Gov. Rick Snyder and the
Legislature are on a roll. In six months they’ve made real progress toward
fixing Michigan. But it’s only a start. Whether they turn Michigan around or
just slow its decline will depend on whether they keep pressing hard, or declare
victory and coast.
Four accomplishments are especially
noteworthy. The state business tax was trimmed by about $600 million overall,
vastly simplified, and made fairer (by eliminating a constellation of corporate
welfare-like tax incentives). Emergency financial managers now have more
authority to keep unions from bankrupting schools and municipalities.
Gov. Snyder has asked school and municipal leaders to cut costs, but their hands will remain partially tied unless he delivers some of these collective bargaining changes.
Starting next year, taxpayers will
subsidize only 20 weeks of unemployment instead of 26 and thereby save about
$240 million annually. Lastly, the new state budget cuts spending
significantly, relies less on federal subsidies, and incentivizes schools and
municipalities to stop their overspending.
These accomplishments were neither
perfect nor sufficient. For instance, the tax and budget changes will raise
income taxes on many. No one’s taxes should be increasing while public
employees are still taking home $5.7 billion more in average benefits than
their private-sector counterparts.
Many Mackinac Center ideas have
already found their way into law this year. Here are some of them:
- Reduce business taxes to spur job creation.
- Eliminate corporate welfare-like tax gimmicks such as
film industry subsidies.
- Ask public school teachers to pay
part of their health insurance premiums.
- Set aside certain public-sector
union contracts to prevent insolvency.
- Encourage schools and
municipalities to seek competitive bids for services.
- Encourage schools to purchase less costly insurance than
the union-backed MESSA plan.
- Eliminate the archaic retail “item pricing law.”
- Seek competitive bids for certain prison-related
- Link state school aid and municipal
revenue sharing to local cost control.
- Begin the move toward sustainable public employee
One area in particular that needs
more work is public sector unionism. Public-sector unions invariably drive up
the cost of government. Public-sector unions also take a chunk of public
employee wages (in the form of union dues) and channel millions of dollars into
lobbying and politicking for bigger, more expensive government.
Unless the Legislature and Gov.
Snyder enact serious reforms to Michigan’s public-sector union law, we can
expect unions to continue soaking up tax dollars that are supposed to pay for
efficient, core government services.
Mackinac Center Director of Labor
Policy Paul Kersey recommends four basic reforms. Starting with the most
- Prohibit government collective bargaining. This was
FDR’s position on government unions and it is the law in several states.
- Permit collective bargaining only at the discretion of
local government officials. Negotiations should be win-win, or no deal.
- Initiate “open government employment,” where government
cannot fire a teacher or other worker who does not support a union or follow
- Institute other reforms such as suspending bargaining
and contracts during strikes or emergencies, prohibiting government from
collecting dues on behalf of unions and confining union negotiations to wages
Gov. Snyder has asked school and
municipal leaders to cut costs, but their hands will remain partially tied
unless he delivers some of these collective bargaining changes.
Public-sector unions push a
romantic vision of collective bargaining that plays well in Michigan. But they
are involved in underhanded schemes like roping tens of thousands of private
day care workers into a government union so they could siphon off millions of
tax dollars intended to care for low-income children. The Mackinac Center Legal
Foundation sued the state when the Granholm administration and unions set up
that deal, and Gov. Snyder was right to pull the plug on it in March.
Tax dollars spent by public
universities can also end up supporting union politics. In April, my colleagues
asked Wayne State University about its possible involvement in Wisconsin union
protests. Hours after making our concerns public, Wayne State quietly shut down
its labor studies website and stripped it of politically charged content.
Public sector unions enjoy special
legal privileges that drive costs up and efficiency down in government and
public schools. Gov. Snyder and the Legislature should end policies that favor
unions at the expense of taxpayers.
G. Lehman is president of the Mackinac Center for Public Policy, a research and
educational institute headquartered in Midland, Mich. Permission to reprint in whole or
in part is hereby granted, provided that the author and the Center are properly