically less revenue than the state fairgrounds in Detroit, given the abundant supply of undeveloped land in and around Escanaba. According to Kevin Dubord, assistant assessor for the city of Escanaba, land adjacent to the fair sold two years ago to Gordon Foods Inc. for $2,000 per lineal foot of street frontage. That is, it cost $2,000 for every one of the 250 feet of land available along North Lincoln Road, on which the Gordon Foods property, and the fair, are located. At $2,000 per lineal foot, the UP fairgrounds might fetch $2,600,000.[39] Savings: $1,214,400.
Other Line Items under Fairs and Expositions: In early 2002, Gov. Engler used his veto pen to remove most of the following expenditures from the state budget because of a disagreement over the sizes and source of the appropriations. On Sept. 17, 2002, he asked the Legislature to reinstate the funding at the levels he originally requested. After some haggling, the funding was reinstated.
Fairs and Racing: This line item funds five full-time state employees to “oversee” other fairs, particularly with respect to how state “premiums” are used (see “Premiums — County and State Fairs,” below). It also provides assistance to county and community fairs. According to MDA Horse Racing Analyst Bob Woodman, state employees advise fairs on how to maintain records and help them “keep business.”[40] They also administer “Michigan Bred” programs that are funded for pari-mutuel breeding programs (see “Standardbred Sire Stakes” and “Standardbred Breeders’ Awards,” below, for more information).
The Michigan Bred program is sold as a way to improve Michigan horse racing by helping to subsidize Michigan “winners.” The truth is that it may actually harm Michigan’s racing industry by excluding superior racing bloodlines from outside Michigan borders. It is not illegal to breed a Michigan horse with one from Kentucky, but doing so may exclude the owners of champion horses from collecting larger purses. Savings: $612,500.
Building and Track Improvement - County and State Fairs: This is a line item to help improve the racing tracks or buildings and grounds at Michigan fairgrounds. Savings: $963,200.
Premiums — County and State Fairs: “Premiums” are generally used as award monies to children who win prizes for such things as raising the best livestock, having the best crafts, or winning the “antique tractor pull” contest, to name just a few examples. Savings: $1,614,000.
Purses and Supplements - Fairs and Licensed Tracks: According to Michigan Deputy Racing Commissioner James Bowes, this line item enlarges the potential winnings for horse owners who enter their animals in races around Michigan. This is designed to improve the number and quality of races by providing a greater incentive for horse owners to run their animals at Michigan racetracks. Savings: $2,969,000.
Standardbred Fedele Fauri Futurity: This line item reflects money that is appropriated to subsidize a particular race, known as the “Fedele Fauri Futurity,” at just one fair, the Kinross Fair in the Upper Peninsula, just outside of Sault Ste. Marie. Savings: $98,400.
Standardbred Michigan Futurity: This line item is also appropriated to subsidize a specific “harness” race, which was held at Mecosta County Fair in Big Rapids in 2002. Harness racing involves jockeys being pulled by horses on two-wheel carts. Savings: $98,400.
Quarterhorse Programs: A “Quarterhorse” is a specific breed that is raced in Michigan in “flat back” style (that is, without a harness and carriage to pull). The appropriation is used to subsidize the award for winners. Savings: $48,300.
Quarterhorse Programs Breeders’ Awards: Breeders’ awards are granted to Michigan owners of horses whose offspring go on to win a race in Michigan. Savings: $5,000.
Licensed Tracks - Light Horse Racing: This program supplements winning purses for the owners of horses that are four years old. It is essentially an age-specific category. Savings: $93,500.
Standardbred Breeders’ Awards: Breeders’ awards are granted to Michigan owners of horses whose offspring go on to win a race in Michigan. Savings: $1,503,200.
Standardbred Purses and Supplements - Licensed Tracks: The state adds supplements to winning purses to increase the incentive for Michigan standardbred owners to enter their horses and compete. This line item is similar to the purses and supplements for fairs and licensed tracks, listed above. Savings: $336,700.
Standardbred Sire Stakes: This appropriation subsidizes the purse of a race run annually and by a specific breed of horse that is also sired in Michigan. The finals have been held at Hazel Park Raceway the last two years. Savings: $1,259,400.
Thoroughbred Sire Stakes: This is a specific race at Great Lakes Downs in Muskegon run by a specific breed of horse that is also sired in Michigan. Savings: $1,259,400.
Standardbred Training and Stabling: This line subsidizes fairgrounds that provide stables and training tracks for standardbred horses. Savings: $53,200.
Thoroughbred Program: This is a fairly sweeping program that encompasses various purses and awards for owners of Michigan bred horses. Savings: $2,203,900.
Thoroughbred owners’ awards: This program supplements winning purses for horse owners whose thoroughbreds are Michigan bred and obtain a certain amount of points based on their year-long racing performance. Savings: $189,600.
Distribution of Outstanding Winning Tickets: Every year a percentage of winning tickets from horse bets goes uncollected. Money that would have been collected is now divided between the owners of racing tracks and the owners of the horses involved in each race. Rather than appearing under “Fairs and Expositions” in the MDA budget, this appropriation could accrue to, and be distributed by, the Michigan Gaming Office.[41] Transfer: $500,000.
Program: Office of racing commissioner
Appropriation: |
All from Special Revenue Funds: |
$3,747,700 |
|
Total: |
$3,747,700[42] |
Program Description:
The Office of Racing Commissioner (ORC) regulates and markets Michigan’s horse racing industry. Its duties include assigning race dates for tracks, hiring stewards and veterinarians, and investigating irregularities in racing.[43] It also coordinated the annual “Michigan Equestrian Princess Pageant.” The pageant helped winnow a list of competitors from whom a young woman was chosen as princess.[44] The 2002 Equestrian Princess is Laura Kendrick of Marysville. She and other competitors helped with the 2002 annual “Michigan Horse of the Year Ball” at the Kellogg Center in Lansing. The Commission spent about $10,000 from its promotional budget on the latter events.[45]
Recommended Action:
The office could be eliminated and several of its most vital functions transferred to other departments. Duties to be eliminated include any marketing-related activity, such as involvement with pageants. The office also issues racing schedules, appoints veterinarians, and grants approval of track officials; these functions also could be handled by the industry. (Organizing schedules, hiring doctors and trainers, and approving facilities for competition are all matters routinely handled by private sports groups, including the national leagues of hockey, football, basketball and baseball.)
If the state must be involved in the gaming business, then all other ORC matters, such as occupational licensure, tax and license revenue collection, and all matters involving fraud or any other irregularity, logically could be handled by the already existing Michigan Gaming Commission, not the MDA. Savings: $3,747,700.
Act No. 516, Public Acts of 2002, p. 2.
Michigan Department of Agriculture, “Roles, Mission, and Guiding Principles,” accessible on the Internet at https://www.michigan.gov/mda/0,1607,7-125-1572-7773--,00.html
Act No. 516, p. 2.
Ibid.
Ibid.
Ibid.
Tim Aben and Julie Stapelman, “Line Item and Boilerplate Summary,” p. 4. Lansing: House Fiscal Agency, January 2002.
Aaron Steelman and Joseph P. Overton, excerpted from “Advancing Civil Society: A State Budget to Strengthen Michigan Culture,” April 1996, p. 9.
Act No. 516, p. 3.
Act No. 144, Public Acts of 2002, p. 2.
Act No. 516, p. 3.
Ibid.
Michigan Department of Agriculture, “Migrant Labor Housing Program, FY 2001 Annual Report,” p. 1.
Accessible on the Internet at https://www.mackinac.org/3161.
Act No. 516, p. 3.
Telephone interview of Dan Wyant, director of Michigan Department of Agriculture, by Mackinac Center for Public Policy Director of Fiscal Policy, Michael LaFaive, Dec. 17, 2002.
Act No. 516, p. 3.
Aben and Stapelman, p. 16.
Steelman and Overton, p. 93.
Act No. 516, p. 4.
Aben and Stapelman, p. 18.
Ibid.
Ibid.
Michigan Department of Agriculture, Agriculture Development Division, “Inter-Office Purchases & Services Requisition,” Sept. 24, 2002.
Ibid.
Michael LaFaive, “Make Michigan One Big Renaissance Zone,” Michigan Privatization Report, summer 2002, p. 5. Accessible on the Internet at https://www.mackinac.org/4473.
Ibid.
Michigan Department of Agriculture, “Summary of 2002 Export Grants,” obtained through Freedom of Information Act in October 2002.
Ibid.
Letter to Paul Burke of the Michigan Department of Agriculture from the Michigan Potato Industry Commission, Sept. 20, 2002.
Food Bank Council of Michigan, “Who We Are,” accessible on the Internet at http://www.fbcmich.org.
Future Farmers of America, “FFA Mission and Strategies,” accessible on the Internet at http://www.ffa.org/about_ffa/index.html.
Act No. 516, p. 4. A $60,000 line item for fairs and festivals promotion was vetoed by Gov. Engler in July, 2002. The item was not subtracted from the total to ensure that the Gross Appropriation, above, would match the MDA budget, Act No. 516. Doing so would reduce the Mackinac Center’s projected savings by $60,000.
Ibid.
Gary Heinlein, “Fair’s low turnout puts it in jeopardy,” The Detroit News, Sept. 22, 2002. Accessible on the Internet at https://www.detroitnews.com/2002/metro/0209/22/c01-593735.htm.
“State Fair Succeeds Again,” The Detroit News, Oct. 21, 2002. Accessible on the Internet at https://www.detroitnews.com/2002/editorial/0210/21/a08-617449.htm.
Act No. 516, p. 4.
Telephone interview of Barb Hensinger, director of fairs, racing and expositions, Michigan Department of Agriculture by Mackinac Center for Public Policy Director of Fiscal Policy Michael LaFaive, Sept. 17, 2002.
Telephone interview of Kevin Dubord, assistant assessor, by Mackinac Center for Public Policy Director of Fiscal Policy Michael LaFaive, Sept. 30, 2002.
Author interview with Bill Woodman, horse-racing analyst, Fairs and Racing Division, Michigan Department of Agriculture, Sept. 23, 2002.
Ibid., Interview with Barb Hensinger.
Act No. 516, p. 5.
Aben and Stapelman p. 24.
Press release, Michigan Office of Racing Commissioner, “Racing Commissioner Announces Michigan Equestrian Princess Pageant,” June 7, 2002. Accessible on the Internet at https://www.michigan.gov/documents/MDA_PRINCESSrelease_6144_7.pdf
In a Jan. 17, 2003 interview with Office of Racing Commissioner Robert Geake, author Michael LaFaive was told that the Equestrian Princess Pageant had been eliminated. No documentation was provided.
Act No. 516, p. 4.
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grant |
$9,917,900 |
$9,917,900 |
$0 |
Federal Revenues |
$7,672,700 |
$7,672,700 |
$0 |
General Fund/General Purpose |
$33,767,600 |
$33,767,600 |
$0 |
Special Revenue Funds |
$10,399,400 |
$10,399,400 |
$0 |
Gross Appropriations |
$61,757,600 |
$61,757,600 |
$0 |
The Michigan Department of Attorney General is established under Article V, Executive Branch of the Constitution of the state of Michigan of 1963. The principal duties of the Attorney General include acting as legal counsel to all state departments, agencies, boards, commissions, officers and employees, and the state Legislature, and intervening in litigation when the public interest is involved.
The Michigan Department of Attorney General is a necessary and appropriate function of state government. We recommend no cuts in the Attorney General budget at this time.
[1] Act No. 528, Public Acts of 2002, p. 2.
Appropriations
Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental
Grants/Transfers |
$0 |
$0 |
$0 |
Federal
Funds |
$406,469,200 |
$0 |
$406,520,100 |
General
Fund/General Purpose |
$27,307,700 |
$0 |
$26,069,700 |
Special
Revenue Funds |
$26,069,700 |
$0 |
$27,256,800 |
Gross
Appropriation |
$459,846,600 |
$0 |
$459,846,600 |
The
Michigan Department of Career Development (MDCD) is the outgrowth of an
initiative by then-Gov. John Engler (Executive Order 1999-1) to split the former
Michigan Jobs Commission into two parts. One part became the MDCD, and the other
part became the Michigan Economic Development Corporation (MEDC). The MDCD
concentrates on delivering federally sponsored job training and placement
services, and MEDC is the state’s chief dispenser of corporate welfare and
“economic development” programs.
The mission of the MDCD, according to its 2001 annual report, is “to continuously improve the Career Development System [to] produce a workforce with the required skills to maintain and enhance Michigan’s economy.” Then-Gov. Engler preferred to see the department “focus solely on workforce issues;” however, his Director of department, Barbara Bolin, pressed for an expanded mission “to increase education and technical skills for career placement or advancement,” and … “to provide services, build partnerships and coordinate efforts” with the business community.[2]
The
MDCD is a coordinating bureaucracy that simply manages workforce programs.
The department is funded largely by the federal government, which
provides 88 percent of its operating money.
In 1998,
Congress passed the Workforce Investment Act of 1998 (WIA). Congress intended
this legislation to “integrate and streamline services,” as well as
encourage “informed consumer choice regarding career development, universal
access to government employment and training services, more systematic
accountability, performance-based management; strong local governance of
employment-related government services, active private sector participation, and
increased labor market responsiveness at state and local levels.”[3]
WIA
consolidated 17 separate federal programs to coordinate and control employment
and training through a mandatory, national system of local one-stop career
centers (in Michigan they are known as Michigan Works! Service Centers, or
“one-stops”) and regional and state workforce development boards (in
Michigan the board is known as the Michigan Works! Association), all reporting
to the U.S. Secretary of Labor.
Prior to WIA,
federal workforce programs such as job training and education fell under the
federal government’s Job Training Partnership Act of 1982 (JTPA).
Through the 1970s and early 1980s JTPA had become the largest
job-training program in the country. But
WIA dramatically expanded employment services coverage areas, and at the same
time began to displace private labor market activities previously served by the
private staffing services industry. In effect, WIA introduced a new personal
entitlement into the national workforce system: adult job placement for the
currently employed. No longer did
recipients have to be unemployed to received services.
However, the
state of Michigan is not required under the normal administration of American
federalism to implement the federal statutes, including the Workforce Investment
Act. This state power was reinforced by the U.S. Supreme Court’s New York
decision in 1994.[4]
The state of Michigan should refuse to accept federal funding for the programs
operated by the MDCD and shut down the MDCD and eliminate all the programs run
through it.
Last Fall,
in preparation for the Congressional reauthorization of the Federal Workforce
Investment Act former Director Bolin recommended an expansion of MDCD functions,
and requested an expansion of federal financing of the Michigan workforce
system.[5]
Instead of a
call for more federal funding, Gov. Granholm and her new appointee should use
this opportunity to call for an end to federal intervention in job training and
employment.
As demonstrated below, nearly every program provides services that duplicate, and often interfere with, private sector providers of identical or superior services. Programs that are not duplicative are capable of being provided by local community associations or businesses. Although labor markets, like government planners, are imperfect, they have been operating efficiently since long before governments began providing job searches and training for Michigan citizens, and will continue to do so in the absence of this department. (For more information on refusing federal funds, see Appendix I.)
Program: Departmental administration
|
Total: |
$506,800[6] |
Program
Description:
This appropriation funds the salaries and benefits of 6 “unclassified” employees, all of which are appointed by the governor. The department’s administration handles administrative, financial management, and policy planning for MDCD; it does not directly deliver any services.
Recommended
Action:
This
function could be eliminated with the rest of the department. Savings: $506,800.
Program: Department operations
Appropriation: |
Federal Funds: |
$5,371,900 |
|
Special Revenue Funds: |
$636,100 |
|
GF/GP: |
$2,387,400 |
|
Total: |
Program Description:
This appropriation funds support services for the department including budgeting, human resource needs, and grant management, and expenditures made for building occupancy.
Recommended Action:
This function should be eliminated with the rest of the department. Savings: $8,395,400.
Program: Employment placement and training services
Appropriation: |
Federal Funds: |
$58,111,900 |
|
Special Revenue Funds: |
$4,811,500 |
|
GF/GP: |
$7,913,100 |
|
Total: |
$70,836,500[9] |
Program Description:
This appropriation funds a large array of programs financed primarily by the federal Workforce Investment Act of 1998, the Wagner-Peyser Act of 1933, and the Carl D. Perkins Vocational and Technical Education Act, as well as by funding from the U.S. Departments of Education and Agriculture.
Workforce Investment Board. (WIB) After the federal Workforce Investment Act took effect in July 1999, the governor’s Workforce Commission assumed the role of advice, oversight, and research.[10] In March 2002, a state Workforce Investment Board replaced the commission; the WIB which more closely met the requirements of WIA.[11] The WIB oversees the statewide “career development system,”[12] which includes the programs described below. We recommend that the Workforce Investment Board be eliminated.
Michigan Works! Association. The Michigan Works Association offers policy guidance to the Michigan workforce development system. This body is a holdover from the federal Job Training Partnership Act, and attendant Private Industry Councils established at the local and regional levels.
The Michigan Works! Association has assumed the lead role in planning the workforce system over the years. It sets the direction for Michigan’s regional “Michigan Works! Agencies” (also known as “regional workforce development boards”). In effect, the Michigan Works! Association directs how the local workforce development officials should carry out implementation activities pursuant to the Workforce Investment Act.
Michigan Works! Agencies (MWAs). There are 25 MWAs in Michigan. These agencies are required under the terms of WIA (Title 1) if the state wishes to accept federal funding. MWAs plan services for the unemployed, as well as for employed adult workers, disabled workers, young people, and poor, divorced or widowed older female homemakers without children, often called “dislocated homemakers.” Some agencies serve several counties while others may just serve just one. These agencies do not provide local or regional services directly. The services are provided through Michigan’s 104 Michigan Works! Service Centers, or “one-stops.”
Michigan Works! Service Centers. There are 104 one-stops or Michigan Works Service Center across the state, all governed by MWAs. These one-stops provide the federal government’s workforce development services, and offer three basic services: 1) “core services” (e.g. job search and placement services for all adult worker applicants, as well as the unemployed “dislocated workers”); 2) “intensive services” (intensive counseling, case management for those who cannot get new jobs on the first round of core services), and 3) “training” (in-depth occupational training, skill and job upgrading for those unable to get jobs as a result of intensive services).
Michigan Works! Service Centers effectively duplicate services already provided by the private sector, either by the private staffing services industry or nonprofit organizations, and thus create unfair, subsidized competition against the private sector. Some Michigan Works! Agencies and their one-stops have engaged in very aggressive, anti-competitive behavior by giving away their services “for free;” that is, by providing recruiting and placement services to large corporations at no charge.[13]
All 25 Michigan Works! Agencies and their 104 Michigan Works! Service Centers should be eliminated. They operate in direct and unfair competition with Michigan’s private staffing services industry and serve no unique purpose.
Michigan Rehabilitation Services. This item is found within the Employment Training Services program. It provides administration funding for the Michigan Rehabilitation Services program, which is addressed below. It should be eliminated with the rest of the MDCD.
Michigan Community Service Commission (MCSC). This appropriation funds administration of the MCSC. The MCSC coordinates and markets volunteerism in Michigan. Ironically, nearly all the funding for a commission dedicated to voluntary association is funded by involuntary tax revenue. Ninety percent of the MCSC’s 2002 and 2003 funding of approximately $8.5 million is derived from federal and state taxation.[14] The commission was created in 1991 and has redistributed more than $40 million to organizations that work to “engage thousands of Michigan citizens in volunteer service.”[15] Government-directed, involuntarily funded “volunteerism” actually harms the charitable ethic of our state by making organizations dependent on government funding rather than true community support and voluntary involvement. It creates the false impression that civic institutions need government support and direction. Administrative support for this program should be eliminated with the MCSC itself.
Recommended Action:
As described above, the Employment Placement and Training Services appropriation
funds programs that either duplicate the services provided by, and in many cases
actually harm, private for-profit and nonprofit organizations. These programs
should be eliminated. Savings:
$70,836,500.
Appropriation: |
Federal Funds: |
$8,152,800 |
|
Special Revenue Funds: |
$1,693,600 |
|
GF/GP: |
$1,147,200 |
|
Total: |
$10,993,600[16] |
Program Description:
This appropriation funds the Michigan Career and Technical Institute (MCTI), whose mission, according to the MCTI web site, is “to provide technical training and support services to prepare Michigan residents with disabilities for employment in today’s competitive job market.”[17]
Recommended Action:
This program should be eliminated. Like many other programs it is well intentioned and addresses an important need. These services, however, are best provided and funded by local community organizations and businesses, not the federal or state government. Recycling community funds through expensive and bureaucratic state and federal programs, returning a portion back to the community with strings attached, crowds out the private, nonprofit and for-profit efforts. Many fine private organizations are working today to meet this need. Indeed, persons with disabilities are often sought by firms for their skills, and for the good public relations that can result from employing disabled citizens. The MCTI web site, “www.abletowork.org” even provides a link to a consortium of Fortune 1000 companies that are voluntarily facilitating their own hiring and training of the disabled. Savings: $10,993,600.
Program: Career and technical education
Appropriation: |
Federal Funds: |
$2,804,400 |
|
GF/GP: |
$689,900 |
|
Total: |
$3,494,300[18] |
Program Description:
This appropriation funds the staff that oversees vocational-technological education programs at high schools and other centers operating in concert with community college programs. It also administers federal grants as well as develops and implements new programs.
Program Recommendation:
Program: Postsecondary education
Appropriation: |
Federal Funds: |
$1,332,400 |
|
Special Revenue Funds: |
$478,900 |
|
GF/GP: |
$679,000 |
|
Total: |
$2,490,300[19] |
Program Description:
This appropriation funds state administrative oversight of five initiatives. They are 1) Community Colleges Services; 2) King-Chavez-Parks Initiative; 3) Proprietary Schools; 4) Veterans Education; and 5) Educational Corporations.
Program Recommendation:
Transfer these programs to higher education. The King-Chavez-Parks initiative will be addressed in greater detail in the higher education section of this study. Transfer: $2,490,300.
Program: Adult education
Appropriation: |
Federal Funds: |
$1,971,600 |
|
GF/GP: |
$208,400 |
|
Total: |
$2,180,000[20] |
Program Description:
This appropriation funds the administration of several state and federal adult education programs in Michigan.
Recommended Action:
This program should be eliminated along with state adult education programs. Please see “Adult Basic Education” in the following section, “Department Grants,” for the rationale. Savings: $2,180,000.
Program: Commission on Spanish Speaking Affairs
|
Total: |
$220,500[21] |
Program Description:
This appropriation funds the commission, which was created in 1975 to “assist Michigan’s Spanish-speaking citizens in areas such as education, employment, civil rights, health and housing.”[22]
Recommended Action:
This commission and its funding should be eliminated. Although there is no doubt that Spanish-speaking citizens benefit from such assistance, the same is true of virtually every other non-English-speaking ethnic group in Michigan. This type of assistance is best provided and funded by local community organizations and ethnic associations. Civil rights violations should be addressed by the Department of Civil Rights. Savings: $220,500.
Appropriation: |
Federal Funds: |
$279,012,700 |
|
Special Revenue Funds: |
$12,515,700 |
|
Total: |
$305,955,000[23] |
Program Description:
This appropriation funds grants to various charitable, educational, and welfare-to-work programs. The following is a list of those programs, a brief description, and the amount that could be saved by eliminating the program.
Adult Basic Education. This program is designed to teach basic math, literacy and English as a second language to Michigan adults. This line item is but one of several appropriations designed to help adults achieve rudimentary literacy skills. Like many other programs, adult education is well intentioned and needed.[24] This service, however, is best provided and funded by local community organizations and businesses, not state or federal government. State and federal mismanagement of K-12 education is a primary reason that so many adults require remedial education or skill enhancement; more state and federal intervention is a poor solution. High schools should guarantee their diplomas and provide remedial education free of charge to those who graduate without basic skills. There are also many for-profit and nonprofit organizations providing a vast array of basic and advanced training, and adults have sufficient incentives to seek them out when necessary. This line item is part of the Workforce Investment Act, described above, and should be eliminated. Savings: $13,500,000.
Council of Michigan Foundations. The Council of Michigan Foundations is a nonprofit organization located in Grand Haven. Its mission is to assist philanthropists, corporations, and non-profits in their charitable work. The Council has more than 400 members. This appropriation is funded solely through money derived from the lawsuit settlement between the U.S. government and the major tobacco companies, and is used for initiatives related to senior and youth health. The work of charities is best undertaken with voluntary charitable contributions, not government funding. These funds should be redirected to the General Fund/General Purpose budget to support core governmental functions. Savings: $3,000,000.
Focus: HOPE. Focus: HOPE is a well known, Detroit-area civil- and human- rights organization that is dedicated to improving humanity through multi-cultural charitable and education programs. It charges nominal fees for some of its work and uses its MDCD grant for job training. There is no reason to believe that this exemplary organization, and others like it, would not succeed without government subsidies. The majority of Focus: HOPE’s revenue comes from private sources, as does that of countless religious organizations that provide job training and education as part of their own social services network. This appropriation should be eliminated. Savings: $5,744,300.
Gear-up program grants. The Gear-up program was established in 1998 to help increase the number of low-income students who are ready to enter college each year. Children from three school districts will work in partnership with scholars at Central Michigan University to improve their pre-college knowledge. Special programs to prepare and motivate low-income students to pursue undergraduate degrees are well intentioned and needed, but should be funded and provided by private charitable organizations, businesses and individuals. Many such programs already exist, and should not be forced to compete with the government for funding. Savings: $3,000,000.
Job training programs sub-grantees. These grants support the work of Michigan’s 25 Michigan Works! Agencies, which are described above. The line item is part of the WIA program. Savings: $98,802,700.
Michigan Community Service Commission sub-grantees. Sub-grantees are organizations that receive government grants to help foster volunteerism in Michigan. The work of the MCSC, and the reason it should be eliminated, is described in “Workforce Development” (section III above), under the program “employment training services.” Savings: $6,757,300.
Personal assistance services. This appropriation funds personal assistance for people with disabilities at their place of work. As with other social service programs, the intention of this program is laudable. Such services, however, should be provided and funded by private charitable organizations, businesses, and individuals, preferably community-based programs, which best understand local needs. Savings: $462,000.
Pre-college programs in engineering and the sciences. This appropriation funds the Detroit and Grand Rapids area Pre-College Engineering programs, which are designed to prepare and motivate students to pursue degrees in engineering or the sciences. Assistance, however, should be provided by private, charitable organizations, businesses, and individuals, preferably community-based programs which best understand local needs. Kettering University runs such programs and does so without state aid. Savings: $940,200.
Supported employment grants. The appropriation funds employment grants designed to help individuals with disabilities obtain work with the help of job “coaches” in their respective communities. As with other social services described in this and other chapters, these services need not be provided by government. Savings: $1,441,300.
Technology assistance grants. This appropriation funds the state program “Tech 2000,” which helps local communities obtain high-technology equipment for job training. If it is necessary, this service should be provided and funded by private charitable organizations, businesses, and individuals, preferably community-based programs, which best understand local needs. Many organizations and businesses, both for-profit and nonprofit, already provide a panoply of job training programs. Savings: $1,378,700.
Carl D. Perkins Grants. These federal grants help fund new curriculum development, professional development for teachers, and help create relationships between vocational-technology programs and educators throughout Michigan high schools and community colleges. This program attempts to assist students in obtaining vocational-education training. Federal intervention has eroded the historic and effective role of labor unions and companies in vocational training, The state of Michigan could call upon the federal government to end its involvement in these programs and eliminate this appropriation. (For information on refusing federal funds, see Appendix I.) Institutions of civil society have been providing vocational training without government aid for years. For example, the Ford Corporation and the U.A.W. run a joint apprenticeship program in New Boston that has helped 30,000 hourly employees earn credentials as tradesman since 1941. Programs such as this have been very effective, and cost-free to taxpayers. Savings: $42,500,000.
Vocational rehabilitation client services/facilities. This appropriation funds rehabilitation and independent living services for workers with disabilities. As discussed elsewhere in this report, job training or retraining is fundamentally the responsibility of employers, employees, and private organizations — not the state or federal governments. Savings: $51,339,200.
Vocational rehabilitation independent living. This appropriation funds 10 Centers for Independent Living in Michigan. These centers work to provide services and resources for people with disabilities. As with the two line items directly above, there is no question that disabled individuals require assistance in learning certain skills. Such assistance should be provided and funded by private charitable organizations, businesses, and individuals — preferably community-based programs, which best understand local needs. State support for these sites should be eliminated. Savings: $3,190,700.
Welfare-to-work programs. Funding for this appropriation stems from the federal government’s Personal Responsibility Act of 1996. The program, which is administered by the state’s Michigan Works! Association, is designed to increase the ability of welfare recipients to become employed with the help of non-cash assistance, such as transportation, clothing, and medical examinations. While this system represents an improvement over the welfare system that preceded it, it still drains communities of resources, filters them through expensive state and federal bureaucracies, and returns a portion — with strings attached — to local communities. As a first step toward making sizeable reductions in Michigan’s own public assistance and service programs through the Family Independence Agency, the state should refuse federal funding for this program. (For information on refusing federal funds, see Appendix I.) The federal government maintains the prerogative of running the system itself directly in Michigan if it chooses. There is no compelling reason to pass this money through the state. Savings: $72,898,600.
Michigan Virtual University. This program began in 1998 as a private, nonprofit institution designed to deliver online education services in Michigan. While it is technically a private institution, it was created by former Gov. Engler, and by the quasi-public Michigan Economic Development Corporation, with state resources. The state of Michigan already funds educational opportunities through K-12 schooling, community colleges and universities. Adding this marginal program is both unnecessary and unfair. Private, for-profit providers of online education services, such as the University of Phoenix, do not receive state appropriations, yet they are forced to compete with those who do. In addition, private schools such as Michigan’s Baker College — as well as many public universities — maintain an online presence as well, and business is booming. Baker currently has 2,800 students taking one or more of 278 undergraduate and post-graduate courses online. The private sector should provide all of these services free of state intrusions. Savings: $1,000,000.
Recommended Action: All of the programs listed above should be eliminated for the reasons provided. Savings: $305,955,000.
Appropriation: |
Federal Funds: |
$43,269,700 |
|
Special Revenue Funds: |
$5,933,900 |
|
Total: |
$49,203,600[25] |
Program Description:
This appropriation funds the employment service agency. This agency maintains four program line items: Workers’ compensation; building occupancy charges; employment service positions; and labor market information. Workers’ compensation simply pays the premiums for insurance of the employees working in this department. The building occupancy charges represent payment for lease obligations. The employment services positions line item funds administrative staff and program support for Michigan’s Michigan Works! Service Centers (described above, in section III, “Workforce Development”). The labor market information section funds staff that produce reports on statewide labor information.
Recommended Action:
All of these items should be eliminated with the rest of the department. There is no need for Workers’ compensation and employment service positions for a department that no longer exists. Labor market information maintained by the state is not a necessary function of state government and most of the data provided by this service is readily available on other free web sites maintained by the federal government. Savings: $49,203,600.
Appropriation: |
All from Federal Funds: |
$6,492,700 |
|
Total: |
$6,492,700[26] |
Program Description:
This appropriation funds the information technology services program for the department. This line item represents the transfer of revenues from the Michigan Department of Career Development to Michigan’s Department of Information Technology as payment for technology services used by the MDCD.
Recommended Action:
This appropriation should be eliminated with the rest of the department. Savings: $6,492,700.
Act No. 517, Public Acts of 2002, p. 2.
Michigan Department of Career Development, “Annual Report,” 2001.
Cynthia M. Fagnoni, “Workforce Investment Act: Implementation Status and Integration of TANF Services,” testimony to the Subcommittee on Postsecondary Education, Training and Life-Long Learning of the U. S. House of Representatives Committee on Education and Workforce, and the Subcommittee on Human Resources of the House Committee on Ways and Means, GAO/T-HEHS-00-145, June. 29, 2000, p. 1; Daniel O’Shea and Christopher T. King, “The Workforce Investment Act: Restructuring Workforce Development Initiatives in States and Localities,” Report # 12, Albany: Nelson A. Rockefeller Institute of Government, State University of New York, April 2001.
New York v. United States, 505 U.S. 144 at 174 and 178.
Michigan Department of Career Development, “State of Michigan Strategic Five-Year Workforce Investment Act Plan,” www.michigan.gov/mdcd/0,1607,7-122--8809--,00.html Oct. 31, 2002.
Act No. 517, p. 2.
Ibid.
Michigan Department of Career Development, “State of Michigan Strategic Five-Year Workforce Investment Act Plan,” www.michigan.gov/mdcd/0,1607,7-122--8809--,00.html Oct. 31, 2002.
Act No. 517, p. 2.
Established in 1993 by Executive Order 1993-3 See www.michigan.gov/eMI/Portal/CDC/Components/eMI_CDA
Created by Executive Order 2002-05 by Gov. John Engler on Mar. 27, 2002.
Michigan Department of Career Development web page, “Michigan’s Workforce Investment Board,” accessible on the Internet at https://www.michigan.gov/mdcd/0,1607,7-122-1683_18969---,00.html.
Kimble F. Ainslie, “Staffing Service Industry Under Fire,” Current Commentary, Mackinac Center for Public Policy, Sept. 18, 2002; www.mackinac.org/4665.
Interview between Michael LaFaive and Kyle Caldwell of the Michigan Community Service Commission, Dec. 19, 2002.
Michigan Community Service Commission web site, “MCSC Mission and Vision,” accessible on the Internet at https://www.michigan.gov/mcsc/0,1607,7-137-6113-20613--,00.html.
Act No. 517, Public Acts of 2002, p. 2.
Michigan Career Technical Institute web site, “Welcome to the Michigan Career and Technical Institute,” accessible on the Internet at https://www.michigan.gov/mdcd/0,1607,7-122-1681_2913---,00.html.
Act No. 517, Public Acts of 2002, p. 3.
Ibid.
Ibid.
Ibid.
Bob Schneider and Barb Endres, “Line Item and Boilerplate Summary,” Career Development and Michigan Strategic Fund, fiscal year 2001-2002, Jan. 2002, p. 8.
Each appropriation figure in this grant section can be found in Act No. 517, p. 3. This single endnote is used to avoid a string of Ibids created by referencing each grant entry. In addition, there exists a discrepancy between the appropriated amount listed in Act No. 517, and a newer source (Line Item and Boilerplate Summary) from the House Fiscal Agency. The Mackinac Center for Public Policy used the figure from the Line Item and Boilerplate Summary, Career Development and Strategic Fund document in this chapter.
For more information on remedial education, see Jay P. Greene, Ph.D, “The Cost of Remedial Education, How Much Michigan Pays When Students Fail to Learn Basic Skills,” Sept. 2000.
Act No. 517, Public Acts of 2002, p. 4.
Ibid.
Appropriations
Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental
Grants/Transfers |
$0 |
$0 |
$0 |
Federal Funds |
$934,000 |
$934,000 |
$0 |
General Fund/General
Purpose |
$13,433,700 |
$13,433,700 |
$0 |
Special Revenue Funds |
$0 |
$0 |
$0 |
Gross Appropriation |
$14,367,700 |
$14,367,700 |
$0 |
The
Michigan Constitution establishes the Michigan Civil Rights Commission, and the
Department of Civil Rights was established to carry out the Commission’s
responsibilities. According to its
official web site, “The Michigan Civil Rights Commission was created by
the Michigan Constitution of 1963 to carry out the guarantees against
discrimination articulated in Article I, Section 2. As further stated in Article
V, Section 29, the state constitution directs the Commission to investigate
alleged discrimination against any person because of religion, race, color or
national origin and to ‘secure the equal protection of such civil rights
without such discrimination.’ Public Acts 453 and 220 of 1976 and subsequent
amendments have added sex, age, marital status, height, weight, arrest record,
and physical and mental disabilities . . .”[2]
Although
the department has embarked on activities outside its narrow charter, this
report does not include a detailed analysis of these operations, and therefore
no program changes are recommended at this time.
[1] Act No. 528, Public Acts of 2002, p. 3.
[2] Michigan Department of Civil Rights official web site, “The Michigan Civil Rights Commission and Michigan Department of Civil Rights,”accessible on the Internet at https://www.michigan.gov/mdcr/0,1607,7-138-4951-9283--,00.html .
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$5,300,000 |
$3,300,000 |
$2,000,000 |
Federal
Funds |
$4,779,100 |
$4,779,100 |
$0 |
General
Fund/General Purpose |
$10,016,900 |
$10,016,900 |
$0 |
Special
Revenue Funds |
$11,489,200 |
$9,971,175 |
$1,518,025 |
Gross Appropriation |
$31,585,200 |
$28,067,175 |
$3,518,025 |
The Michigan Department of Civil Service (DCS) implements rules and policies determined by the Civil Service Commission (CSC), which, according to the state constitution, shall “classify all positions in the classified service according to their respective duties and responsibilities, fix rates of compensation for all classes of positions, approve or disapprove disbursements for all personal services, determine by competitive examination and performance exclusively on the basis of merit, efficiency, and fitness the qualifications of all candidates for positions in the classified service.” The constitution requires the legislature to appropriate up to 1 percent of the state’s payroll and benefits budget, if the Commission requests it.
Program: Human resource training and development
Appropriation: |
Interdepartmental
Grants: |
$2,000,000 |
|
Special
Revenue Funds: |
$1,518,025[2] |
|
Total: |
$3,518,025[3] |
Program
Description:
This
appropriation funds human resource training and development programs.
According to the Civil Service Commission’s website: “The State of
Michigan Department of Civil Service Division for Human Resource Training and
Development (HRTD) provides training and development services to classified
state employees. HRTD staff serve as consultants and project managers who are
available to assist agencies with staff training and development.”
Although individuals may sign up for classes on their own, in most cases
the employing department will pay for the classes.
Recommended
Action:
The
Legislature could eliminate centralized training and development classes for
state personnel. Many of the
courses offered, such as, “Seven Habits of Highly Effective People,”
“Writing Advantage,” or “Boosting Your Creativity and Imagination,”[4] can
and should be taken in the private sector by any employees wishing to upgrade
their own personal and professional skills, and at their own expense.
There are also thousands of inexpensive books that teach the same lessons
found in these civil service courses for those people interested in such
lessons. Even if every class were specifically related to job
training, this need not be state funded. Employees
have their own incentives — pride of work, opportunities for advancement, for
instance — to constantly upgrade their job skills and do so at their own
expense. Savings: $3,518,025.
Act No. 528, Public Acts of 2002, p. 4.
This figure is an estimate based on database research provided by Jessica Runnels of the Michigan Senate Fiscal Agency to the Mackinac Center for Public Policy, Nov. 1, 2002.
Ibid.
Michigan Department of Civil Service web site, “Training Calendar,” accessible on the Internet at http://www.state.mi.us/mdcs/asp/hrtdtrain/printcoursecatalog.asp.
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$69,172,900 |
$69,012,485 |
$160,415 |
Federal Funds |
$5,177,291,200 |
$5,000,201,114 |
$177,090,086 |
General Fund/General Purpose |
$2,477,706,900 |
$2,063,868,224 |
$413,838,676 |
Special Revenue Funds |
$2,075,011,300 |
$2,051,139,578 |
$23,871,722 |
Gross Appropriation |
$9,799,182,300 |
$9,184,221,401 |
$614,960,899 |
Created in 1996 by an executive order that consolidated the Departments of Mental Health and Public Health with Medicaid and the Office of Drug Control Policy, the Michigan Department of Community Health (MDCH) also incorporates the Office of Services to the Aging. It has absorbed the Adult Home Health Help Program and the Social Services to the Physically Disabled Program from the Family Independence Agency, as well as the Crime Victims Services Commission.
The Michigan Department of Community Health oversees state’s healthcare policies and manages its publicly funded health systems. The department’s stated mission is quite broad: it “strives for a healthier Michigan.”[2] In pursuit of that goal, the department has three objectives: “Promote access to the broadest possible range of quality services and supports; take steps to prevent disease, promote wellness and improve quality of life [and] strive for the delivery of those services and supports in a fiscally prudent manner.”[3]
The number and scope of government services that could be justified under the rubric of promoting wellness and improving the quality of life is limitless. It is no surprise, then, that MDCH is one of the state’s largest departments. Each year, an estimated 1.5 million Michigan residents receive services that are provided with total or partial support from MDCH. Its gross appropriations for fiscal year 2003 exceed $9 billion, and it employs approximately 5,465 people, in addition to supporting additional employees in county governments.
The department provides services to Michigan citizens from before birth to death. It is time for the state to rethink this department’s mission and limit state government control and funding of healthcare services.
Program: Director and other unclassified departmental administration
Appropriation: |
Federal Funds: |
$6,303,500 |
|
Special Revenue Funds: |
$1,579,800 |
|
GF/GP: |
$19,667,400 |
|
Total: |
$27,550,700[4] |
Program Description:
The appropriation funds administrative work by the Family Independence Agency.
Recommended Action:
With the elimination of approximately 6.3 percent of the Department of Community Health comes the ability to downsize the management of this department commensurately, producing a substantial savings of approximately $1,735,694. This is an estimate only, and a detailed analysis of the impact of programs reductions is needed to determine exact savings. Savings: $1,735,694.
Program: Certificate of need
Appropriation: |
Interdepartmental Grants: |
$101,600 |
|
Special Revenue Funds: |
$620,300 |
|
GF/GP: |
$222,900 |
|
Total: |
$944,800[5] |
Program Description:
This appropriation funds the Certificate of Need (CON) program. This program is industrial policy for healthcare. Under the CON program, the state decides who may build new buildings, buy specified new pieces of equipment, or offer new and expanded medical services. For example, every healthcare facility (such as a hospital, nursing home, or outpatient surgical clinic) that wishes to increase its number of beds, buy another facility, or expand its building must get a CON certificate from the state. Under the CON program, every facility that wishes to establish a neonatal intensive care unit, purchase a magnetic resonance imaging (MRI) machine, or create an air ambulance service must petition the state and obtain permission, in writing, before proceeding.[6]
Recommended Action:
This program should be eliminated. The original idea behind CON is that it would prevent wasteful spending, but the result is that it negatively affects healthcare. It hinders hospitals’ ability to operate more efficiently by using economies of scale, something common in other businesses. It also effectively sets a price limit on medical services.[7] Furthermore, there is some evidence that CON regulations increase mortality among the elderly by limiting hospitals’ abilities to use new equipment.[8] The certificate of need program requires 13 administrative positions, and costs the state $944,800. Savings: $944,800.
Program: Rural health services
Appropriation: |
Federal Funds: |
$600,000 |
|
GF/GP: |
$126,000 |
|
Total: |
$726,000[9] |
Program Description:
This appropriation subsidizes the Michigan Center for Rural Health. The center, based at Michigan State University, aims “To coordinate, plan, and advocate for improved health for Michigan’s rural residents and communities through creative visionary education, service, and research …”[10]
Recommended Action:
This program should be eliminated. Rural residents may indeed have fewer choices in buying goods or services compared to their urban or suburban counterparts. For example, cable television service is not available in many rural areas, and world-class research hospitals typically are not located in counties whose population is under 10,000. On the other hand, rural residents may enjoy amenities not available to people who live in more densely populated areas, such as less congestion and easy access to outdoor recreation. Tradeoffs are inevitable in the choice of where to live, and the state could minimize the extent to which it shields individuals from the consequences of their own choices. Savings: $726,000.
Program: Michigan essential healthcare provider program
Appropriation: |
Federal Funds: |
$725,000 |
|
Special Revenue Funds: |
$150,000 |
|
GF/GP: |
$574,100 |
|
Total: |
$1,449,100[11] |
Program Description:
This appropriation funds the Michigan essential healthcare provider program. The program offers up to $25,000 per year to physicians and dentists who provide medical services to areas designated as “underserved” by the medical community for the repayment of school loans. In fiscal year 2001, the program placed 36 medical providers and 5 dentists.[12]
Recommended Action:
This appropriation should be eliminated. It is true that healthcare options — as well as many other services — are more limited in rural areas than suburban and urban areas, but this in no reason to subsidize access to health care in rural areas. The true cost of and access to healthcare services should be part of a person’s or business’ location decision. If shortages do exist, private groups such as medical associations and community organizations should address them independently of government. These grants perpetuate the image of rural communities as dependent on the largesse of urban and suburban residents. Doctors and dentists are important, certainly, but so are lawyers, plumbers, and hairdressers. We do not have state programs to attract other professions to rural areas, and we do not need such a program for doctors or dentists. [13] Savings: $1,449,100.
Program: Consumer involvement program
Appropriation: |
All from GF/GP: |
$189,100 |
|
Total: |
$189,100[14] |
Program Description:
This appropriation funds the Consumer Involvement program. This program is designed to help consumers participate in policy forums and self-help groups. It also funds a consumer “hotline.”
Recommended Action:
Eliminate this program. Consumers are capable of such participation without a state program. Consumers have been buying and selling goods in the marketplace and solving consumer-related problems since long before this state program. If this service is needed it should be provided through a voluntary association. Savings: $189,100.
Program: Gambling addiction
Appropriation: |
All from Special Revenue Funds: |
$3,500,000 |
|
Total: |
$3,500,000[15] |
Program Description:
This appropriation subsidizes education and research into pathological gambling, as well as for treatment and for the operation of a 24-hour “help line.” The services are funded with revenue from the Michigan State Lottery, Department of Agriculture (horse racing) and by the three Detroit casinos.
Recommended Action:
The state could cease this operation entirely. Few policy issues better illustrate contradictory functions of state government than gambling. On the one hand, nearly all forms of gambling have historically been illegal, and most still are. Yet for the last 30 years the state has owned and run its own gambling operation, the state lottery, and it sanctions and profits from a growing number of casinos around the state. Now, the state both encourages gambling through the Michigan State Lottery, and also discourages it through this program. Those with gambling problems do need help, but such assistance should be provided by local community organizations. Savings: $3,500,000.
Program: Mental health initiatives for older persons
Appropriation: |
All from GF/GP: |
$1,165,800 |
|
Total: |
$1,165,800[16] |
Program Description:
This appropriation funds respite care (substitute caregivers who give regular caregivers a “respite”) and daycare services; it also provides training in Alzheimer’s Disease and related health issues to home healthcare providers. In fiscal year 2003, $385,000 went to training, data analysis, research and technical assistance (33 percent of the total allocation) while $780,600 (67 percent) went to respite and daycare services.[17]
Recommended Action:
This program could be eliminated. Where needed, these services should be provided and funded by local community organizations. Institutions of civil society can, should be, and are providing these services. For example, the Lansing Area Parents Respite Center has compiled a guide listing numerous private and public providers of such services, and they are not the only group to do so. Savings: $1,165,800.
Program: Highway safety projects
Appropriation: |
All from Federal Funds: |
$1,837,200 |
|
Total: |
$1,837,200[18] |
Program Description:
This appropriation funds state police and highway department efforts that develop and distribute pamphlets, brochures, videos, and public service announcements promoting highway safety and substance abuse prevention.
Recommended Action:
This program should be eliminated. The state already mandates a level of safe driving skills to obtain a license to operate automobiles. In addition, individuals already have an incentive to drive safely — their own health and welfare and that of their respective families.
Further, theories of risk perception suggest that people act based on their subjective perception of the risks of a given action rather than objectively stated odds. Thus, official efforts to reduce risk in one area, such as requiring seat belt usage or reducing the speed limit are usually overwhelmed by personal choices that increase risk in other areas, such as paying less attention in city traffic. An official campaign to reduce fatalities through mandatory seatbelt laws in Britain resulted in fewer automobile deaths, but was shown to have increased pedestrian deaths. [19]
The mileage death rate, which calculates deaths per 100 million vehicle miles, was 1.7 in 1991, decreased to 1.5 in 1992, rose to 1.8 by 1995, and then trended down so that for 1989, 1999, and 2000 — the last year for which data are available — the number declined to 1.5. Total vehicle miles traveled grew from 81.9 billion miles in 1991 to 94.9 billion miles in 2000. [20]
Of course, families and friends have powerful emotional and social incentives to reinforce good driving habits among their associates, and insurance companies have strong financial incentives to promote safe driving habits among the insured. These civil society incentives should suffice. Savings: $1,837,200.
Program: Community mental health non-Medicaid services
Appropriation: |
Special Revenue Funds: |
$1,582,400 |
|
GF/GP: |
$275,347,800 |
|
Total: |
$276,930,200[21] |
Program Description:
This appropriation funds Department of Community Health expenditures that are not covered by Medicaid, but mimic the services provided by the Medicaid program on mental health issues for people whose income and assets make them ineligible for Medicaid.
The term “Medicaid” is used generally to describe 56 entitlement programs jointly administered by federal and state governments (states must participate in at least 14 of them to get federal matching funds). The programs are designed to help the poor by providing them with short- and long-term healthcare services. The original Medicaid program was passed in 1965 as part of Lyndon Johnson’s “Great Society” initiative, in which he declared “unconditional war on poverty.” Michigan spends $2 billion from its GF/GP account annually covering the costs of the program, and costs are expected to increase dramatically.
The services clients may receive under this program include, but are not limited to, help with substance abuse problems, general counseling, outpatient services, “inpatient care in a structured, secure environment,”[22] psychiatric evaluations, hospital care, Intelligence Quotient and other “projective” psychological testing, health services (minor first-aid treatment, in-home nursing visits, and dietary services); “occupational therapy” (for problems that involve work performance); and “specialty services” such as music, recreational, art, and massage therapies.[23]
Program Recommendation:
This program should be eliminated. The federal government has established guidelines for the provision of Medicaid services based on a variety of factors, including assets and income. It is laudable to assist people who fall outside of the established government categories, but where do expansions of the state end, and personal and civic responsibility begin? If government refrained from crowding out private solutions to social ills with high taxes and regulation, private individuals and institutions could do more to address the needs of Michigan citizens. Savings: $276,930,200.
Program: Multicultural services
Appropriation: |
All from GF/GP: |
$3,163,800 |
|
Total: |
$3,163,800[24] |
Program Description:
This appropriation funds Community Mental Health Service Programs (CMHSP) for contracts for mental-health services to specified ethnic groups.
Recommended Action:
The funding for this program could be eliminated. Mental health services should not be either withheld or dispensed on the basis of ethnicity. Savings: $3,163,800.
Program: Medicaid substance abuse services
Appropriation: |
Federal Funds: |
$14,479,800 |
|
GF/GP: |
$11,647,700 |
|
Total: |
$26,127,500[25] |
Program Description:
This appropriation funds Medicaid substance abuse services. These services are managed by CMHSPs. Spending on substance abuse treatment is increasing, and more of the funding burden is being shouldered by taxpayers. Payments for substance abuse treatment increased 5.4 percent per year from 1987-1997, even as inpatient treatment was increasingly replaced by less costly outpatient treatment. While this is a slower rate than the growth in overall national health expenditures (8.2 percent per year), there is cause for concern. In 1997, $11.9 billion was spent nationally on treating substance abuse. In that year, 62 percent of all substance abuse treatment funding came from the public sector, while only 55 percent of all mental health spending came from government. Taxpayers were increasingly called upon to fund substance abuse treatment; 61.8 of substance abuse treatment was funded through public sources in 1997, compared with only 50.3 percent to years earlier. By contrast, private insurance-funded spending grew only 1.9 percent a year.[26] This discrepancy suggests a shift to public sources and/or a relative lack of cost control in public-sector programs.
Recommended Action:
All state substance abuse programs could be eliminated in favor of private assistance. Substance abuse is a serious problem that leads to a loss in productivity, the breakdown of families, and a number of other adverse consequences. However, this program is an other example of a system that takes resources from families and communities through taxation, funnels it through expensive state and federal bureaucracies, and returns a portion of the amount taken to certain selected individuals and organizations. These resources should be left with individual families and local communities who are close to the problems, and who can provide assistance that is more accountable and effective than that from distant bureaucracies in Lansing and Washington. Savings: $26,127,500.
Program: Respite services
Appropriation: |
Special Revenue Funds: |
$3,000,000 |
|
GF/GP: |
$318,600 |
|
Total: |
$3,318,600[27] |
Program Description:
This appropriation funds respite care for families who have children with emotional disturbances.
Recommended Action:
The state should remove itself from respite-care services. As with other forms of respite care, one should commend the hard work of family members who attend to their ill relatives. But every dollar that government takes from needy families, businesses, and individuals is a dollar that they cannot use to solve their own respite problems, or those of their neighbors. Savings: $3,318,600.
Program: State disability assistance program substance abuse services
Appropriation: |
All from GF/GP: |
$5,453,600 |
|
Total: |
Program Description:
This appropriation funds per-diem room and board payments for financially needy adults or emancipated minors who reside in substance abuse residential facilities.
This line item could be eliminated for the same reasons addressed by “Medicaid Substance Abuse Services” program, above. Savings: $5,453,600.
Program: Community substance abuse prevention, education, and treatment programs
Appropriation: |
Federal Funds: |
$57,744,900 |
|
Special Revenue Funds: |
$1,460,000 |
|
GF/GP: |
$17,130,500 |
|
Total: |
$76,335,400[29] |
Program description:
This appropriation funds programs that distribute grants for substance abuse prevention, education, and treatment to 18 agencies and treatment centers. The treatment centers are outpatient and residential; there is no hospitalization.
Recommended Action:
Eliminate this line item for the same reasons addressed under the “Medicaid Substance Abuse Services” program. Savings: $76,335,400.
Program: Minority health grants and contracts
Appropriation: |
Federal Funds: |
$650,000 |
|
GF/GP: |
$339,100 |
|
Total: |
$989,100[30] |
Program Description:
This appropriation funds contracts and grants, some awarded on a non-competitive basis, to serve the health needs of minority groups and help “reduce the gap between minority and non-minority health, and improve minority access to existing health services.”[31]
Recommended Action:
The state should eliminate funding for this program. The state, to the extent that it has a health program, should serve the needs of the population as a whole. Special outreach activities to minority groups could be conducted by private organizations that advance the interests and serve the needs of those groups. To a large extent, the perceived gap between the healthcare status of various population groups may reflect a less advantageous economic position. The best way to overcome economic disadvantages is through reforms in education, tax policy, and regulation. Savings: $989,100.
Program: Laboratory services
Appropriation: |
Interdepartmental Grants: |
$392,100 |
|
Federal Funds: |
$3,411,100 |
|
Special Revenue Funds: |
$3,131,300 |
|
GF/GP: |
$6,392,200 |
|
Total: |
$13,326,700[32] |
Program Description:
This appropriation funds laboratory services for the department. The Bureau of Laboratories includes a Division of Chemistry of Toxicology and a Division of Infectious Diseases, as well as a Quality Assurance Section. It supports regional laboratories in Houghton, Kalamazoo, Grand Rapids and Saginaw. Funding for the bureau covers staff and contracts, supplies and travel for lab testing and identification of infectious disease agents. This program collects epidemiological data and tests blood samples children screened for lead. It also funds a bio-terrorism response team and studies Lyme disease.
Recommended Action:
The state should outsource its laboratory functions if economically feasible. Many private, for-profit laboratories exist and routinely perform laboratory analysis for all levels of government. Nicole Haskins, project scientist at LabSeek, Inc., a for-profit corporation that describes itself as “a convenient one-stop source for laboratory outsourcing,” reports that average savings in the range of 10 percent to 20 percent for outsourced state laboratory services are the norm. For purpose of calculating the potential savings from contracting laboratory services, we will use 15 percent. Savings: $1,999,005.
Program: Local public health operations
Appropriation: |
All from GF/GP: |
$41,070,200 |
|
Total: |
$41,070,200[33] |
Program Description:
This appropriation funds operations that provide matching funds to local health departments for spending on any of nine services: immunizations, infectious disease control, STD control, hearing screening, private groundwater supply, and on-site sewage management.
Program Recommendation:
The state could change the public health code to remove any mandates for health services (such as those listed above) and eliminate matching grants that fund these activities at the local level. Local units of government have their own reasons to provide such services and pay for them directly. State intrusion, however well intended, attempts to provide universal solutions that cannot take into account all of the unique circumstances of respective counties, villages, and townships (CVTs). Rather than pay for half of all local hearing or sexually transmitted disease tests from state funds, for instance, the program could be eliminated and CVTs could determine their own public health destinies. The debate to raise taxes at the local level for such programs could personalize the issue, and lead citizens to better grasp the marginal costs and benefits of health programs, and how those programs directly affect their communities. Savings: $41,070,200.
Appropriations in this segment of the budget “promote healthy lifestyles.”[34] The fact that “healthy lifestyles” is a good thing does not answer the question, “Is this a legitimate function of limited government?” Residents of Michigan, and the United States as a whole, do not suffer from lack of opportunity to learn about health issues. From Consumer Reports magazine to books to television shows, there are many ways that people can learn about healthy living. There is little need for expansive educational campaigns by governments.
Program: African-American male health initiative
Appropriation: |
All from GF/GP: |
$320,000 |
|
Total: |
$320,000[35] |
Program Description:
This appropriation funds the African-American Male Health Initiative, a program that provides community-based prevention and disease detection to African-American men, providing services such as screening for hypertension and diabetes.[36]
Recommended Action:
This program should be eliminated. The state, to the extent that it has a health program, should serve the needs of the population as a whole. Special outreach activities to minority groups could be conducted by private organizations that advance the interests and serve the needs of those groups. Health services should not be either withheld or dispensed on the basis of race. Savings: $320,000.
Program: Alzheimer’s information network
Appropriation: |
Federal Funds: |
$150,000 |
|
Special Revenue Funds: |
$290,000 |
|
Total: |
$440,000[37] |
Program description:
This appropriation funds the Alzheimer’s information network, a program that supports statewide and regional information and referral centers for persons with Alzheimer’s disease, Huntington’s disease, and Parkinson’s disease.
Recommended Action:
This program should be eliminated. The fact that these diseases have serious effects on individuals and their families does not make the case for state intervention. While it is encouraging that the state is channeling this effort through groups such as the Alzheimer’s Association, even this outsourcing effort politicizes disease management by subjecting it to the budget process. The medical establishment as well as private, nonprofit, public service organizations are capable of providing information as required. Savings: $440,000.
Program: Cancer prevention and control program
Appropriation: |
Federal Funds: |
$8,552,700 |
|
Special Revenue Funds: |
$1,534,600 |
|
GF/GP: |
$3,494,100 |
|
Total: |
$13,581,400[38] |
Program description:
This appropriation funds the Cancer Prevention and Control program, which provides grants to communities for screening and follow-up services for cancer, cancer education, and early detection, and grants for cancer prevention activities.
Recommended Action:
This funding could be eliminated. The private sector has and continues to provide these services on a for- and non-profit basis. While these diseases have serious effects on individuals and their families, the case for state intervention is weak. The medical establishment as well as private voluntary groups are capable of providing information and services as required. Savings: $13,581,400.
Program: Chronic disease prevention
Appropriation: |
Federal Funds: |
$1,228,300 |
|
Special Revenue Funds: |
$189,100 |
|
GF/GP: |
$155,000 |
|
Total: |
$1,572,400[39] |
Program Description:
This appropriation funds the Chronic Disease Prevention program, a program that provides funds to local health departments to develop community coalitions to address chronic diseases and to develop programs and provide grants to reduce chronic disease, focusing on arthritis, stroke, and obesity.
Recommended Action:
This program should be eliminated. Arthritis and strokes devastate lives of Michigan residents every day, and obesity is implicated in various health problems. Institutions of civil society, nonprofit groups, medical and community associations, and special-interest media outlets are capable of spreading the news about disease prevention and treatment. Savings: $1,572,400.
Program: Diabetes and kidney program
Appropriation: |
Federal Funds: |
$1,059,000 |
|
Special Revenue Funds: |
$93,600 |
|
GF/GP: |
$2,833,100 |
|
Total: |
$3,985,700[40] |
Program description:
This appropriation funds primarily the administrative staff and other expenses related to contracts to help mitigate diabetes and kidney disease through prevention programs.
Recommended Action:
This program should be eliminated. While well intentioned, many private groups exist to educate people about the risks of diabetes and kidney disease. For example, The National Kidney Association and American Diabetes Association both operate web sites with extraordinary amounts of information on Kidney and Diabetes-related topics. Savings: $3,985,700.
Program: Health education, promotion, and research programs
Appropriation: |
Federal Funds: |
$102,800 |
|
Special Revenue Funds: |
$726,300 |
|
GF/GP: |
$523,700 |
|
Total: |
$1,352,800[41] |
Program Description:
This appropriation funds the Health Education, Promotion, and Research programs. These programs support costs related to health research, work site and community health promotion, the tobacco program, school health, and osteoporosis prevention and treatment education.
Recommended Action:
This program should be eliminated. Basic research into health can more effectively be funded in other line items; health promotion and education of various diseases and in various settings can be done by voluntary groups and health businesses. Savings: $1,352,800.
Program: Injury control intervention project
Appropriation: |
Federal Funds: |
$325,000 |
|
GF/GP: |
$600,000 |
|
Total: |
$925,000[42] |
Program Description:
This appropriation funds the Injury Control Intervention project. This project operates and oversees programs to prevent disabilities, including fire safety, traumatic brain injury, and community childhood injury prevention programs.
Recommended Action:
This program should be eliminated. Individuals have every incentive to be concerned about their own health and safety and that of their loved ones. Institutions of civil society — individuals, private associations, and community groups — can all work to promote safe living based on their perceived needs and wants. Savings: $925,000.
Program: Morris Hood Wayne State University diabetes outreach
Appropriation: |
All from Special Revenue Funds: |
$500,000 |
|
Total: |
$500,000[43] |
Program Description:
This appropriation funds the Morris Hood Wayne State University Diabetes Outreach program which works to identify and test people who may be at high risk for contracting diabetes.
Recommended Action:
Funding for this program should be eliminated. While well intentioned, this program need not be subsidized by the state. Nonprofit organizations and other institutions of civil society work on behalf of many causes, debilitating diseases being just one. For instance, the American Diabetes Association accepts no government funds, yet it raises money privately to donate to research on the disease and the same type of community outreach work funded by the Morris Hood Wayne State University program. The American Diabetes Association has four branch offices in this state alone. They are located in Bingham Farms, Lansing, Portage, and Grand Rapids, respectively. Savings: $500,000.
Program: Obesity program
Appropriation: |
Federal Funds: |
$250,000 |
|
GF/GP: |
$200,000 |
|
Total: |
$450,000[44] |
Program Description:
This appropriation funds the obesity program, an initiative to “increase healthy eating and physical activity among consumers” and decrease the number of overweight individuals in the state.[45]
Program Recommendation:
This program should be eliminated. While there is obvious health problems associated with obesity, addressing those problems need not be a function of state government. Institutions of civil society such as individuals, community medical associations, and state and national health associations can work to raise awareness about the dangers of obesity based on their own calculus. Savings: $450,000.
Program: Physical fitness, nutrition, and health
Appropriation: |
All from GF/GP: |
$1,245,000 |
|
Total: |
$1,245,000[46] |
Program Description:
This appropriation funds grants to support a statewide network of local physical fitness, health, and sports councils so that they may develop a physical fitness curriculum. The money is used to educate the public on ways of preventing sports injuries.
Recommended Action:
This program should be eliminated. Michigan’s residents enjoy a wide variety of physical activities for health, work and recreation. Recreation and health industries have enough incentive to promote physical fitness. Savings: $1,245,000.
Program: Public health traffic safety coordination
Appropriation: |
Federal Funds: |
$350,000 |
|
GF/GP: |
$300,000 |
|
Total: |
$650,000[47] |
Program Description:
This appropriation funds the Public Health Traffic Safety Coordination program, a program that supports research on bicycle-related injures, collects emergency room data on injuries, and provides grants for child safety-seat education programs.
Recommended Action:
This program should be eliminated. Private associations, researchers, families and media sources can provide sufficient information about injury data and safety-seat requirements. Savings: $650,000.
Program: Smoking prevention program
Appropriation: |
Federal Funds: |
$1,738,500 |
|
Special Revenue Funds: |
$1,906,200 |
|
GF/GP: |
$1,900,000 |
|
Total: |
$5,544,700[48] |
Program Description:
This appropriation funds the Smoking Prevention program, a program that provides money for contracts for smoking prevention programs and projects; for enforcing clean indoor-air laws; for an anti-tobacco media campaign; and for anti-smoking materials to school districts.
Recommended Action:
Funding for this item should be eliminated. Smoking is a voluntary and legal activity whose risks are widely publicized and whose benefits are perceived differently by each person. Even if the anti-smoking efforts of the state were effective, government should not be in the business of operating prevention programs. Private institutions exist for this very purpose and would continue to do so if the government removed itself from this arena.
As for educational campaigns, Michigan schools are struggling to carry out their core academic functions; they should be freed of requirements such as the conduct of anti-smoking campaigns. Savings: $5,544,700.
Program: Violence prevention
Appropriation: |
All from Federal Funds: |
$1,446,900 |
|
Total: |
$1,446,900[49] |
Program Description:
This appropriation funds the violence prevention program. This program helps establish and support regional coalitions to prevent violence; helps develop programs to identify victims of abuse; helps conduct educational and media campaigns about violence; funds rape prevention programs; and funds domestic violence programs in schools.
Recommended Action:
These activities can be carried out through individuals and families acting in conjunction with private, voluntary organizations such as religious organizations and other nonprofits. The funding for this program could be eliminated. Savings: $1,446,900.
Appropriation: |
Federal Funds: |
$110,400 |
|
Special Revenue Funds: |
$150,400 |
|
GF/GP: |
$250,000 |
|
Total: |
$510,400[50] |
Program Description:
This appropriation funds dental programs that provide money to pay for dental services for the uninsured (including those who do not qualify for Medicaid) who cannot get “dental services due to mental or physical handicap or visual impairment.”[51]
Recommended Action:
This program should be eliminated. Statewide, dentists generously work pro bono for low-income and uninsured patients. For example, in Ypsilanti, Mich., the Hope Medical Clinic, Inc. provides volunteer dental work four days weekly and maintains a network of dentists willing to provide specialty services — such as oral surgery — free of charge. The national group, Foundation of Dentistry for the Handicapped, maintains a list of private and government subsidized “Donated Dental Services” providers for every state in the nation. This organization alone maintains a list of 642 Michigan dentists who volunteer their services individually, and in conjunction with private or government agencies. In cities across Michigan, local religious and charity groups such as the United Way and Red Cross, often maintain a referral service of dentists (among other professionals) willing to provide free services to needy clients or directly subsidize dental work.
Many other dentists simply offer free services without fanfare from their own offices. According to the 1997 Survey of Current Issues in Dentistry, 60.7 percent of American dentists provide some type of charitable (free or reduced cost) dental care through their primary practices. The majority of their charitable work goes to the low-income, and to handicapped individuals, but it also serves poor migrant workers, people who are homebound, institutionalized, or suffering from Acquired Immune Deficiency Syndrome. The average value of donated care per dentist surveyed in 1997 was over $10,000. During the same year dentists also provide reduced price services depending on a patients’ ability to pay. Overall, these professionals treated an average 42 patients each, free-of-charge, and provided reduced cost services to an additional 103.[52]
Institutions of civil society, such as family members, religious groups, civic clubs and others who generously donate their time and skills could do more if government worked to avoid crowding them out with well-intentioned but unnecessary programs. Every dollar that is taken from communities and run through distant bureaucracies is a dollar that cannot be used to help people privately and through voluntary efforts. Savings: $510,400.
Appropriation: |
All from GF/GP: |
$151,000 |
|
Total: |
$151,000[53] |
Program Description:
This appropriation funds the Dental Program for Persons with Developmental Disabilities. This program is similar to the one listed above, though it is dedicated solely to the category of “developmental disabilities.”
Recommended Action:
This program could be eliminated. As with the program described directly above, groups and individuals already work to provide dental services to special needs clients who do not have insurance. Savings: $151,000.
Appropriation: |
Federal Funds |
$6,802,400 |
|
GF/GP |
$1,591,500 |
|
Total: |
$8,393,900[54] |
Program Description:
This appropriation funds the Family Planning Local Agreements program. This program provides grant support to health departments across Michigan for, among other things, family planning.
Recommended Action:
This program should be eliminated. Family planning assistance is performed by private, nonprofit groups across the country without the aid of state subsidies. Savings: $8,393,900.
Program: Migrant healthcare
Appropriation: |
Federal Funds: |
$63,900 |
|
GF/GP: |
$136,100 |
|
Total: |
$200,000[55] |
Program Description:
This appropriation funds grants for local areas with high migrant populations, to provide healthcare, immunization outreach, and other services.
Recommended Action:
This program should be eliminated. Migrant workers are an important part of the Michigan economy, especially its agricultural sector. They come to Michigan because they perceive that the economic opportunities here are greater than elsewhere. State government should not distort these incentives by subsidizing the healthcare of these workers. Institutions of civil society exist to address all types of social ills, including those that effect migrants. Note: For more on the subject of migrant workers in Michigan see page 10. Savings: $200,000.
Program: Pregnancy prevention program
Appropriation: |
Federal Funds: |
$812,800 |
|
GF/GP: |
$5,533,300 |
|
Total: |
$6,346,100[56] |
Program Description:
This appropriation funds the Pregnancy Prevention Program, a program which supports grants to local agencies, including health departments, to provide family planning services.
Recommended Action:
This program should be eliminated. While unplanned pregnancies can pose significant challenges to both the child and the family, family planning assistance is performed by private, nonprofit groups across the country without the aid of state subsidies. The state should not interfere in family planning. Savings: $6,346,100.
Program: Sudden infant death syndrome program
Appropriation: |
Federal Funds: |
$121,300 |
|
GF/GP: |
$200,000 |
|
Total: |
$321,300[57] |
Program Description:
This appropriation funds the Sudden Infant Death Syndrome program. This program provides for grief counseling and follow-up services for families who have lost a child to Sudden Infant Death Syndrome (SIDS). It also provides funding for public education and reporting.
Recommended Action:
This funding should be eliminated. Each incident of SIDS is a tragedy for the family involved, but grief counseling and public education need not be a function of government. Extended families, religious organizations, the paid and unpaid services from professional counselors, and nonprofit groups can all work to raise awareness of SIDS and help families who have been grieved by it. Savings: $321,300.
Program: Conveyor contract
Appropriation: |
Federal Funds: |
$104,000 |
|
GF/GP: |
$455,100 |
|
Total: |
$559,100[58] |
Program Description:
This appropriation funds the Conveyor Contract program. This program supports transportation costs for families served through the Children’s Special Health-Care Services Program (CSHCS). The program is means-tested.
Recommended Action:
This program could be eliminated. Currently, families with a household income of up to 250 percent of the poverty level are eligible.[59] This means that a family of four with income up to $45,250 could benefit from these funds. Families, neighbors, friends, employers, religious groups, civic groups and businesses are capable of helping needy people with transportation. Savings: $559,100.
Program: Drug control policy
Appropriation: |
Federal Funds: |
$1,587,400 |
|
GF/GP: |
$386,000 |
|
Total: |
$1,973,400[60] |
Program Description:
This appropriation funds the Drug Control Policy program. The office seeks to reduce the use of illegal drugs through a combination of social services, education and law enforcement.
Recommended Action:
This program has laudatory objectives, but it takes money from local communities, passes it through federal and state bureaucracies, and returns the remainder of it, strings attached, to programs which often duplicate existing school-based or community-based programs. One lesson of the last 30 years of anti-drug policy is that illicit drug use is most effectively reduced through efforts financed by local community organizations and individuals. This program should be eliminated. Savings: $1,973,400.
Program: Anti-drug abuse grants
Appropriation: |
All from Federal Funds: |
$28,659,200 |
|
Total: |
$28,659,200[61] |
Program Description:
This line item funds grants for anti-drug use programs in schools and other settings. The Boys & Girls Club of Alpena received $55,000, for example, to conduct “a fine arts program, computer skills, academic enrichment, job readiness program, decision making skills, coping and communications skills” program. The Alliance for a Safer, Greater Detroit, another recipient of anti-drug funds, used $70,000 to conduct “a summer academic or sports camp experience at one of six Michigan universities.”[62] Campus mentoring programs link first-year college students with upperclassmen who “have been trained to help the freshmen adjust to college life without the use of alcohol.”[63]
Recommended Action:
This program should be eliminated. A body of evidence suggests government drug abuse prevention programs may even be counter-productive.[64] The message to refrain from drug abuse is a sound one, but it is one that is best taught by family and other members of civil society.[65] Savings: $28,659,200.
Program: Community services
Appropriation: |
Federal Funds: |
$18,761,500 |
|
GF/GP: |
$15,828,400 |
|
Total: |
$34,589,900[66] |
Program Description:
This appropriation funds programs that distribute money to Area Agencies on Aging in various parts of the state. It includes money for in-home services to the elderly; community services such as health education and training, recreational programs, homemaker and counseling programs, housing repair, and legal assistance. It also includes disease prevention efforts for the elderly poor.
Recommended Action:
This funding should be eliminated. The program is an example of how the state crowds out private effort and weakens the bonds that naturally link people together on a voluntary basis. Michiganians help the elderly, conduct house repair, and provide legal assistance voluntarily every day. Pro bono representation is a long and honored tradition in the legal profession. (Loosening restrictions on what is considered the “Unauthorized Practice of Law” could help as well. As Mackinac Center scholar George C. Leef has argued, repealing unauthorized practice of law restrictions would benefit the poor most.[67]) Unions in the building trades could offer housing repair services for free or at a reduced cost as a public service. Religious institutions and self-help groups offer counseling at nominal costs, or even free of charge. Privately organized people can meet the needs of the vulnerable ever more if the burdens of the regulatory and political state are lessened. Savings: $34,589,900.
Program: Nutrition services
Appropriation: |
Federal Funds: |
$25,100,000 |
|
Special Revenue Funds: |
$500,000 |
|
GF/GP: |
$11,689,300 |
|
Total: |
$37,289,300[68] |
Program Description:
This appropriation funds nutrition services programs. These programs provide funding to Area Agencies on Aging for the delivery of hot meals, nutrition education, and administration.
Recommended Action:
This program should be eliminated. Community groups, families and individuals could shoulder these burdens free of the bureaucracy and regulatory apparatus of government. This is an example of how the state crowds out private effort and weakens the bonds that naturally link people together on a voluntary basis. Savings: $37,289,300.
Program: Senior volunteer services
Appropriation: |
All from GF/GP: |
$5,970,000 |
|
Total: |
$5,970,000[69] |
Program Description:
This appropriation funds senior volunteer services. Funding from this appropriation goes through the Area Agencies on Aging, to support volunteering and to financially reward volunteers. In the Senior Companion Program, seniors provide 20 hours a week of care to adults in need, and are paid a stipend in return. The Foster Grandparent Program is a similar program aimed at serving children. The Retired and Senior Volunteer Program supports senior citizen volunteers generally.
Recommended Action:
This program should be eliminated. There may be no better example of how the multiple and varied spending plans of government compete with and crowd out what has historically been normal human interaction. Paying people to volunteer, while not unique to this department, is an affront to the notion of volunteering, charitable service, and civil society. Savings: $5,970,000.
Program: Senior citizen centers staffing and equipment
Appropriation: |
All from GF/GP: |
$1,130,000 |
|
Total: |
$1,130,000[70] |
Program Description:
This appropriation funds senior citizen centers’ staffing and equipment. Senior centers provide information about the low-income energy-assistance program, Medicaid, nursing homes, food stamps, and a variety of other government programs and social services. The money from this allocation supplements the budgets for those centers, which receive public and private support.
Recommended Action:
This program should be eliminated. Responsibility for funding these services should belong to the private sector. While social interaction does help promote general health and well being, the state is stepping outside its appropriate sphere by funding self-help volunteer organizations. Any number of fraternal organizations, such as the Eagles, Elks and Masons, as well as veterans groups, religious groups and clubs, not to mention families and friends, are available to help seniors. Many senior services are performed through non-profit organizations under government contract. Some already solicit private support.[71] Savings: $1,130,000.
Program: Employment assistance
Appropriation: |
All from Federal Funds: |
$2,818,300 |
|
Total: |
$2,818,300[72] |
Program Description:
This appropriation funds employment assistance. These funds, distributed to offices of the Area Agencies on Aging, are used to offer and promote part-time employment in community service agencies for senior citizens.
Recommended Action:
This funding should be eliminated. Fraternal organizations and other associations such as those noted above can identify needs for part-time workers without state mediation. Savings: $2,818,300.
Program: Respite care program
Appropriation: |
All from Special Revenue Funds: |
$7,100,000 |
|
Total: |
$7,100,000[73] |
Program Description:
This appropriation funds programs that provide respite for caregivers working with elderly persons who need around-the-clock assistance.
Recommended Action:
This line item should be eliminated for the same reasons addressed in previous respite care line items, found above. Savings: $7,100,000.
Act No. 519, Public Acts of 2002, p. 1.
The MDCH web site, “The Michigan Department of Community Health mission,” accessible on the Internet at https://www.michigan.gov/mdch/0,1607,7-132--14173--,00.html.
Ibid.
Margaret Alston, Bill Fairgrieve, Susan Frey, Tumai Burris, “Line Item and Boilerplate Summary: Community Health Fiscal Year 2002-2003,” p. 3.
Ibid.
For more information about the CON program, see the MDCH web site, “Certificate of Need,” accessible on the Internet at https://www.michigan.gov/mdch/0,1607,7-132-2945_5106---,00.html.
Wolfgang Grassl, “Government Regulation of Hospital Purchasing — Michigan Patients Pay a Heavy Price,” Mackinac Center for Public Policy, 2002, accessible on the Internet at https://www.mackinac.org/4572; and Terree Wasley, “Certificates of Need: Poor Public Policy,” Mackinac Center for Public Policy, 1993, accessible on the Internet at https://www.mackinac.org/152.
John C. Goodman and Gerald L. Musgrave, “Case Study: Elderly Mortality and State Government Regulation,” excerpted from “Patient Power,” Washington, D.C.: Cato Institute, 1992, accessible on the Internet at http://www.ncpa.org/w/w64.html.
Alston, Fairgrieve, Frey, Burris, p. 4.
Michigan Center for Rural Health web site, “Our Mission,” accessible on the Internet at http://www.com.msu.edu/micrh/index.htm.
Alston, Fairgrieve, Frey, Burris, p. 4. The original appropriation was $954,100 but was increased as a result of the July 2002 increase in the cigarette tax.
Michigan Department of Community Health web site, “Healthy Michigan Fund Report 2000-2002,” p. 23, accessible on the Internet at https://www.michigan.gov/documents/sec213nov_23228_7.pdf.
For more information on this phenomenon, see William E. Pike, “Recruiting Rural Physicians: Small-Town Socialism,” Ideas on Liberty, January 1999, p. 11-13, accessible on the Internet at https://www.fee.org/vnews.php?nid=4210 (free registration required).
Alston, Fairgrieve, Frey, Burris, p. 6.
Ibid.
Ibid, p. 7.
Correspondence with the House Fiscal Agency, Oct. 9, 2002.
Act No. 519, p. 2.
See, for example, John Adams, “Cars, Cholera, and Cows: The Management of Risk and Uncertainty,” Cato Institute Policy Analysis 335, March 4, 1999, https://www.cato.org/pubs/pas/pa335.pdf. There is an inherently subjective dimension of risk, which is why some people fear flying, even though travel by commercial airplane is statistically safer than private automobile travel.
Michigan State Police, “2000 Michigan Crash Facts, Michigan State Police,” p. 27-33, accessible on the Internet at http://www.umtri.umich.edu/tdc/mtcf/doc/2000/2000MTCF_vol1.pdf.
Act No. 519, p. 2.
Act No. 519, p. 14.
“Draft of Revised Chapter III for Prepaid Health Plans, Mental Health and Substance Abuse.” The pages for this document are not numbered. This document describes services that are provided under the Medicaid program and which are mimicked by the Community Mental health non-Medicaid services program according to Irene Kazieczko, director, bureau of mental health substance abuse and long-term care for the Michigan’s Department of Community Health.
Alston, Fairgrieve, Frey, Burris, p. 8. This program’s funding has been decreased from $5,663,800 due to a partial veto.
Ibid., p. 9.
All numbers come from Mark, Tami L; Coffey, Rosanna M King, Edward Harwood, Henrick et al, “Spending on mental health and substance abuse treatment,” Health Affairs Vol. 19, No. 4, July/August 2000, p. 108-120.
Act No. 519, p. 2.
Alston, Fairgrieve, Frey, Burris, p. 9. This program’s funding has been decreased from $6,600,000 due to a partial veto.
Ibid, p. 10. This program’s funding has been decreased from $79,740,400 due to a partial veto.
Ibid., p. 15. The original appropriation was $650,000 but was increased as a result of the July 2002 increase in the cigarette tax.
Alston, Fairgrieve, Frey, Burris, p. 15.
Act No. 519, p. 4.
Ibid.
Margaret Alston, Bill Fairgrieve, Susan Frey, and Tomai Burris, “Line Item and Boilerplate Summary: Community Health Fiscal Year 2001-02,” p. 23.
Alston, Fairgrieve, Frey, Burris, p. 24. The original appropriation was $5,000 but was increased as a result the July 2002 increase in the cigarette tax.
Healthy Michigan Fund Report, p. 5.
Ibid.
Alston, Fairgrieve, Frey, Burris, p. 24. The original appropriation was $12,081,400 but was increased as a result the July 2002 increase in the cigarette tax.
Ibid, p. 25. The original appropriation was $1,522,400 but was increased as a result of the July 2002 increase in the cigarette tax.
Ibid. The original appropriation was $1,388,500 but was increased as a result of the July 2002 increase in the cigarette tax.
Ibid.
Ibid. The original appropriation was $430,000 but was increased as a result of the July 2002 increase in the cigarette tax.
Ibid.
Ibid. The original appropriation was $255,000 but was increased as a result of the July 2002 increase in the cigarette tax.
Centers for Disease Control web site, “Overweight and Obesity State Programs: Michigan,” accessible on the Internet at http://www.cdc.gov/nccdphp/dnpa/obesity/state_programs/mi.htm.
Alston, Fairgrieve, Frey, Burris, p. 26. The original appropriation was $755,000 but was increased as a result the July 2002 increase in the cigarette tax.
Ibid.
Ibid. The original appropriation was $3,644,700 but was increased as a result of the July 2002 increase in the cigarette tax.
Act No. 519, p. 5.
Ibid.
Alston, Fairgrieve, Frey, Burris, p. 28.
The American Dental Association, “1997 Survey of Current Issues in Dentistry: Charitable Dental Care,” December 1998, p. 3, 7, 8.
Act No. 519, p. 5.
Ibid.
Ibid.
Alston, Fairgrieve, Frey, Burris, p. 30. The original appropriation was $2,851,100 but was increased as a result the July 2002 increase in the cigarette tax.
Act No. 519, p. 5.
Ibid, p. 6.
Federal poverty levels are calculated by the U.S. Department of Health and Human Services, and updated annually. The 2002 guidelines, published in the federal register, may be found at http://aspe.hhs.gov/poverty/02fedreg.htm.
Act No. 519, p. 6.
Ibid.
“Governor’s Discretionary Funds,” “Fiscal Year 2002-03 Grant Award Summary,” Michigan Department of Community Health, available online at https://www.michigan.gov/documents/ 2002-03_Governor's_Discretionary_Full_Year_Grants_43709_7.PDF.
Michigan Department of Community Health, “Campus Mentoring Program and Michigan Universities,” accessible on the Internet at https://www.michigan.gov/ mdch/0,1607,7-132-2941_4871_4878-39027--,00.html.
Dr. Gary L. Wolfram, “Dare to Privatize DARE,” Michigan Privatization Report, Fall 1998, accessible on the Internet at https://www.mackinac.org/671.
For more on the DARE program, see “Dare to Privatize DARE,” Michigan Privatization Report, Fall 1998.
Ibid.
George C. Leef, “Lawyer Fees Too High? The Case for Repealing Unauthorized Practice of Law Statutes,” Regulation magazine, accessible on the Internet at https://www.cato.org/pubs/regulation/reg20n1c.html.
Act No. 519, p. 6.
Act No. 519, p. 7.
Ibid.
Senior Services, Inc., of Kalamazoo requests volunteer labor and donations on their web site, accessible on the Internet at http://www.seniorservices1.org/Page0013.Htm. Voluntary contributions to this and similar organizations may increase if lower taxes result in more disposable income.
Act No. 519, p. 7.
Ibid.
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$0 |
$0 |
$0 |
Federal Funds |
$0 |
$0 |
$0 |
General Fund/General Purpose |
$319,732,319 |
$290,038,170 |
$29,694,149 |
Special Revenue Funds |
$2,000,000 |
$2,000,000 |
$0 |
Gross Appropriation |
$321,732,319 |
$292,038,170 |
$29,694,149 |
The community college budget for fiscal year 2003 is comprised of two types of appropriations: those for the day-to-day operations of Michigan’s community colleges, and grants, of which there are two. Substantial and immediate savings could be realized with respect to the day-to-day operations by retroactively indexing spending to two factors: inflation and enrollment, beginning in fiscal year 1985. Community college spending has grown at a far faster rate than either factor — a development that calls for greater scrutiny of requests for state funding increases.
One of the two grants, known as the “At-Risk Student Success Program,” should be eliminated. It financially rewards community colleges for labeling students “at-risk,” duplicates other funding mechanisms for special-needs students, and increases the overall cost of funding community colleges.
Program: Community college operations
Appropriation: |
All from GF/GP: |
$315,504,216 |
|
Total: |
$315,504,216[2] |
Program Description:
This appropriation funds the operational costs of Michigan’s community colleges. Michigan’s 28 community colleges provide the following: (1) low-cost courses for students planning to obtain a bachelor’s degree, (2) courses for those who wish to have special kinds of technical skills in business, industry or other fields, and (3) programs to serve the direct educational needs of the community where the college resides. Fewer than 200,000 students are currently enrolled full-time in community colleges throughout the state, a 3.4 percent drop since the 1984-1985 school year.[3]
For the fiscal year 2002-03, individual community college appropriations totaled $315,504,216. The specific appropriations according to Act 161 of 2002 are:
Alpena Community College |
$5,311,973 |
Bay De Noc Community College |
$5,129,944 |
Delta College |
$14,813,864 |
Glen Oaks Community College |
$2,485,512 |
Gogebic Community College |
$4,365,123 |
Grand Rapids Community College |
$18,633,380 |
Henry Ford Community College |
$22,708,494 |
Jackson Community College |
$12,570,441 |
Kalamazoo Valley Community College |
$12,825,971 |
Kellogg Community College |
$10,076,975 |
Kirtland Community College |
$3,058,415 |
Lake Michigan College |
$5,423,461 |
Lansing Community College |
$32,223,042 |
Macomb Community College |
$34,381,003 |
Mid Michigan Community College |
$4,586,420 |
Monroe County Community College |
$4,462,223 |
Montcalm County Community College |
$3,227,530 |
C.S. Mott Community College |
$16,291,459 |
Muskegon Community College |
$9,271,134 |
North Central Michigan College |
$3,140,212 |
Northwestern Michigan College |
$9,460,166 |
Oakland Community College |
$21,687,988 |
St. Clair County Community College |
$7,264,610 |
Schoolcraft College |
$12,728,740 |
Southwestern Michigan College |
$6,832,843 |
Washtenaw Community College |
$12,937,228 |
Wayne County Community College |
$17,223,721 |
West Shore Community College |
$2,382,344 |
Recommended Action:
While public support for higher education might be better accomplished by converting from direct funding to a system of tuition vouchers or tax credits, such a plan may not be politically feasible at this moment.[4] But it would give institutions of higher learning a stronger incentive to contain costs and to make sure that as many resources as possible are dedicated to serving students’ educational needs. There are, however, some immediate steps that the Michigan Legislature should take to deal with escalating costs.
During tough economic times there is no legitimate reason to exempt community colleges from the same budget discipline that families and state bureaucracies must face — especially since fewer full-time students attend community colleges than in 1984.
The Mackinac for Public Policy recommends using fiscal year 1985 as a base year and indexing future higher education spending to enrollment plus inflation. It is in this year that spending on higher education begins to increase most dramatically. Doing this would mean spending only $263,500,124 on community colleges in fiscal year 2004, $52 million less than in the previous year. If lawmakers do not judge such a proposal to be politically advantageous, however, spending could be rolled back by half of this amount for the time being, or $26 million in fiscal year 2004. The cuts could be distributed to universities in proportion to the size of their current appropriations. The cuts could be distributed to universities in proportion to the size of their current appropriations. In future fiscal years, the Legislature should continue a spending rollback until universities are receiving an amount equal to 1985 fiscal year dollars plus inflation and enrollment.
Proponents of dramatic spending increases may argue that a simple analysis based on enrollment and inflation ignores such factors as the cyclical nature of enrollment, the impact of increased program demands, and the increased costs of technology. While these factors affect funding needs, it is interesting that they always seem to drive overall costs upward. Where are the savings from better technology in college operations and administration? Why must funding increase when enrollment declines? Legislators and citizens should place a high burden of proof on community colleges to justify demands for increased funding. Savings: $26,002,046.
Appropriation: |
All from GF/GP: |
$3,692,103 |
|
Total: |
$3,692,103[5] |
Program Description:
This appropriation funds the at-risk student success program. The at-risk student success grant funds community college programs for students who are labeled “at-risk.” For a student to be labeled “at-risk,” he or she must meet one of the following criteria: (1) He or she must have been placed in one or more developmental course(s) as a result of poor scores on standardized tests or as a result of failure to make satisfactory academic progress; (2) he or she should have been diagnosed by a qualified professional as learning disabled; or (3) he or she should require English as a second language assistance. The majority of at-risk students fall into the first category.
The funding method for the at-risk program adds together “contact hours” for developmental and preparatory classes of students and then is divided by a college’s three-year average of all student contact hours. That result is then divided by the total number of contact hours by all community colleges in Michigan. The equals the share of funds directed to that community college for “at-risk” students. Each school also receives a base grant of $40,000 for its at-risk program.
Recommended Action:
This program should be eliminated. Providing extra assistance to students, whether “at-risk” or not, is best handled by individual, family and community efforts, not state government.
Funding of at-risk student programs in community colleges promotes a perverse system of incentives and rewards. Under the current system, a student who puts very little effort into a class and fails may be eligible for special treatment, whereas a student who puts forth a strong effort but only earns a C may not qualify. This program can actually subsidize poor performance by rewarding community colleges with additional funding.
According to the formula, community colleges receive more funding for each student labeled “at-risk.” The number of students defined as “at-risk” has gone up 20 percent in fiscal years 2000 and 2001 over each previous fiscal year, respectively, even though overall community college attendance remained fairly constant.[6] At Gogebic Community College a whopping 45 percent of students in fiscal year 2001 were defined “at-risk.”[7]
According to Rhonda Burke of the Michigan Department of Career Development, community colleges are free to change their interpretation of the guidelines for at-risk students in any particular year.[8] The state does not have a standard mechanism for community colleges to assess which students are “at-risk” and which are not. This gives community colleges wide latitude on how many students it assigns to developmental classes. In addition, community colleges need not spend their additional “at-risk” monies on students themselves.
Grants from this program may be used to fund building and technology upgrades such as new computers and software from which all students, faculty, and administrators’ benefit. During fiscal year 2001 Northwestern Community College in Traverse City used all of its at-risk funds for updating “technology related equipment and software.”[9] The annual report for the program clearly states that the “purchases need not be associated with the operation of a program designed to address the needs of at-risk students.”[10] In another example, C.S. Mott Community College in Flint allocated 42 percent of its at-risk funding to updating its “Reading Labs” and classrooms.[11] Savings: $3,692,103.
Act No. 161, Public Acts of 2002, p. 1. State spending for this item was reduced by $7,993,308 by Gov. Engler’s Executive Order 2002-22.
Ibid. State spending for this line item was reduced by $7,900,850 by Gov. Engler’s Executive Order 2002-22.
Author’s calculations based on data from the Michigan Community College Network web site, (accessible on the Internet at http://www.michigancc.net/s_d/reports/edd/feeag.pdf) and the Mackinac Center for Public Policy study Advancing Civil Society: A State Budget to Strengthen Michigan Culture, Second Edition,” April, 1996, p. 29.
See Chodorov, Frank. “Why Free Schools are Not Free” and “Private Schools: The Solution to America’s Educational Problem,” in “Figurative Essays: Selected Writings of Frank Chodorov,” Indianapolis: Liberty Press, 1980; Lieberman, Myron. “Beyond Education,” New York: Praeger, 1986; Lieberman, Myron. “Public Education: An Autopsy,” Cambridge, Mass.: Harvard University Press, 1993; Richman, Sheldon. “Separating School and State,” Fairfax, Va.: Future of Freedom Foundation, 1994; and Sommer, John W. (editor), “The Academy in Crisis: The Political Economy of Higher Education,” New Brunswick, NJ: Transaction Publishers, 1995.
Act No. 161, p. 2. State spending for this line item was reduced by $92,458 by Gov. Engler’s Executive Order 2002-22.
Michigan Department of Career Development, “At-Risk Student Success Program: Grant Expenditures and Program Summaries, January, 2002. The enrollment figures are found at http://www.michigancc.net/s_d/reports/trends/fe01.pdf, and is put out by the Michigan Community College Network.
Author’s calculations are based on three documents: The At-Risk Student Success Program report, referenced immediately above, and Michigan Community College Network, “Total Year-End Enrollments by Community College 1999-2000 and 2000-2001.” Accessible on the Internet at http://www.michigancc.net/data/ea/ea01/tyeebcc.pdf.
Telephone interview of Rhonda Burke, Michigan Department of Career Development, by Mackinac Center for Public Policy Research Assistant James Hohman, Nov. 8, 2002.
At-Risk Student Success Program report, January, 2002, no page number is given.
Ibid.
Ibid.
Appropriations Summary |
Actual [1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers: |
$111,100 |
$88,880 |
$22,220 |
Federal Funds |
$242,311,500 |
$239,832,556 |
$2,478,944 |
General Fund/General Purpose |
$35,976,300 |
$35,457,600 |
$518,700 |
Special Revenue Funds |
$276,602,600 |
$205,086,846 |
$71,515,754 |
Gross Appropriation |
$555,001,500 |
$480,465,882 |
$74,535,618 |
Consumer and Industry Services (CIS) is a 1996 creation resulting from the merger of the Michigan Department of Commerce and the Michigan Department of Labor. Its mission, according to its web site, “is to support the health, safety, economic and cultural well-being of the public through services to, and regulation of the activities of organizations and individuals.” [2]
Program: Unclassified salaries
Appropriation: |
Federal Funds: |
$551,400 |
|
Special Revenue Funds: |
$4,004,400 |
|
GF/GP: |
$1,059,900 |
|
Total: |
$5,615,700 [3] |
Program: Executive director programs
Appropriation: |
Special Revenue Funds: |
$1,720,200 |
|
GF/GP: |
$46,700 |
|
Total: |
$1,766,900 [4] |
Program Description:
This appropriation funds Unclassified Salaries and Executive Director programs that provide support services to the Director of Consumer and Industry Services. In other words, they are the Director’s staff.
Recommended Action:
With the elimination of approximately 14 percent of the Consumer and Industry Services budget (as described below) comes the ability to downsize these appropriations commensurately. This is an estimate only, and a detailed analysis of the impact of program reductions is needed to determine the actual savings. Savings: $1,033,564.
Program: Energy office positions
Appropriation: |
Federal Funds: |
$2,179,100 |
|
Special Revenue Funds: |
$ 476,500 |
|
Total: |
$2,655,600 [5] |
Program Description:
This appropriation funds the energy office positions. The Energy Office’s functions include promoting energy efficiency among Michigan’s businesses, public institutions, and residents. It distributes brochures on the efficient use of lighting, heating, cooling and automobiles. It also advocates the use of alternative fuels and “renewable” energy such as solar and wind power.[6]
Recommended Action:
The energy office should be eliminated. The private sector already has sufficient incentive to maximize energy efficiency — its own self-interest.
The for-profit utility, DTE Energy Company, is constantly investing in new energy-conserving products and services such as solar, biomass, and fuel-cell technologies. [7] Such investments may enable DTE to reap greater financial rewards for doing so. In addition, there are also nonprofit organizations that work to help people conserve energy. Urban Options of Lansing, Michigan, provides energy saving tips for lighting, windows, refrigerators and freezers, water heating, cooking appliances and dishwashers, washers and dryers, and even home computers. For a fee of $90, Urban Options will come to your home and provide a Home Energy Check Up based on your home’s energy saving needs. [8] Another nonprofit is the Community Foundation of Greater Flint, which runs an “Energy Initiative Program” to ensure that nonprofits in the area use energy wisely. [9] Savings: $2,655,600.
Program: Office of fire safety
Appropriation: |
Interdepartmental Grants: |
$111,100 |
|
Federal Funds: |
$872,300 |
|
Special Revenue Funds: |
$2,226,400 |
|
GF/GP: |
$1,598,500 |
|
Total: |
$4,808,300[10] |
Program Description:
This appropriation funds the office of fire safety. The Office’s responsibilities include inspections on new construction, reviews of architectural drawings, and fire-safety inspections for schools, prisons and foster care. It also provides certification programs for fire inspection and quality standards.
Recommended Action:
Fire-safety inspection should be outsourced to private, for-profit inspectors. Outsourcing inspections to one or more firms could reduce the cost of providing such a service by at least 20 percent. Approximate savings from outsourcing office of fire safety duties could exceed $900,000. In 1997 the Mackinac Center for Public Policy profiled one private fire safety inspector in the spring edition of Michigan Privatization Report. Jim Schifiliti of Fire Safety Consultants Inc. has worked under contract with the state of Illinois and 60 municipalities, inspecting such “critical care” units as mental health facilities and public schools. Savings: $961,660.
Program: Administrative services
Appropriation: |
Federal Funds: |
$344,200 |
|
Special Revenue Funds: |
$5,319,500 |
|
GF/GP: |
$243,400 |
|
Total: |
$5,907,100 [11] |
Program Description:
This appropriation funds Administrative Services that provide administrative support for the “general administration of the Department” of Consumer and Industry Services. [12]
Recommended Action:
With the elimination of approximately 14 percent of the Consumer and Industry Services budget comes the ability to downsize these appropriations commensurately, producing a savings of approximately $826,994. This is an estimate only, and a detailed analysis of the impact of program reductions is needed to determine actual savings. Savings: $826,994.
Program: Special project advances
Appropriation: |
All from Special Revenue Funds: |
$740,000 |
|
Total: |
$740,000 [13] |
Program Description:
This appropriation funds CIS-sponsored conferences and other general activities.
Recommended Action:
With the elimination of approximately 14 percent of the Consumer and Industry Services budget comes the ability to downsize these appropriations commensurately, producing a savings of approximately $103,600. This is an estimate only, and a detailed analysis of the impact of program reductions is needed to determine actual savings. Savings: $103,600.
Program: Low-income/energy efficiency assistance
Appropriation: |
All from Special Revenue Funds: |
$60,000,000 |
|
Total: |
$60,000,000 [14] |
Program Description:
This appropriation funds the low-income/energy office efficiency fund. This program was developed as part of the state’s 2000 electricity industry restructuring legislation. Its purpose is to provide energy assistance to Michigan residents who cannot afford to pay their utilities. The goals of the program include protecting low-income families from having their utilities shut off. In addition, this appropriation may subsidize grants to organizations working to develop better “alternative” energies such as solar and wind power. [15]
Recommended Action:
This program should be eliminated. Institutions of civil society have been helping low-income people and families pay their utility bills since centralized power companies began distributing energy directly to homes. Neighbors, religious organizations, families, and civic groups have and continue to provide such assistance. They could do more if government refrained from crowding out their efforts with programs of its own. Nonprofit charity groups such as the Salvation Army, United Way, and Citizens Energy have also provided cash assistance. Regarding government grants for developing solar and wind power, these could be eliminated as well. The alternative energy industry should be required to seek private investors, which provides much greater accountability and success, than investments by bureaucrats. Indeed, government grants may actually hamper development of such products. Savings: $60,000,000.
Program: Code enforcement
Appropriation: |
All from Special Revenue Funds: |
$7,902,000 |
|
Total: |
$7,902,000 [16] |
Program Description:
This appropriation funds code enforcement. This provides support for each of the five divisions within the Bureau of Construction Codes. These divisions are the Plan Review Division, the Electrical Division, the Mechanical Division, the Plumbing Division, and the Barrier-Free Design Program, each of which fulfill different responsibilities. [17] The program funds state inspections of buildings and other trade-related work, and issues permits as evidence that work (new plumbing and wiring, for instance) meets established construction codes.
Recommended Action:
The majority of positions funded by this line item can be outsourced to private, for-profit businesses. While the state may wish to maintain employees for contract management, to act as final arbiters on matters of code interpretation, and to oversee the licensing of new professionals in the building trades, actual inspections may be carried out by private inspectors under contract with the state. The state is already familiar with outsourcing for this type of work since it appropriates more than $1 million annually for “code enforcement flexibility,” which provides the Michigan Department of Consumer and Industry Services with funds to hire outside contractors to help meet additional inspection needs of the department.
The 52 inspectors employed by the state to make building, mechanical, electrical and plumbing inspections cost $3,435,172 in salary and benefits. Shaving 20 percent off the total cost of this program by outsourcing to the private sector could save the state $1,580,400. And this doesn’t include savings from not having to purchase equipment and other office supplies for state inspectors. Twenty percent savings is not uncommon for such services. Savings: $1,580,400.
Program: Boiler inspection program
Appropriation: |
All from Special Revenue Funds: |
$2,201,800 |
|
Total: |
$2,201,800 [18] |
Program Description:
This appropriation funds the Boiler Inspection Program. The Board of Boiler Rules runs this program. The Board is comprised of 11 members and performs the following duties: prescribes rules for boilers; provides for the licensing of boiler inspectors, installers, and repairers; sets fees for licenses, permits, inspections, and certificates; provides penalties for the violation of codes, rules, and standards.
Recommended Action:
The Boiler Inspection Program should be eliminated. According to a Department of Consumer and Industry Services, 45 percent of Michigan’s more than 73,000 registered boilers [19] already are inspected privately by insurance companies. The state currently inspects uninsured boilers, while insurance companies inspect insured boilers. This policy should change, with boiler owners assuming full responsibility for insuring and inspecting their boilers without state intervention. Savings: $2,201,800.
Program: Elevator inspection program
Appropriation: |
All from Special Revenue Funds: |
$2,287,000 |
|
Total: |
$2,287,000 [20] |
Program Description:
This appropriation funds the Elevator Inspection Program. This program is designed to ensure safe operation and installation of Michigan’s escalators, wheelchair lifts, lifting and lowering devices, dumbwaiters, and passenger elevators, and was established to prevent casualties and injuries due to mechanical failure or human error. The elevator inspection program also licenses elevator contractors.
Recommended Action:
Like boiler inspections, this program should no longer be a state function. The owners of buildings and their insurers have a compelling financial interest in making certain elevators are in safe working order. Savings: $2,287,000.
Program: Local manufactured housing communities inspections
Appropriation: |
All from Special Revenue Funds: |
$250,000 |
|
Total: |
$250,000 [21] |
Program Description:
This appropriation funds local manufactured housing communities inspections. This program provides financial assistance to local units of government that conduct manufactured home park inspections. Public Act 419 of 1976 mandates such inspections.
Recommended Action:
This task is best shouldered by local units of government if at all. Public Act 419 of 1976 could be amended to end the state mandate for such inspections. There is arguably no need for government intervention between consumers and producers of manufactured homes and parks. The consumer is capable of determining whether or not he will engage in a transaction with the provider of the good. If, after purchasing the good, he believes he has been defrauded, then he can take legal action against the seller of that good. Preventive action by the state in the form of regulation only raises the costs (barriers) for people to obtain the goods they want. Savings: $250,000.
Program: Manufactured housing and land resources program
Appropriation: |
Special Revenue Funds: |
$2,625,000 |
|
GF/GP: |
$10,000 |
|
Total: |
$2,635,000 [22] |
Program Description:
This appropriation funds the manufactured housing and land resources program. This program licenses manufactured home industry participants, from parks themselves to brokers, lessors, and manufactured home “installment repairers.” [23]
Recommended Action:
Eliminate this program for the same reasons identified under the “Local manufactured housing communities inspections” line item. Savings: $2,635,000.
Act No. 527, Public Acts of 2002, p. 1.
Consumer and Industry Services, “Mission Statement,” accessible at https://www.michigan.gov/cis/0,1607,7-154-10573-42377--,00.html.
Act No. 527, p. 2.
Ibid.
Ibid.
Ibid.
DTE Energy web site, accessible on the Internet at http://www.dteenergy.com/community/environmental/innovations.html.
Urban Options web site, “Urban Options Programs and Services,” accessible on the Internet at http://www.urbanoptions.org/programs.php.
Community Foundation of Greater Flint web site, “Energy Initiative Program,” accessible on the Internet at http://www.cfgf.org/energyrfp.pdf.
Act No. 527, p. 2.
Act No. 527, p. 3.
Bob Schnieder and Barb Endres, “Line Item and Boilerplate Summary, Consumer and Industry Services, Fiscal Year 2001-2002,” p. 5.
Act No. 527, p. 3.
Ibid.
U.S. Department of Health and Human Services web site, “Overview of Low-Income Restructuring Legislation and Implementation,” accessible on the Internet at http://www.ncat.org/liheap/dereg/states/michigan.htm.
Act No. 527, p. 5.
Schneider and Endres, p. 21.
Act No. 527, p. 5.
Interview with Assistant Chief of the Boiler Division William Vallance, Consumer and Industry Services, by Mackinac Center for Public Policy Research Associate James Hohman Feb. 25, 2003.
Ibid.
Ibid.
Ibid.
Schneider and Endres, p. 22.
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$3,318,500 |
$3,318,500 |
$0 |
Federal Funds |
$26,403,400 |
$26,199,525 |
$203,875 |
General Fund/General Purpose |
$1,618,747,000[2] |
$1,567,506,748 |
$51,240,252 |
Special Revenue Funds |
$55,881,700 |
$53,255,010 |
$2,626,690 |
Gross Appropriations |
$1,704,350,600 |
$1,650,279,783 |
$54,070,817 |
Two options for savings are presented in this chapter. The first offers specific recommendations to the legislature on where to cut spending. The second option involves outsourcing management of the entire system, and the savings that could be achieved.
Operating under Act 232 of 1953, the Michigan Department of Corrections (DOC) is the citizen’s agent for limiting the liberty of those convicted of violating the most serious of society’s legal standards of behavior. It does this through operating prisons and camps, and administering systems of probation (an alternative to imprisonment) and parole (supervision for a time after imprisonment), as well as other means of punishment. There are many crime prevention theories in the academic literature, and the department employs several of them, including incarceration, deterrence, and rehabilitation.[3] It operates as guardian, tutor, physician and counselor to those under its charge. In addition to operating its own system of facilities, the department works with counties to deal with criminals who commit less serious crimes.
The duties the Michigan Department of Corrections carries out include, but are not limited to:
The state’s correction system represents one of the largest components of state spending. Indeed, the state will spend over $1.7 billion operating the Department of Corrections during the fiscal year 2003. Only 2 percent of that amount comes from federal funds; 95 percent comes from the general fund/general purpose portion of the state budget, the area of the budget over which lawmakers have the most spending discretion.
The Department of Corrections (DOC) was responsible for administering criminal penalties to roughly 1.2 percent of Michigan’s population, or 121,215 individuals as of Feb. 28, 2003.[4] It operates 42 prisons and 11 camps (including one “boot camp”), which house over 86,000 prisoners. DOC employees monitor an additional 54,000 convicts through probation and another 14,000 through parole. The department also houses approximately 450 offenders in corrections centers (halfway houses) and supervises approximately 1,000 people through electronic monitoring (“tethers”).[5] In an attempt to reduce the cost of building and operating more prison beds, the department contracts with counties to house certain inmates; in fiscal year 2001, it paid counties over $17.1 million to house nearly 4,700 offenders in county jails rather than state prisons.[6]
The DOC employs a large number of people — nearly 19,000 — to oversee this population. Roughly half of the department’s employees are corrections officers (prison guards). The other half includes not only parole and probation agents, along with managers and administrative support, but social workers, teachers and medical personnel. Within and alongside a prison system, the department runs healthcare, job-training, and social-service systems.
The state attempts to help prisoners with their re-entry into society. But so do religious and secular groups such as Prison Fellowship and the Safer Foundation. Commercial firms such as Corrections Corporation of America and Cornell Corrections build and operate entire prisons for other states, often providing higher quality at a lower cost. These private-sector companies could run similar operations here. In New Mexico, 44 percent of prisoners are incarcerated under private management. In Michigan, less than 1 percent are managed privately.
Appropriation: |
All from GF/GP: |
$1,313,600 |
|
Total: |
$1,313,600 [7] |
Appropriation: |
All from GF/GP: |
$8,735,800 |
|
Total: |
Program Description:
This appropriation funds unclassified positions and executive direction programs that provide support services to the director of the MDOC. In other words, they are the director’s staff.
Recommended Action:
With the elimination of approximately 6 percent of the MDOC budget comes the ability to downsize these appropriations commensurately, producing a savings of approximately $301,482. This is an estimate only, and a detailed analysis of the impact of program reductions is needed to determine exact savings. Savings: $301,482.
Program: Substance-abuse testing and treatment
Appropriation: |
Federal Funds: |
$2,912,500 |
|
GF/GP: |
$17,163,000 |
|
Total: |
$20,075,500[10][11] |
Program Description:
This appropriation funds programs funded under a U.S. Department of Justice grant (Residential Substance Abuse Treatment for State Prisoners), which provides a 272-bed, in-prison “therapeutic community” for low-risk prisoners nearing their release date. In-house programs are followed by community care. The program is conducted at Cooper Street Correctional under a contract with Western Michigan University.
Recommended Action:
The state could contract out for the provision of all substance-abuse programs with for-profit or non profit firms, such as Wackenhut, Inc., Corrections Corporation of America, or Cornell Corrections, Inc.
To the DOC’s great credit, drug abuse among prisoners has declined dramatically in Michigan, from 9 percent to 0.5 percent in roughly a decade.[12] Maintaining a captive audience, conducting strict surveillance, and limiting prisoners’ contact with the outside world helps facilitate success.
This decrease in drug use has been accompanied by a huge increase in spending on substance-abuse programs. Since 1990, spending has increased 1,700 percent, going from $1,306,700 to $23,869,150.[13] In large measure, this is due to vigorous expansion of treatment. The number of admissions for outpatient and residential treatment of offenders in camps or prisons jumped from 579 in 1989 to 5,806 in 2001, and community residential program (halfway houses) admissions increased from 382 to 1,773 during the same time. The increases were particularly dramatic for offenders on probation and parole: from 67 to 8,656 for parolees and from 0 to 4,441 for probationers.[14] For 2001, the treatment was roughly split between outpatient (5,004 individuals) and education (5,121), with a smaller number (762) in residential programs.[15]
Using community groups to provide substance-abuse counseling and services could save the state millions — and promote a stronger civil society. Privately run prisons and jails, for example, show promise of getting better results at a lower cost. The Dallas County (Texas) Judicial Treatment Center is a privately managed operation, owned by Cornell Corrections, Inc. This 300-bed residential, community-based treatment program has won favorable notice from the Council of State Governments, which commended the program for its “significantly lower arrest rates” for offenders who completed the program. The 11 percent recividism rate (after one year) was half the rate of non-participants, and won the facility a “best practice” award from the American Correctional Association.[16] In Florida, the state’s Corrections Commission observed that private prisons “provided additional educational, vocational, substance abuse and other programs for inmates, whereas state-operated facilities have not kept pace with providing programs.” Inmates in Minnesota gave higher marks to substance-abuse programs in privately run prisons than to those in government-run prisons.[17] Savings of 7 to 10 percent are not uncommon when such programs are outsourced to for-profit groups. When estimating the savings for this section of the budget, the Mackinac Center for Public Policy will use 7 percent. Savings: $1,405,285.
The Field Operations Administration is, broadly speaking, responsible for overseeing convicts who are not in the state’s prisons. It is responsible for community corrections, parole, the Special Alternative Incarceration program (“boot camp”), and probation and parole.
Program: Field operations
Appropriation: |
Special Revenue Funds: |
$8,200,900 |
|
GF/GP: |
$113,752,800 |
|
Total: |
$121,953,700 [18] |
Program Description:
This appropriation funds field operations which includes the personnel costs of parole and probation agents, their clerical and administrative staff, office expenses, and the community work service crews.
Recommended Action:
Michigan’s probation and parole system should be modeled after the bail system, which uses private incentives and actors to achieve important public goals, at minimal cost to the taxpayer. The state should test the viability of such a plan with a pilot program in several small counties and in a portion of a larger county.
Bail agents, typically used in pre-trial situations, posts the bond of a defendant, in exchange for a percentage, often 10 percent of the bond. The bail agent has a powerful incentive, then, to make certain that the defendant actually shows up in court — if he does not, the agent loses not just 10 percent of the bond amount, but all of it. Bond agents may use a variety of methods, such as requiring a family member to co-sign the bond, to guarantee their success. Agents also use bounty hunters, typically other bondsmen or private investigators, who work on a part-time basis, to recover fugitives. Like the bondsman, a bounty hunter has a powerful incentive to succeed: no recovery, no pay.
With these financial incentives in place, the private bail system works well — and at no public cost — compared with public release programs. According to a Department of Justice study, only 15 percent of felony defendants on surety (monetary) bonds fail to appear, compared with 26 percent who are released on their own recognizance, and 42 percent for those released with unsecured bonds. Moreover, felony defendants released on surety bonds had a 9 percent re-arrest rate; those released on recognizance and unsecured bonds were re-arrested at rates of 15 and 16 percent, respectively.[19]
Under the current system of probation and parole, offenders are subjected to a number of requirements such as getting a job or enrolling in school, avoiding known felons, and reporting to probation and parole agents. Under a privatized probation and parole system, in exchange for release, the offender would have to post a bond, the amount for which would be set by the courts or a parole board. Those offenders who violate the terms of their probation or parole would lose this money, which could then be used in the criminal justice system.
Many offenders would require the help of a bondsman, who would then (most likely) enlist family members or friends as co-signers. Money would come from the offender’s assets (where they exist), his family and friends, wages earned either in prison or in the free labor market. As is the case with pre-trial bail, bondsmen would have a strong incentive to monitor the behavior of their charges, and might employ bounty hunters to pursue absconders.
This financial obligation would integrate offenders back into their communities, friends and families, who would have a greater stake in helping the offender stay straight. Tying the offender back into the community is a key element in reducing recidivism. This would, of course, benefit the broader civil society through reduced crime and reduced spending on criminal law enforcement.
As a recent study on “Broken Windows Probation” pointed out, “Achieving the full value of probation [and by extension, parole] … will require that a long-term commitment be made to investing in and restoring the community to the business of offender supervision.”[20] Broken Windows is a term used by the Manhattan Institute, a New York-based research institute, for not letting vandalism go unchecked. The idea is that if vandalism, for instance, goes unchecked, people will conclude that officials don’t care, and vandalism will increase. Making an offender’s status on probation or parole more subject to his or her family and friends, who have a financial stake in the offender’s integration into civil society, can be a key first step into a better system of social integration for ex-convicts.
The system would probably need to retain at least some use of government employees. Public policy in Michigan already calls for offenders to make at least partial payment for their custody and oversight; this principle could be applied to an arrangement of private-market bonds for probationers and parolees. But by shifting the risk of offender relapse to private bondsmen, offenders and their families, the taxpayers would save perhaps 90 percent of the current cost of probation and parole. A pilot program could aim for a 10 percent system-wide savings, or $12 million.
If a pilot program were successful, a statewide application could allow the state to do away with some of its other, non-prison sentences, such as those to corrections centers (halfway houses for prisoners nearing the end of their sentences). Offenders subjected to electronic monitoring could be supervised under a privatized probation and parole system as well. Savings: $12,195,370.
Program: Loans to parolees
Appropriation: |
All from GF/GP: |
$294,400 |
|
Total: |
$294,400[21] |
Program Description:
This appropriation funds a program whose goal, as stated by department policy, is to provide parole prisoners with “reasonable maintenance and subsistence for a two-week period.”[22] Parolees are to repay the money within 180 days of receipt.
Recommended Action:
This program should be eliminated. While the goal of helping out ex-prisoners adjust to life outside is worthy and even in the state’s interest, a revolving loan fund could be turned over either to private bail agents or nonprofit groups that are interested in helping felons as they re-enter society. Savings: $294,400.
Program: Parole/probation services
Appropriation: |
All from Special Revenue Funds: |
$2,455,300 |
|
Total: |
$2,455,300[23] |
Program Description:
This appropriation funds administrative costs, staff training and counseling, and employment assistance for offenders.
Recommended Action:
If parole and probation services are turned over to private bail agents, the need for training state employees to perform these functions could decrease dramatically — perhaps by half. Savings: $1,227,650.
Program: Corrections centers
Appropriation: |
Special Revenue Funds: |
$1,404,800 |
|
GF/GP: |
$7,627,700 |
|
Total: |
$9,032,500[24][25] |
Program Description:
This appropriation funds Corrections centers. Corrections centers, part of community residential programs, are supervised living arrangements other than prisons. They are meant for convicts who are nearing their time of parole. Some prisoners live in a center with 24-hour security coverage, while others are placed on electronic monitoring. Prisoners must pay for the cost of their room and board if housed in a center, or for the cost of electronic monitoring, if they live on their own.
Prisoners who have committed certain crimes, such as sex crimes or drug trafficking, are not eligible for this program. Most prisoners who enter these programs do so in the last six months before their eligibility for parole. All those prisoners involved must be enrolled in a school or training program, or working. Corrections centers will be phased out by the Truth in Sentencing law, which will make those covered by the law ineligible for release from prison before the completion of a minimum sentence.[26]
Recommended Action:
These convicts are, of all people under the supervision of the department, perhaps the most interested in living in compliance with the law. Applying the private bondsman model to the community corrections operations could produce large savings. For the purposes of estimating possible savings the Mackinac Center for Public Policy will use the 10 percent figure referenced in the bondsman program, above. Savings: $903,250.
Program: Electronic monitoring center
Appropriation: |
Special Revenue Funds: |
$4,384,700 |
|
GF/GP: |
$100 |
|
Total: |
$4,384,800[27] |
Program Description:
Funds the various centers across the state that monitor prisoners by means of electronic surveillance (tethers).
Recommended Action:
Again, a private bondsman market is a way for the state to use the private interests of bondsmen and prisoners and their families to achieve the public interest. For purposes of estimating savings from this line item, the 10 percent figure referenced in the bondsman program above will be used. Savings: $438,480.
Program: Academic/vocational programs
Appropriation: |
GF/GP: |
$37,304,900 |
|
Total: |
Program Description:
The DOC offers adult basic education programs to all prisoners, aimed at helping them pass the GED exam. The department also offers training in 13 trades, among them: horticulture, custodial maintenance technology, building trades, food-service management, automobile mechanics, visual graphics technology, and optical technician work.[30] Unions, contractor associations, and private businesses are better able to provide such training, since they are more aware of market conditions and what skills are required for a particular job.
Recommended Action:
The state should eliminate this program by turning over all educational and vocational programs to private, for-profit and non-profit groups. Community activists, prison-focused nonprofits, and unions have an interest in promoting a steady supply of qualified, competent, honorable ex-convict workers, and are in a better position to understand what job skills will be needed in the workplace. Savings: $37,304,900.
Appropriations Summary |
Actual |
Recommended |
Savings |
Interdepartmental Grants |
$3,318,500 |
$ 2,820,725 |
$497,775 |
Federal Funds |
$26,403,400 |
$22,442,890 |
$3,960,510 |
GF/GP |
$1,618,747,000[31] |
$1,377,825,325 |
$240,921,675 |
Special Revenue Funds |
$55,881,700 |
$47,499,445 |
$8,382,255 |
Gross Appropriations |
$1,704,350,600 |
$1,450,588,385 |
$253,762,215 |
States across the country have been grappling with how to operate their prison systems as efficiently and effectively as possible. One option growing in popularity is outsourcing prison management. In Texas, Tennessee and also here in Michigan, private firms have lowered the cost of running corrections systems. The idea could be further explored in Michigan, since taxpayers, state officials, and prisoners themselves could derive tremendous benefits.
Although the state of Michigan has not engaged in privatization on a large enough scale to produce the kinds of savings potentially available, it has experimented with the idea with good results. In 1999, the state contracted with a private firm, Wackenhut Corrections Corporation, to build and operate a single correctional facility in Baldwin. Opened in 1999, the Michigan Youth Correctional Facility has space for 450 men under the age of 20. The DOC estimates that the facility saves between $6,975 and $19,125 per day based on comparison with state-run prisons. On a per-year basis, this comes to between $2.5 million and $6.9 million annually — for just one facility.
Such savings are not uncommon. A survey of 28 studies of prison privatization by the Reason Foundation, a Los Angeles-based research institute, found that virtually all private prisons save money — typically between 10 and 14 percent of the cost of government prisons.[32] Three recent studies done by Louisiana State University, the Arizona Department of Corrections, and the state of Florida found cost savings from 3.75 percent to 14 percent, with no decrease in the quality of services.[33] The Florida study found that private prison construction costs in Florida were 24 percent lower than they would have been had the state built its own facilities.[34]
Cost savings is not the only reason units of government adopt privatization for building and/or operating correctional facilities. Privatization also:
Relieves overcrowding.
Governments can increase inmate housing capacity faster by contracting with the private sector. Private firms in Pennsylvania, for example, built a prison in two years less than it took the state to build a similar prison nearby — and for $38 million less — while saving the county in which it was built $1.5 million annually in lower debt costs. In Houston, a new Immigration and Naturalization Service detention facility was expected to cost $26,000 per bed and take 30 months to build, working through normal government construction procedures. A private firm did the job for $14,000 per bed in less than six months. [35]
Improves quality.
States can improve quality when they use contractors. A 2002 review of 18 prison quality studies by the Reason Foundation found that 16 conclude that privately run prisons performed at least as well as government-run prisons.
By some measures the private prisons do even better. The American Corrections Association (ACA) is a private, nonprofit group that operates as a private regulatory body — ensuring that the services of its members meet certain standards before they receive accreditation. In order to earn ACA accreditation, a prison must meet guidelines that include staff training, fiscal controls, food service, sanitation, and safety and emergency procedures. The Association maintains 19 unique manuals of standards, each of which applies to a different type of correctional facility.[36] While only 10 percent of America’s 48,000 government-run prison facilities are accredited by the ACA, 44 percent of privately run facilities are so accredited. [37]
The Harvard Law Review recently looked at studies of public and private prisons to determine whether the quality of prison services suffered when they were delivered privately. According to the author, “. . . [N]one of the more rigorous studies finds quality at private prisons lower than quality at public prisons on average, and most find private prisons outscoring public prisons on most quality indicators.”[38]
More innovative.
Private firms can offer states more flexibility in planning and designing prisons and prison operations. Because they are subject to market competition, they must innovate as a matter of survival. For instance, a private prison administrator discovered that the Virginia Department of Corrections maintained expensive warehouses for food, out of fear that deliveries would not reach prisons. This long-standing custom first developed when food was delivered to prisons by pack mules. The system simply had no motive to change until a private firm was hired to save the state money.[39] In Florida, privately run prisons have introduced more advanced locking systems, a greater use of camera surveillance, and a host of other innovations. [40]
While Michigan has only experimented with prison privatization, other states have done far more and with great success. In New Mexico, for example, 44 percent of state and federal inmates are housed in facilities under private management. In Oregon the number is 43 percent. By comparison, only 0.9 percent of all Michigan inmates are incarcerated under a private management system.[41]
No state has privatized the management of its entire correctional system. However, one state, Tennessee, came close to being the first, but was thwarted by political pressure to abandon the move in 1998. Tennessee expected to save more than 22 percent of its corrections budget annually — or $100 million — by contracting with Corrections Corporation of America, a private, for-profit prison management business.[42] If Michigan were to contract with such a corporation and shave just 15 percent from its corrections budget, the state would see annual savings of $240 million. Savings: $240,921,675.
Act No 524, Public Acts of 2002, p. 2.
Governor Engler cut the state corrections budget by $12,602,500 through Executive Order 2002-22. The majority of these cuts, effect specific institutions and would only reduce Option I savings by $1,077,000.
Incarceration refers to the fact that if criminals are in prison, they are unable to commit other crimes. The theory of deterrence holds that would-be criminals will not commit crimes if they know that punishment awaits, while rehabilitation involves changing the thought patterns of prisoners so that they will not commit further crimes once released.
Telephone interview of Leo Lalonde, director, public information office, Michigan Department of Corrections (MDOC), by Mackinac Center for Public Director of Fiscal Policy Michael LaFaive, Feb. 28, 2003.
The U.S. Census Bureau estimated Michigan’s population in 2001 at 9,990,817. The number of institutions and offenders comes from the (MDOC) “2001 Annual Report,” p. 61-62, which is accessible on the Internet at https://www.michigan.gov/corrections/1,1607,7-119-1441_1523---,00.html. Population estimates are accessible on the Internet at http://quickfacts.census.gov/qfd/states/26000.html.
MDOC Annual Report 2001, p. 18.
Act No. 524, p. 2.
Ibid.
This appropriation was reduced by $100,000 in Gov. Engler’s Executive Order 2002-22.
Ibid.
This appropriation was reduced by $200,000 in Gov. Engler’s Executive Order 2002-22.
MDOC web site, “Positive Drug Tests Reduced,” accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-9741_9745-29054--,00.html.
MDOC web site, “Increase in Funding,” accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-9741_9745-29060--,00.html.
MDOC web site, “Number of Offenders in Treatment,” accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-9741_9745-29063--,00.html.
MDOC web site, “Treatment in Prisons and Camps,” accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-9741_9745-29066--,00.html.
Becca Hamrin, “The Straight Dope: Drug Testing and Treatment in the Correctional System,” State Trends, Council of State Governments, Spring 1999, p. 3-4, accessible on the Internet at http://stars.csg.org/trends/1999/spring/sp99st3.pdf. See also “Third Quarter News,” home page of Prof. Charles W. Thomas, accessible on the Internet at http://web.crim.ufl.edu/pcp/html/398news.html, and Segal and Moore, “Weighting the Watchmen: Evaluating the Costs and Benefits of Outsourcing Correctional Services, Part II: Reviewing the Literature on Cost and Quality Comparisons” Reason Public Policy Institute, Part II, p. 11.
Segal and Moore, Part II, p. 13, 16.
Act No. 524, p. 2.
Much of the material in this section is derived from Morgan O. Reynolds, “Privatizing Probation and Parole,” National Center for Policy Analysis Policy Study 233, June 2000, accessible on the Internet at http://www.ncpa.org/studies/s233/s233.html.
Reinventing Probation Council, “Transforming Probation Through Leadership: The ‘Broken Windows’ Model,” Center for Civic Innovation at The Manhattan Institute and the Robert A. Fox Leadership Program at the University of Pennsylvania, July 2000, p. 3, accessible on the Internet at http://www.manhattan-institute.org/html/broken_windows.htm.
Act No. 524, p. 2.
Marilyn Peterson and Tumai Burris, “Line Item and Boilerplate Summary: Corrections Fiscal Year 2001-2002,” p. 7.
Act No 524, p. 2.
Ibid.
This appropriation was reduced by $27,000 in Gov. Engler’s Executive Order 2002-22.
Profile taken from “Community Residential Programs” section of the MDOC website, accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-1435-5035--,00.html.
Act No. 524, p. 2.
Ibid., p. 3.
This appropriation was reduced by $750,000 in Gov. Engler’s Executive Order 2002-22.
MDOC web site, “Education: The Highest Priority,” accessible on the Internet at https://www.michigan.gov/corrections/0,1607,7-119-9741_9747---,00.html.
This is the actual appropriation based on Act No. 524. However, in December, 2002 Gov. John Engler signed Executive Order 2002-22, which reduced spending on specific correctional facilities by $12,602,500. The Mackinac Center for Public Policy has subtracted this figure from the original GF/GP appropriation before calculating possible savings from outsourcing the entire system.
Segal and Moore, Part II, Tables 2a, 2b, and 2c, p. 3.
Alexander Volokh, “A Tale of Two Systems: Cost, Quality, and Accountability in Private Prisons,” Harvard Law Review, May, 2002, Vol. 115, No. 7, p. 1868.
Ibid.
Segal and Moore, “Weighing the Watchman: Evaluating the Costs and Benefits of Outsourcing Correctional Services, Part I, Employing a Best-Value Approach to Procurement,” p. 3.
American Corrections Association, “Facts About the Accreditation Process,” p. 7. This document is not dated.
Segal and Moore, Part I, p. 12.
Volokh, from the section entitled, “Evidence from the Studies,” p. 1877.
Segal and Moore, Part I, p. 4.
Office of Program Policy Analysis and Government Accountability, Florida Legislature, “Review of Bay Correctional Facility and Moore Haven Correctional Facility,” Report No. 97-68, April, 1998.
U.S. Department of Justice, Bureau of Justice Statistics Year-End 2001 Report, “Prisoners in 2001,” p. 8.
National Conference of State Legislatures web site, “Tennessee Considers, Retreats from Large-Scale Prison Privatization,” ,” May, 1998. Accessible on the Internet at http://www.ncsl.org/programs/cj/cjl40598.htm.
Appropriations Summary |
Actual [1] |
Recommended |
Savings |
Interdepartmental Grants/Transfer |
$1,000,000 |
$1,000,000 |
$0 |
Federal Funds |
$165,731,500 |
$176,430,300 |
$(10,698,800) |
General Fund/General Purpose |
$27,886,600 |
$16,736,600 |
$11,150,000 |
Special Revenue Funds |
$19,774,900 |
$28,777,200 |
$(9,002,300) |
Gross Appropriation |
$214,393,000 |
$222,944,100 |
$(-8,551,100)[2] |
The Michigan Department of Education (MDE) is the administrative arm of the Michigan State Board of Education. The board appoints the state’s superintendent and implements federal and state mandates in education. The most effective way to improve Michigan’s K-12 system would be to allow full educational choice so that parents could choose the best and safest public, private or home schools. The Mackinac Center for Public Policy has devised several school choice policy proposals in Michigan, including universal tuition tax credits. In the short term, the MDE should move to eliminate the following programs that are unnecessary to the basic education of Michigan’s children.
Program: Central office administration
Appropriation: |
Special Revenue Funds: |
$31,900 |
|
Total: |
$31,900[3] |
Program Description:
This administrative expenditure should be eliminated in conjunction with the elimination of the state driver-training programs described below.
Recommended Action:
If the recommendations regarding elimination of the state driver-training programs are implemented, then the administration of those programs could be eliminated as well. Savings: $31,900.
Program: State programs
Appropriation: |
Special Revenue Funds: |
$9,094,300 |
|
GF/GP: |
$11,150,000 |
|
Total: |
$20,244,300[4] |
Program Description:
This appropriation subsidizes several state programs. During the 2003 fiscal year grants will be distributed to the following programs:
Driver Education |
$7,600,000 |
Motorcycle Safety Education |
$1,200,000 |
Off-Road Vehicle Safety Training Grant |
$294,300 |
National Board Certification Grant |
$100,000 |
School Readiness Grants |
$11,050,000 |
The first three grants are self-explanatory. The National Board Certification Grant pays 50 percent of the fees for teachers who wish to be certified by the National Board for Professional Teaching Standards. The School Readiness Grants are given to private organizations to help support pre-Kindergarten education for children.
Recommended Action:
The three state-run vehicle education programs should be eliminated. Individuals who require vehicle training should pay for such programs themselves. Indeed, this is already being done.[5]
The National Board Certification grant program should also be eliminated. There is little evidence that certification by the National Board of Professional Teaching Standards is effective in raising student achievement.[6] However, if teachers desire such certification they are free acquire it using their own resources. Many different professionals seek certification or board membership and are required to pay from their own funds. There is no reason to treat teaching professionals any differently than economists, accountants, or financial planning professionals.
The school readiness grants should be eliminated also. Parents have a clear incentive — the academic success of their child — to ready their children for formal education. Supplemental assistance, if necessary, should be provided and funded by local community organizations. Savings: $20,244,300.
Programs to be Transferred to Education Department
Program: Michigan merit award board/MEAP administration
Appropriation: |
Federal Funds: |
$10,698,800 |
|
Special Revenue Funds: |
$18,128,500 |
|
Total: |
$28,827,300[7] |
Program Description:
The Michigan Department of Treasury administers the program through which Michigan students receive scholarship money for scoring well on the Michigan Education Assessment Program achievement test.
Recommended Action:
This program should be transferred back to the Department of Education. There is little reason for the MEAP test and the accompanying scholarship program to be in the Department of Treasury. Transfer: $28,827,300.
Act No. 522, Public Acts of 2002, pp 1-5. Note that the gross appropriation is much lower than previous years since much of the federal “No Child Left Behind Act” funding has been integrated into the state school aid appropriations bill, Act No. 191, Public Acts of 2002.
This figure is negative due to the Mackinac Center for Public Policy recommendation that the Michigan merit award board/MEAP Administration be transferred to the Department of Education from the Department of Treasury.
Act No. 522, p. 2.
Ibid., p. 5.
A number of private companies, such as Sears Authorized Driving School, Inc. and ABC Driving School in Detroit already offer private driver education classes. See Peter Leeson, “On the Road to Privatization,” Michigan Privatization Report, Spring 1998, accessible on the Internet at https://www.mackinac.org/642.
See, for example, Danielle Dunne Wilcox, “The National Board for Professional Teaching Standards: Can It Live Up to Its Promise?” in “Better Teachers, Better Schools,” Marci Kanstoroom and Chester E. Finn, Jr., editors., Washington, D.C., Thomas B. Fordham Foundation, 1999.
Ibid, p. 13.
Appropriations Summary |
Actual [1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$14,042,900 |
$14,042,900 |
$0 |
Federal Funds |
$131,521,400 |
$130,927,005 |
$594,395 |
General Fund/General Purpose |
$69,442,500 |
$68,915,920 |
$526,580 |
Special Revenue Funds |
$189,812,800 |
$182,458,425 |
$7,354,375 |
Gross Appropriation |
$404,819,600 |
$396,344,250 |
$8,475,350 |
The Department of Environmental Quality (DEQ) was created by Executive Order in 1995 as the state’s principal regulatory agency for air, land, water and other natural resources. With a full-time staff numbering 1,679, the department monitors air and water quality, administers state and federal discharge and emissions permits, enforces public compliance with numerous environmental requirements, and promotes pollution prevention.
By creating the DEQ, then-Gov. John Engler sought to consolidate regulatory functions previously administered, along with various recreation and conservation programs, by the Department of Natural Resources. Proponents say the re-organization eliminated a severe backlog of environmental permit applications, streamlined bureaucracy, and improved regulatory accountability.
Further improvement is possible. A proliferation of duplicative environmental regulations continues to impose ever-greater burdens on both the DEQ and the public, exacerbating Michigan’s budget crisis. State government cannot afford to duplicate environment-related services that are already provided by businesses, private landowners, or environmental groups. Neither can they afford to undertake programs that yield marginal benefits. Priorities must be set to maximize environmental improvements. The programs identified below fall into one or both of these categories.
Program: Clean Michigan Initiative – administration
Appropriation: |
All from Special Revenue Funds: |
$2,885,700 |
|
Total: |
$2,885,700 [2] |
Program Description:
This appropriation funds the administration of the Clean Michigan Initiative (CMI). This initiative is a $675-million bond fund for redeveloping contaminated sites, protecting and improving water quality, abating lead contamination, revitalizing community waterfronts, enhancing recreational opportunities, and cleaning up contaminated sediments in lakes, rivers and streams. By state law, CMI funds are not allowed to supplant General Fund appropriations, and administrative costs are supposed to be capped at 3 percent of expenditures.
Recommended Action:
These funds should be withdrawn. The use of CMI bond funds dramatically increases the state’s debt load. A recent study by the Mackinac Center for Public Policy found that taxpayers will repay about $1.60 for every dollar spent on CMI projects.[3] Thus, it is fiscally irresponsible to use CMI funds for administrative purposes, especially when the appropriation may be supplanting General Fund support in violation of state law. In CMI’s case, funds for administration are being distributed among five different DEQ departments, only one of which (Surface Water Quality) is receiving new CMI program funds. Savings: $2,885,700.
Appropriation: |
Federal Funds: |
$557,300 |
|
Special Revenue Funds: |
$2,542,500 |
|
GF/GP: |
$2,859,200 |
|
Total: |
$5,959,000[4] |
Program Description:
This appropriation funds the administration costs of a Lansing-based laboratory that analyzes environmental samples for nearly all of the DEQ’s environmental programs.
Recommended Action:
We recommend that the state seek competitive bids for the services now being performed by the laboratory aervices administration. Accurate analyses of water, air and soil samples are crucial both to protect public health and as a guide in resource management decisions. While we do not question the competency of lab personnel, a strong case can be made for outsourcing these lab functions. Competitive bidding would likely reduce lab costs while also spurring efficiency and innovation in testing procedures. According to Nicole Haskins, project scientist at LabSeek, Inc., a for-profit corporation that bills itself as “a convenient one-stop source for laboratory outsourcing,” savings in the range of 10 percent to 20 percent can be achieved by outsourcing state laboratory services. For purposes of estimating savings, the Mackinac Center for Public Policy will use a figure of 15 percent. Savings: $893,850.
Appropriation: |
All from Special Revenue Funds: |
$16,544,700 |
|
Total: |
$16,544,700[5] |
Program Description:
This appropriation funds the Environmental cleanup & Redevelopment program, a program which undertakes cleanup activities at contaminated sites for which a liable party will not or cannot assume responsibility. Cleanups of contaminated sites to promote redevelopment also are undertaken, as well as the administration of state matching funds for federal Superfund sites.
State law regulates how the funds are spent. Redevelopment projects cannot be funded until all Superfund-match requirements are satisfied and projects with acute contamination are funded. Any remaining funds must be evenly split between urban and non-urban redevelopment projects.
Recommended Action:
Eliminating acute threats to public health is a legitimate function of state government. Whether the DEQ accurately defines acute contamination or efficiently manages site cleanups, are issues beyond the scope of this paper. However, there is ample evidence that civil servants – no matter how resourceful – are simply less equipped than entrepreneurs to appropriately assess redevelopment prospects.
State government is, by its very nature, more receptive to political forces than to market trends. Indeed, numerous are the instances in which the state has invested tens of millions of taxpayer dollars in redevelopment schemes that failed to return the expected results. Nor is site contamination the only factor inhibiting redevelopment of “brownfield” sites. Consequently, appropriations under this line item should be restricted to the cleanup of sites posing an acute threat to public health. In the short-term, this could reduce program expenditures by $1 million annually, and even more in future years as the number of acutely contaminated sites diminishes. Savings: $1,000,000.
Appropriation: |
Federal Funds: |
$420,800 |
|
Special Revenue Funds: |
$2,537,300 |
|
GF/GP: |
$52,700 |
|
Total: |
$3,010,800[6] |
Program Description:
This appropriation funds four programs that assist businesses and communities with pollution prevention and waste reduction, including materials handling, recycling and composting.
Recommended Action:
This program should be eliminated. Well-intentioned though these programs are, the services they finance are widely available from private environmental firms. And to the extent that state government refrains from providing these nonessential services, environmental groups that lobby government to assume responsibility would have more incentive to focus their resources directly on voluntary and market-based waste reduction, recycling and composting. Savings: $3,010,800.
Program: Pollution prevention outreach
Appropriation: |
All from Special Revenue Funds: |
$300,000 |
|
Total: |
$300,000[7] |
Program Description:
This appropriation funds pollution prevention outreach, a program that pays for workshops, seminars and conferences on regulatory requirements and pollution prevention.
Recommended Action:
As noted above, there is no shortage of private-sector professionals competing to provide these services. This line item should be eliminated. Savings: $300,000.
Program: Pollution prevention local grants
Appropriation: |
All from Special Revenue Funds: |
$250,000 |
|
Total: |
$250,000 |
Program Description:
This appropriation funds the Pollution Prevention local grant, a grant for local toxic waste disposal education programs.
Recommended Action:
This grant program funds services that are already available through a range of other sources and should be eliminated. Savings: $250,000
Program: Radon grants
Appropriation: |
Federal Funds: |
$90,000 |
|
GF/GP: |
$45,000 |
|
Total: |
$135,000[9] |
Program Description:
This appropriation funds a grant that subsidizes public-education and local health-department radon programs.
Recommended Action:
This grant program should be eliminated. To the extent that these activities are necessary, the DEQ Radiological Division is adequately funded to provide them. Savings: $135,000.
Act No. 520, Public Acts of 2002, p. 1.
Act No. 520, p. 2.
Diane Katz., “The Clean Michigan Initiative: An Assessment,” Mackinac Center for Public Policy, October 2002.
Act No. 520, p. 5.
Act No. 520, p. 6.
Ibid.
Ibid.
Act. No. 520, p. 8.
Ibid.
Appropriations Summary |
Actual[1] |
Recommended |
Savings |
Interdepartmental Grants/Transfers |
$978,800 |
$978,800 |
$0 |
Federal Funds |
$2,754,318,050 |
$2,172,738,038 |
$581,580,012 |
General Funds/General Purpose |
$1,176,991,300 |
$831,427,157 |
$345,564,143 |
Special Revenue Funds |
$142,202,350 |
$137,587,585 |
$4,614,765 |
Gross Appropriation |
$4,074,490,500 |
$3,142,731,580 |
$931,758,920 |
The Family Independence Agency (FIA) is charged with three essential tasks: “to help meet the financial, medical, and social needs of individuals and families living in Michigan who are unable to provide for themselves; assist those who are capable of becoming self-sufficient through skill building, opportunity enhancement, and family-focused services; and help protect children and vulnerable adults from abuse, neglect, and exploitation.”[2]
The development of skills, the creation of opportunity and the achievement of family self-sufficiency are vital to Michigan’s economic development. A civil society protects against the abuse, neglect or exploitation of citizens of Michigan who are too young, or too mentally or physically disabled, to protect themselves. The question is not whether people who need help should receive it. They should. The question is: Who can best provide the help, and who bears the most responsibility to do so?
The Family Independence Agency provides womb-to-grave care. The FIA provides food, shelter and clothing. It funds adoptions, childcare, job training, reading programs, credit counseling, and budget counseling. It makes sure children are cared for before school and after school. It seeks to inspire children, prevent their pregnancy and gang involvement, and develop children’s leadership skills, their ability to manage anger, and their sense of self-sufficiency. It monitors the crime, aggression, and academic development of young people as well as their school attendance, drop-out rates, and their cultural and ethnic sensitivity.
The dollars spent are significant. The first $2.75 billion comes from the federal government. Another $1.1 billion comes from the state. Yet another $67 million comes from local governments.[3] All of this money comes from individuals, families, small businesses, and large corporations. All of these entities, banding together as communities, can and do meet enormous human welfare needs. When the state takes money from these groups it means that they have less money to improve their own lives, and those of their own families and neighbors. The resources taken by the state cannot be used by individuals and private institutions to create jobs or provide health insurance or be put to work developing new technology or medicines or be put away for a child’s college fund.
The FIA budget of $4,074,490,500 amounts to almost $410 per citizen[4] or $1,075 for every household in the state.[5] These numbers do not tell the whole story, because the mission of the FIA, as stated above, is not focused on every household in Michigan. The vast majority of citizens in Michigan have no need for the services provided by the FIA because they are providing for their own needs.
The FIA’s focus is primarily the poor, those who live below the poverty level as established by the federal government. With a budget of almost $4.1 billion, the FIA spends nearly $4,000 per man, woman and child below the poverty level[6] or $21,163 per poor household annually.[7]
Despite this spending, many in Michigan remain in poverty. Consider the following statewide statistics:
1 in 6 children are poor now. (poverty level is $17,650 for a family of 4.)
1 in 3 children will be poor at some point in their childhood.
1 in 15 lives at less than half the poverty level.
1 in 7 has no health insurance. [8]
It must be admitted that despite these enormous amounts of money, the system has not significantly alleviated poverty. Individuals and families are not rapidly moving out of poverty. The percentage of people who live under the federal level of poverty has remained stagnant for more than two decades despite ever-increasing amounts of spending. Governments at every level have spent more than $6 trillion fighting poverty with an endless array of government programs, yet U.S. poverty rates have generally remained where they were when President Lyndon Johnson predicted that such programs would ultimately produce “the Great Society” in 1964.
No amount of money can fulfill a community’s responsibility for the well-being of its neighborhoods, a neighborhood’s responsibility for the welfare of its families, a family’s responsibility for the welfare or its members, or each individual’s responsibility for his or her own personal welfare. What $6 trillion in government spending can do is displace the wealth that these and other mediating institutions such as religious and community service groups might otherwise use to help those less fortunate.
A strong economy, one unencumbered by unnecessary regulation and freed from extensive taxation, holds the greatest hope for the poor. Enterprise, initiative, and investment have done vastly more to alleviate human poverty than any poverty program. For much of human history, poverty was the norm. While it is troubling that of 9,938,444[9] citizens in the state, 1,021,605 live below the poverty level, it must be acknowledged that this is remarkable progress when compared even to the history of poverty in the United States.
The source of our progress has not been an extension of the role of the government but the growth of business and enterprise. As Don Mathews, economics professor at Brunswick College in Georgia has written, “By our current definition of poverty, 56 percent of families in the United States were poor in 1900. By 1947, even after the economic shocks of the Great Depression and World War II, the percentage of families in poverty had been reduced by more than one half, to 27 percent. By 1967, the percentage was halved again, to 13 percent. Notably, the decrease in poverty between 1900 and 1967 occurred before the advent of the greatly expanded welfare state. In other words, it was the free market, not government welfare, that caused the poverty rate to fall from 56 percent in 1900 to 13 percent in 1967.”[10] It is interesting that the last 25 years of ever-growing government budgets, greater regulations, and more extensive government involvement in social problems have not significantly dropped the rate of poverty. The level has remained around 10 percent for the past 35 years.
This does not mean that the state should play no role. There will always be some who will slip through the cracks of particular mediating institutions. There are those who require special help or have unique situations who have not yet been helped by families, neighbors, friends, churches and communities. There are some services state government provides because private or non-profit options do not yet exist in the absence of state programs.
The behemoth FIA cannot be brought to its proper proportions overnight and this review makes no claim to accomplish this. Rather, the most glaring examples of FIA overstepping must be addressed first. Over time, as civil society begins again to take its proper place and those who predict all manner of devastation are proved wrong by experience, more levels of bureaucracy can be dismantled and their responsibilities once again shouldered by those best qualified.
Program: Unclassified salaries
Appropriation: |
Federal Funds: |
$205,000 |
|
GF/GP: |
$300,800 |
|
Total: |
$505,800[11] |
Program: Salaries and wages
Appropriation: |
Federal Funds: |
$13,309,900 |
|
GF/GP: |
$9,410,200 |
|
Total: |
$22,720,100[12] |
Program Description:
This appropriation funds the unclassified salaries and the salaries and wages of the department. Executive Direction and the line item described as “Unclassified Positions” provide support services to the director of FIA. In other words, they are the director’s staff.
Recommended Action:
With the elimination of approximately 22.7 percent of the FIA budget comes the ability to downsize these appropriations commensurately, producing an additional savings of approximately $5,272,280. Savings: $5,272,280.
Program: Demonstration projects
Appropriation: |
Federal Funds: |
$6,181,500 |
|
Special Revenue Funds: |
$1,419,300 |
|
GF/GP: |
$1,337,300 |
|
Total: |
$8,938,100[13] |
Program Description:
This appropriation funds the demonstration projects of the department. The allocation for this program is distributed to a wide variety of new pilot programs being considered for continue use. Past programs have included:
Adopt-a-House, which funds the renovation and repair of homes occupied by low-income families in Grand Traverse County.
Independent Living Program, which counsels youths 16 years of age and older who are in foster care, or who have been in foster care, as they exit the child welfare services system.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
These private human welfare service providers could do a great deal more if government did not: a) crowd them out with programs of its own; b) take from citizens the very money (in taxes) they might otherwise contribute to these organizations; and c) engage in charity that requires nothing of the recipient.
Michigan’s government should step aside and allow charitable organizations to do the work they are most qualified to do. This would not only be of the greatest help to the poor; it also would revitalize community life by giving those more fortunate the opportunity to take personally the task of caring for their less fortunate neighbors. Savings: $8,938,100.
Program: Commission on disability concerns
Appropriation: |
Federal Funds: |
$573,100 |
|
Special Revenue Funds: |
$33,000 |
|
GF/GP: |
$350,800 |
|
Total: |
$956,900[14] |
Program Description:
This appropriation funds the commission on disability concerns. The commission staff provides training, advocacy, information and technical assistance on issues affecting individuals with disabilities.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
Many of the most effective organizations operate without government funds and often hire and train disabled people at their own expense, and without fanfare. Some nonprofits that provide services to the disabled raise most of their money privately.
For instance, Goodwill Industries of West Michigan, Inc., a workforce development agency with a network of not-for-profit businesses whose mission is to provide work opportunities and skill development for people with barriers to employment, raises most of its money privately. With headquarters in Muskegon, and serving an 11-county area including Lake, Manistee, Mason, Newaygo, and Oceana, along with portions of Montcalm, Osceola, Mecosta, Kent and Ottawa, Goodwill has a long, successful history of providing vocational rehabilitation and employment services for people with disabilities and other special needs. The agency was founded in 1950 to meet the employment needs of persons with disabilities. Throughout the decades, Goodwill has maintained its focus on mission while changing and improving services to meet the new and emerging needs of the diverse population it serves.[15] Savings: $956,900.
Program: Commission for the blind
Appropriation: |
Federal Funds: |
$13,576,500 |
|
Special Revenue Funds: |
$640,000 |
|
GF/GP: |
$3,819,800 |
|
Total: |
$18,036,300[16] |
Program Description:
The appropriation funds seven different programs: the commission for the blind, administration, rehabilitation, the business enterprise program, center for independent living, youth low vision, and client assistance program.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
The commission for the blind is focused primarily on only one handicap — poor vision/blindness. Nonprofits already exist to serve the blind population and would no doubt work to expand their services if the opportunity presented itself. Consider just one Michigan nonprofit as an example of a civil society institution that caters to some needs of the blind and their loved ones.
Livonia’s Seedlings Braille Books for Children is dedicated to increasing the opportunity for literacy among the blind. Seedlings provides high-quality, low-cost Braille books for blind children so that blind and sighted family members may read together. The books are for toddlers and preschoolers; and allow early exposure to words through the tactile page as sighted family members read the print. Print-and-Braille books are for beginning readers and allow parents’ input into the early reading process. Seedlings’ Braille-only books offer popular and classic literature. World Book Encyclopedia articles also are offered in Braille for students. Since 1984, Seedlings has placed over 109,000 braille books and articles into the hands of blind children throughout the United States and Canada. Seedlings has received the 1999-2000 Literacy Agency of the Year Award from Wayne County Reading Council and relies on approximately 50 active volunteers to translate, proofread and deliver its books. There is no reason to think that this organization, and others like it, couldn’t increase the roles they play, in the lives of Michigan’s sightless. Savings: $18,036,300.
Program: Employment/training support services
Appropriation: |
Federal Funds: |
$13,376,600 |
|
GF/GP: |
$1,475,100 |
|
Total: |
$14,851,700[17] |
Program Description:
This appropriation funds a program designed to assist Michigan’s jobless in their pursuit of employment.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
Relieving businesses and people of the taxes they pay to fund these programs will allow them to use their own resources to hire and train people instead of relying on government to do it. Furthermore, there are several non-profit organizations already providing such services. Savings: $14,851,700.
Program: Project zero
Appropriation: |
Federal Funds: |
$12,132,500 |
|
Total: |
$12,132,500[18] |
Program Description:
This appropriation funds Project Zero. This initiative is aimed at helping people progress from needing public assistance toward self-sufficiency. The goal of Project Zero is to reduce to “zero” the number of work-ready Family Independence Program (FIP, formerly AFDC) households without earned income. Stated another way, the goal of Project Zero is to assist all FIP families who are expected to work, earn income and achieve self-sufficiency. The funds are used to help identify and remove barriers to employment by providing job-search assistance, education and training programs, and employment-related supportive services such as transportation allowances, uniforms, tools, and automobile repairs.[19]
Recommended Action:
This program should be eliminated. The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
These private human welfare service providers could do a great deal more if government did not: a) crowd them out with programs of its own; b) take from citizens the very money (in taxes) they might otherwise contribute to these organizations; and c) engage in charity that requires nothing of the recipient.
Michigan’s government should step aside and allow charitable organizations to do the work they are most qualified to do. This would not only be of the greatest help to the poor; it also would revitalize community life by giving those more fortunate the opportunity to take personally the task of caring for their less fortunate neighbors. Savings: $12,132,500.
Program: Community services block grants
Appropriation: |
Federal Funds: |
$24,350,000 |
|
Total: |
$24,350,000[20] |
Program Description:
This appropriation funds the block grant program. This program seeks to assist low-income individuals and families to achieve self-sufficiency and to address the causes of poverty. Funding is provided for 9 major categories: employment, education, income management, housing, emergency services, nutrition, linkages with other programs, health, and self-sufficiency.[21] Some of the funding is used to lobby the federal government to increase its support for Michigan programs aimed at helping specialized groups.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so. See “recommended action,” above, for more details. Savings: $24,350,000.
Appropriation: |
Federal Funds: |
$12,705,900 |
|
Total: |
$12,705,900 [22] |
Program Description:
This appropriation funds the Refugee Assistance Program. This program helps refugees from other nations become self-sufficient via cash, medical assistance and job training, following their arrival in the United States. These services are delivered by private providers under contract with the state.[23]
Recommended Action
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
The United States and Michigan have benefited greatly from immigration, but that does not mean that those who choose to move to the Great Lakes State from other nations should be entitled to special benefits. An outreach of Lansing’s Christ Lutheran Church, the Refugee Development Center, helps refugees from around the world adjust to life in the United States. The Refugee Development Center provides orientation and education free of charge to refugees in mid-Michigan. It gives refugees an opportunity to learn to drive a car using a state-of-the-art driving simulator. It also provides the mid-Michigan community with cultural awareness education and events highlighting the cultures of different refugee groups. No government money is involved. [24] Lutheran Social Services and Catholic Social Services, while accepting some government money, both provide similar services and began doing so long before government redistributed tax dollars to them for this purpose. They could do so again. Savings: $12,705,900.
Program: Adoption subsidies
Appropriation: |
Federal Funds: |
$126,180,200 |
|
GF/GP: |
$78,772,600 |
|
Total: |
$204,952,800 [25] |
Program Description:
This appropriation funds the adoption subsidies program. The program is designed to help defray the cost of placing children with special needs, such as those with a handicap.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
No one doubts the value of adoption and the dedication of parents who choose to adopt needy children. But the weighty decision to adopt should not be distorted to any degree by public subsidies. Indeed, one of the reasons adoption is so expensive is due to government red tape in the first place. If state officials want to reduce the cost of adopting children they should work to remove regulatory barriers, not tax one parent to subsidize the adoption decisions of another. Private groups — employers, nonprofits, and individuals — help defray the costs of adoption voluntarily. Harvard University subsidizes adoption costs for its faculty and Adopt Share, a Christian Ministry, helps subsidize adoption costs with private grants. Other organizations give out low-interest loans. A simple Internet search is an effective way to find private, civil society institutions willing to subsidize the cost of adoptions. The China Care Foundation in Greenwich, Conn. specializes in helping Americans adopt Chinese orphans (with subsidies and other assistance) who risk a life of institutionalization simply because they were born with a cleft lip or clubfoot. [26] Savings: $204,952,800.
Program: Adoption support services
Appropriation: |
Federal Funds: |
$8,468,100 |
|
GF/GP: |
$6,100,500 |
|
Total: |
$14,568,600 [27] |
Program Description:
This appropriation funds adoption support services. This program helps families who have adopted a child from a state foster-care program to find and access support services. The program acts as a conduit of information for persons needing assistance in locating post-adoption support services within their community.[28]
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
While the desire to assist families who have adopted a child from a state foster care program is admirable, this allocation merely spends $14.5 million pointing people in the direction of agencies that can help them. Private efforts, even Internet searches, can do the same. There are also many support groups that are organized loosely and prefer to remain discreet to avoid state attention. Michael LaFaive, Mackinac Center for Public Policy director of fiscal policy, reports that some foster parents’ support groups want to avoid state involvement because many of the complaints they wish to air in the support group are critical of the state foster-care system. In addition, information on the Internet is readily available to adoptive parents.
Just one example, the Adoption Network at www.adoption.org, contains the following helpful information and it is free:
Savings: $14,568,600.
Program: Youth in transition
Appropriation: |
Federal Funds: |
$10,151,500 |
|
GF/GP: |
$3,202,000 |
|
Total: |
$13,353,500[29] |
Program Description:
This appropriation funds the youth in transition program. This program prepares eligible foster-care teens for living on their own. It provides educational support, job training, independent living skills training, self-esteem counseling, and other programs and support to equip teens with educational, vocational, and psychological skills to function as independent adults. The program also provides subsidized job placement, pre-employment training, and job training for delinquent youth.[30]
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
The J.O.Y. Youth Center in Grand Rapids offers its services free of charge to urban youth ages 8-16. J.O.Y. offers after school recreation and crafts, homework/tutoring, and other wholesome activities. It reaches inner-city children with religious, educational, leadership, and physical training. Typically, approximately 250 children participate each week. The 25 volunteers employ a holistic approach to educating children and instilling self-worth. Children are placed in leadership roles to foster decision-making and responsibility. The J.O.Y. program is not the only private program in Michigan to offer such services.
Another example is Urban Youth Ministries in Holland, which provides at-risk youth with educational and recreational opportunities. The organization uses field trips and athletic leagues to build relationships and minister to teenagers. Young people who show interest and potential are invited to participate in vocational courses that include woodworking, bicycle repair, upholstery, cooking, and photography. Savings: $13,353,500.
Program: Domestic violence prevention/treatment
Appropriation: |
Federal Funds: |
$11,299,400 |
|
GF/GP: |
$1,849,600 |
|
Total: |
$13,149,000 [31] |
Program Description:
This appropriation funds domestic violence prevention/treatment programs. Support services include transportation, information and referral, and advocacy in obtaining emergency health care, legal information, financial assistance, permanent housing, and childcare.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
While the state must play a law-enforcement role in protecting the most vulnerable of its citizens, there are many good religious and other non-profit organizations that have done excellent work in this area with trained staff, volunteers and donors who are committed to the work. For example, the Ramoth House in Grand Rapids offers battered women and their children a safe-house, crisis intervention, information and referrals, legal advocacy, housing and job assistance, transportation, child care, individual counseling and support groups. In Midland, the Shelter House does the same. Institutions such as this exist all over the state and could more easily expand, if government at all levels didn’t take 40 percent of peoples’ incomes to fund programs that are not superior to private-sector ones. Savings: $13,149,000.
Program: Teenage parent counseling
Appropriation: |
Federal Funds: |
$4,426,700 |
|
Total: |
$4,426,700 [32] |
Program Description:
This appropriation funds teenage parent counseling. This program provides supportive services, group home living, and prevention counseling for teenage parents.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need and will continue to do so.
Families, religious organizations, and non-profits can and do meet the needs of young mothers. For example, the Family Life Center in Allendale serves young women dealing with unplanned pregnancies. The Center offers a close family atmosphere by housing all of the women in one home, supervised by a live-in house parent. The young women are required to pay 30 percent of their income in rent, while another 10 percent is put into savings. They are provided a structured and caring environment to help them get on their feet. This is not the only city in Michigan to benefit from private charitable services for young mothers and mothers-to-be. Savings: $4,426,700.
Program: Black child and family institute
Appropriation: |
Federal Funds: |
$7,000 |
|
GF/GP: |
$93,000 |
|
Total: |
$100,000 [33] |
Program Description:
This appropriation funds the Black Child and Family Institute. This program provides health screening, physical exams, education, and tutoring for African-American families in the city of Lansing.
Recommended Action:
The state should eliminate this program. Michigan’s civil society — which includes individuals, nonprofits, religious organizations, businesses and fraternal organizations — works to help people in need