The costs of college seem to be spiraling upwards endlessly. Jenna Ashley Robinson, president of the James G. Martin Center for Academic Renewal, has a simple solution: Make schools responsible when their students default on their debt. I spoke with her about her idea for the Overton Window podcast.
Editor's Note: This piece first appeared in The Detroit News on November 22, 2021.
Some Michigan lawmakers want to hand out $300 million in taxpayer support to select businesses. States all over the country have tried to improve their economy with business subsidies, but with little success. They’re ineffective at creating jobs, expensive to the state budget and unfair to the businesses that don’t get them.
To hear politicians talk, you’d think that landing big business projects with taxpayer spending would make them Prometheus incarnate, bringing fire to man.
In a recent announcement that the state had approved a $250,000 payment toward a company’s expansion, Gov. Gretchen Whitmer pledged that she would “continue building up Michigan's economy and usher in a new era of prosperity together."
Flint Community Schools is on its third superintendent in two years. The previous superintendent abruptly resigned and is suing the district, amid in-fighting on the board. In short, the school system is a mess.
The district’s enrollment has fallen for decades and is now in a state of collapse. In 2002, about 21,000 students were enrolled, a number which dropped to about 11,500 in 2010. As of last year, the district was down to about 3,000 students, and it has been approved for more than $156 million in federal COVID relief money. That’s more than $50,000 per student, by far the most for any school in Michigan.
The U.S. House of Representatives has narrowly passed the “Build Back Better” plan. This is the latest of several federal spending bills that have added trillions of dollars in debt in just the past two years.
All Michigan congressional Democrats supported it: Reps. Dan Kildee, Elissa Slotkin, Andy Levin, Haley Stevens, Debbie Dingell, Rashida Tlaib and Brenda Lawrence.
The House and Senate are on break until Nov. 30, so rather than votes, this report describes some of the many “economic development” bills introduced this year to give selective subsidies and tax breaks to certain corporations and developers.Around 20 such bills have been introduced in 2021, with two already signed into law and several others passed by either the House or Senate (but not both). This report describes some of those that have not yet received a vote.
Leon Drolet had a very good 2006. That year, voters approved two initiatives to amend the state constitution, and he had worked on both. I spoke with him for the Overton Window podcast about his different roles in those campaigns.
The first initiative banned the use of race preferences in state government, including for university admissions. The other prohibited the use of eminent domain to take a person’s property for economic development purposes. And though both wound up on the ballot in 2006, he played very different roles in each.
The Canada-based Fraser Institute has released its annual Economic Freedom of North America report, and Michigan is ranked at an uninspiring 34th among the states for economic liberty. This reveals a relatively poor set of policy choices that limit opportunity for our citizens.
By Ben DeGrow
Adapt or falter: That may be the choice facing Michigan’s local K-12 public school systems in the wake of prolonged disruptions brought on by COVID. One area where schools and families need more flexibility is transportation.
As is the case in so many activities these days, the task of getting children to and from schools is afflicted by a tight labor market. Bus drivers, whether employed in-house or contracted through a private business, are widely reported to be in short supply. Fewer drivers are coming back to work after pandemic-induced school closures sidelined their services. The situation is so bad that the superintendent of one small mid-Michigan district earned a commercial driver’s license so he could pitch in on some bus routes.
State lawmakers are sitting on an extraordinary amount of cash right now. Between federal government transfers to the state budget — financed by the national debt — and unexpectedly strong state tax collections, policymakers have at least $11 billion sitting around. That’s the equivalent of 34% of all of the money the state collected from its taxes and fees prior to the COVID-19 pandemic.
Legislation being considered in Michigan would prevent municipalities from banning short-term rentals. Local government officials and the taxpayer-funded groups that represent them in Lansing are fighting against the bill. But their arguments are shallow and sometimes nonsensical.
By Jack McHugh
Senate Bill 671: Repeal requirement that corporate subsidy scheme benefit state economy: Passed 28 to 7 in the Senate
To revise 2017 “Good Jobs For Michigan” law that authorized the state to give ongoing cash subsidies to Detroit developer Dan Gilbert and potentially other business owners, by stripping-out provisions requiring that the transfer of state revenue “result in an overall positive fiscal impact to this state.” Unlike the other corporate and developer subsidy schemes enacted by the legislature in the name of “economic development,” this law’s revenue transfers appeared designed to incentivize existing businesses moving from other Michigan communities to Detroit, without regard for whether this had any positive impact on the state as a whole. The bill would also increase an annual cap on how much a subsidized company could get.
By Ben DeGrow
The recent gubernatorial election in Virginia should capture the attention of Michigan policymakers. A surprising victory by the Republican candidate was “powered by parents,” according to University of Virginia professor Brad Wilcox and American Enterprise Institute researcher Max Eden. Parents here are hoping for someone to champion their cause.
As lawmakers consider bills to spend more on selective business subsidy programs, they ought to question whether this is the right strategy. If they want to win the war for jobs, they should look to the states that have added the most jobs. That’s Utah and Idaho. They’ve added the most jobs over the past decade, and they’re the first states which now have more jobs than they did when the pandemic started.
By Jack McHugh
House Bill 5097: Ban "Critical Race Theory" curriculum in public schools: Passed 55 to 0 in the House
To prohibit public schools from teaching 'critical race theory." Specifically, the bill prohibits instructing children that because of their race or gender individuals comprising a racial or ethnic group or gender all act in certain ways, hold certain opinions, are born racist or sexist, bear collective guilt for historical wrongs, or regard race or gender as a better predictor of outcome than character, work ethic, or skills. Also, to ban teaching that the cultural norms or practices of a racial or ethnic group or gender are flawed and must be eliminated or changed to conform; that racism (or sexism) is inherent in individuals from a particular race or ethnic group (or gender); that a racial or ethnic group or gender is in need of deconstruction, elimination, or criticism; or that the actions of some individuals serve as an indictment against their race or gender. Democrats abstained from voting on the bill.
Policy advocates know a little bit more about some things than most people. One of those is that shipping from American port to American port is a highly regulated business, with restrictions that cause unintended harms. When I mentioned the policy — the Jones Act — to my friend Alisha, she wanted to know more. We spoke with Colin Grabow about it for the Overton Window podcast. He’s a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.
The Mackinac Center’s Business Subsidy Scorecard has been updated to include Public Act 93 of 2021, which authorizes one particular company to receive refundable tax credits beyond what it was eligible for. Introduced by Rep. Ryan Berman, R-Commerce Township, the law will allow the company to collect $12.8 million in further credits, which transfers from other taxpayers to the company when its credits exceed its tax obligations.
In an ongoing effort to reinstate a shuttered program providing handouts to large corporations, bill sponsors lifted about 90% of the text from an expired law known as “Good Jobs for Michigan” to create a new bill. The Good Jobs law itself contained language that was lifted directly from another previous program, the failed Michigan Economic Growth Authority, which offered up $14 billion in targeted tax relief during its life.
By Jason Hayes
Do you trust your electric utility to provide you with reliable and affordable energy this winter? You might, but you shouldn’t.
If you ask Michigan residents what they want from a utility, they will likely tell you two things: reliable service and reasonable rates. They want their lights and heat (or AC) to turn on when they need them, and they want to afford their monthly utility bill.
The University of Michigan Wolverines take on the Michigan State Spartans this weekend, and a large number of Michigan residents will take sides over which school they like most. State lawmakers take sides, too, and their preferences matter a lot to the schools' bottom lines. The universities are taxpayer-funded institutions, and lawmakers get to reward the schools they like most with more taxpayer dollars. Most residents may not know this, but our lawmakers favor the University of Michigan. By a lot.
Some generals strategize to win the last war rather than the next one. Some politicos fight over the last election rather than try to win the next. Both efforts are ill-advised, as circumstances change, and it’s better to prepare for an uncertain future rather than challenge the nonrepeatable past. Lawmakers fall into the same trap when they think about big business projects: They’re always trying to win a project that was already announced someplace else, whether it’s Amazon HQ2 or Foxconn or even the latest Ford electric vehicle plants.
State governments should find it tough to get into financial trouble. They have constitutional requirements to balance their budgets as well as restrictions on their debt. Yet a number of states have gotten into debt problems by promising to pay their employees pensions and not setting aside enough money to secure those promises. I spoke with Leonard Gilroy, vice president of the Reason Foundation and manager of its Pension Integrity Project, about how he has helped states prevent themselves from underfunding their pension systems and catch up on what they owe.
Michigan’s longstanding inability to compete with the Buckeyes on the college gridiron is no secret. Less well known is our state’s struggle to keep up with the educational opportunities Ohio offers to students and families. Thankfully, Lansing lawmakers have a new opportunity to dramatically shrink one of the gaps between the two states.
Editor's Note: This article was first published in The Hill on September 18.
Throughout the pandemic, politicians repeatedly have claimed the mantle of science for themselves, sometimes as a cudgel to wield against others. But if science is important, why do so many politicians ignore the economic one? President Biden consistently says he will “follow the science,” but the economic policies he wants for the country are, in the eyes of economic science, deeply harmful.
Editor's Note: This article was first published in The Detroit News on October 9, 2021.
A few years ago, the United Auto Workers wanted to build a retirement cottage on Black Lake for its recently retired president, Dennis Williams. It received two bids from union firms for the 3-bedroom, 3.5-bathroom, 1,885-square-foot home: one for $851,000 and another for $1.3 million.
