Study Links Catholic Education and Self-Discipline

Families may have new tool to support private school choices

Detroit Cristo Rey

A new study suggests that Michigan's loss of Catholic schools may negatively affect students' opportunities to learn and demonstrate the important trait of self-control. Parents attracted to this benefit could find more support for their educational choices if a major constitutional obstacle, our state’s Blaine Amendment, were removed.

The Fordham Foundation’s report on “Self-Discipline and Catholic Schools” quantifies evidence that many may find unsurprising. Examining two large national data sets, researchers looked at the reported behaviors of thousands of students. Students in Catholic schools were less likely than students in public schools or other private schools to act out, disrupt class, lose their temper, fight or succumb to peer pressure.

While the study followed the standards of good research (controlling for many student characteristics), it could not establish a clear cause-and-effect relationship or definitively explain why Catholic schools have this positive effect. Still, the authors note that these schools have something educators elsewhere should consider. “If other schools took self-discipline as seriously as Catholic schools do,” they said, “they would likely have to spend less time, energy, and political capital on penalizing students for negative behaviors.”

Measuring how well a student is able to behave in class is not so clear-cut a task as tracking math and reading skills on standardized tests. Yet researchers in recent years have looked more at the positive relationship between non-cognitive skills (like self-discipline) and academic achievement, as well as the benefits those skills can have later in life in obtaining degrees and finding greater economic success.

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While Catholic schools certainly do not stand alone in effectively instilling self-discipline, they are well-known for it.

Fordham's findings may help to explain what we know about the track record of places like Detroit Cristo Rey High School, an innovative college prep school that exclusively serves students from low-income families. Every member of its first five graduating classes was accepted into college with about 85 percent of them enrolling.

The findings arrive at a time when private education options, and Catholic schools particularly, are dwindling. Nearly 20 percent fewer students attend Michigan nonpublic schools than a decade ago. In 2007, the Michigan Department of Education identified 274 Catholic schools serving 69,000 students — roughly half the total private school enrollment and nearly 4 percent of students in all schools statewide. Ten years later, 215 Catholic schools served 50,000 students, their enrollment dropping faster than that of public schools and other private schools. Just in the past week, The Detroit News reported on the recent closure of a longstanding Catholic girls high school in Livonia.

It would be one thing if the drop-off were simply due to families making different choices. But at least part of the explanation must lie with the economic recession that has limited many families’ ability to finance tuition. Many families have struggled to pay for private educational options, due to the state’s restrictive Blaine Amendment that has taken public support for private schooling off the table.

But a recent change may provide a hopeful ray of light. Under the new federal tax law, families may use 529 accounts to pay for K-12 as well as college tuition. Michigan’s attorney general is currently weighing whether and how these savings accounts and their tax advantages can be used under our state constitution. The financial benefits, which are not great at first, can accumulate over time.

If parents could use these plans for private school tuition, they would have a tool to help them embrace the benefits of Catholic education, or other types of private schooling.


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Senate Bill 941, Spend $100 million on job training and preparation programs: Passed 30 to 2 in the Senate

To spend $100 million on government job and career training programs, scholarships, program grants and more, which would be labeled a “Marshall plan for talent.” Senate Bill 942 would authorize paying for this with money borrowed against revenues from a 1998 state tobacco lawsuit settlement.

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House Bill 4106, Give high school graduation credits for internship or work: Passed 36 to 0 in the Senate

To require school districts to give 9th through 12th grade students credit toward state graduation requirements for spending at least four hours per week getting work experience or in an internship. The credit would equal that granted for taking one traditional course. Students would be excused from one class period of instructional time for each day they work or intern. This would not apply to students who are struggling in school as defined in the bill, and would be subject to various specified conditions.


House Bill 5687, Require resident alien’s drivers license to expire with visa: Passed 36 to 0 in the Senate

To require that a drivers license issued to a resident alien must have an expiration no later than the date on which the individual’s presence in the in the U.S. becomes unlawful.


House Bill 5606, Revise wine tasting restrictions: Passed 107 to 0 in the House

To amend the state's very detailed and prescriptive liquor control code to permit wineries that conduct tastings and sales at their production facility to also sell customers other nonalcoholic beverages, and require them to provide water.


House Bill 5810, Revise involuntary mental health treatment process: Passed 104 to 3 in the House

To revise a 2005 law that authorizes courts to order involuntary assisted outpatient mental health treatment for an individual with a serious mental illness in response to a petition (usually from family members) showing the individual represents a risk themselves or others. The bill would streamline petition approval requirements, place a 10 day deadline on court action, require a psychiatrist to supervise an assisted outpatient plan ordered by the court, and more.


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit www.MichiganVotes.org.


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Reverse Course on Restricting Medicaid Workers With Criminal Backgrounds

Michigan Department of Health and Human Services pushing new rules

The Michigan Department of Health and Human Services has proposed a policy that would severely limit people who have criminal backgrounds from working as Medicaid providers. It makes sense in many cases to impose restrictions, but blanket bans that are not narrowly tailored to protect consumers harm both ex-offenders and the economy.

Federal policy limits people with certain criminal backgrounds from working in medical fields, and state laws already prevent people with felony records from getting licensed as a doctor, nurse, dentist, chiropractor and more. But these new state rules go further — even restricting those with certain minor offenses from working.

The ban is not limited to professions commonly thought of as medical ones. It also includes many more job categories, including those not even licensed. These include support specialists, peer recovery coaches, parent support partners and home care providers. (Under the proposal, people with a criminal record could provide some home health care if the beneficiary signs a form acknowledging that the worker has a criminal record.) Nor are its restrictions limited to state jobs — agents of companies that perform these services would be required to observe the ban.

This move does not look good for a state whose governor and Legislature have said they are committed to workforce development and successful offender re-entry. While it makes sense to prevent some former offenders from working in private homes or medical professions, the state already has restrictions. People with criminal offenses related to providing health services or involving patient abuse, health care fraud and drug abuse are already banned from the field. The new policy expands those bans by adding crimes that are relatively minor or even completely unrelated to health care, like tax evasion.

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John Cooper, the policy director for the Citizens Alliance on Prisons and Public Spending, notes the change would impose significant damage. “This policy would not only cut off access to potentially life-changing jobs in health care for people with criminal histories, it would take those jobs away from the many people that already have such jobs and who are models of successful reentry into society — including current substance abuse counselors and peer coaches. Not only is this a needless change to Medicaid policy, it is likely to negatively impact public safety by taking away the livelihoods of numerous current providers (and their agents).”

That’s correct. The best way to keep people from returning to a life of crime is for them to have access to a regular job.

The state does allow for a review process where individuals can claim this restriction imposes undue hardship and show the state why they should be allowed to work. But that option only happens after someone is excluded from a job. The person is then kept that way until reinstated. This sort of disruption can have devastating collateral consequences on a person's life.

There are thousands of crimes on the books in Michigan and tens of thousands more criminally enforceable administrative regulations at the state and federal level. Some estimates, in fact, conclude that 1 in 3 Americans have a criminal record. Policies such as the newly proposed ban would turn a criminal justice issue into a workforce development problem.

Blanket bans that exclude large segments of the labor force from important fields like medical and related professions are bad for consumers and bad for offenders. If Michigan wants to make strides both on offender reintegration and workforce development, we must show a statewide commitment to ensuring that jobs are only put out of reach for people who truly should not have them.


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Getting More College Grads Won’t Improve State Prosperity

Many factors play into an area's income growth

Writing for MLive, Michigan Economic Center director John Austin argues for a number of policies that don’t work the way he says they will. Perhaps his most fundamental problem is his belief that getting more Michigan residents college degrees will improve state incomes. “Look at high income states in the nation — and the higher education attainment levels that drive that dynamic,” he writes.

The numbers may work out for individuals — people with college degrees tend to have higher incomes — but it doesn’t follow that increasing a state’s educational attainment improves average incomes.

This may sound like a paradox, but the numbers back it up. Increases in the share of state residents with a college degree are unconnected to income growth. Here is a scatter plot that covers the growth in the proportion of a state’s adult population with a bachelor’s degree or higher and its per-capita personal income growth over a 10-year period. Each state is a dot. If getting more graduates improved growth, the dots would converge around a line that rises to the right hand corner of the chart. But there is no connection.

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Oil boom state North Dakota, with its exceptionally large growth in income, stands out. Without it, there still seems to be no connection between grads and growth.

In his recent book, economist Bryan Caplan explains why there may not be a connection between graduates and state economic growth. He argues that most of the value that students receive from college is not through attaining valuable skills that are rewarded in the marketplace, but rather through signaling to future employers that they will be good workers. That may be a valuable signal for an individual, but not something that increases overall productivity. Signaling to employers that you’re going to reliably show up on the job, conform to workplace culture and be a diligent worker can provide a personal benefit, but it doesn’t pull a state into prosperity.

There is a lot that goes into an area’s prosperity. Getting more of your residents a college degree is far less important than Mr. Austin says.


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Why Michigan Should Repeal Prevailing Wage

Law benefits big companies at the expense of taxpayers

If Michigan lawmakers want to increase competition and reduce costs for taxpayers, they should remove the arbitrary and archaic prevailing wage.

Michigan’s prevailing wage law — which mandates a wage for laborers working on certain government projects — is one of the most stringent in the nation. The standard sets absurd price levels for government work, leaving taxpayers on the hook for higher bills. The prevailing wage costs taxpayers hundreds of millions of dollars annually and benefits large companies, which are in a better position to absorb the higher costs that smaller companies cannot afford.

Jarrett Skorup, director of marketing and communications at the Mackinac Center, explained the argument against prevailing wage in an interview on WDET 101.9 FM:

Nobody when they’re doing their own private work starts out saying ‘I’m going to pay at least this amount.’ They go out, they evaluate the quality of the work, they determine their budget for the project, and they go from there.

Lawmakers are expected to vote soon on whether to eliminate this law, allowing school boards, universities and local government to accept bids on projects the same way as private sector businesses.

Prevailing wage removes the ability for taxpayer funded construction projects to have a competitively low price, harming taxpayers and small businesses. Scrapping the prevailing wage will save money and allow it to be allocated elsewhere.

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Listen to the full interview here.


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Senate Bill 123, Establish minimum clearance when passing bicycles: Passed 36 to 1 in the Senate

To require drivers who are passing a bicyclist to their right that is going the same direction to stay at least three feet to the left. Also, to explicitly allow passing a bicycle in a no passing zone if there is enough room to make it safe to do so. Senate Bill 170 establishes the same rules for drivers passing a bicycle to the left of the vehicle.

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Senate Bill 653, Create environmental permit appeal panel: Passed 58 to 50 in the House

To create a state environmental permit appeal panel comprised of certain officials and representatives of specified interests including business and environmentalist organizations. A permit applicant aggrieved by permit denial could appeal to the panel, which would have the authority to revise or reject state environmental regulators' decision or conditions of a permit.


House Bill 6043, Require report to state of disclosures on prospective school employees: Passed 88 to 21 in the House

To expand a law that requires individuals who apply for a school job to sign a document that authorizes the applicant’s current or former employers to disclose any unprofessional conduct to the school. The bill would require the school to report to the Department of Education any information obtained this way about sex or other crimes involving a minor, or inappropriate conduct involving a minor. This would also apply if a school receives similar information about a current employee. The department would be required to keep these reports for six years.


Senate Bill 871, Extend statute of limitations criminal sexual conduct crimes: Passed 108 to 1 in the House

To extend the statute of limitations on prosecuting second and third degree criminal sexual conduct offenses in which the victim is a minor to 15 years after the offense is committed, or the alleged victim’s 28th birthday. In cases where an unknown offender is later identified by DNA evidence the statute of limitations would extend 15 years after the identification.


Senate Bill 872, Extend statute of limitations on criminal sexual conduct suits: Passed 99 to 10 in the House

To extend the statute of limitations to 10 years on filing civil lawsuits related to criminal sexual conduct offenses, or if the victim was a minor, until the individual turns 28 years of age. This would be retroactive for cases going back to 1997 that match the profile of offenses committed by convicted MSU sports doctor Larry Nassar, except a victim would have to file a suit within three months of the bill becoming law.


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit www.MichiganVotes.org.


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Bonfire of the Bureaucratic Vanities

MEDC should publicize its failures, too

Author Tom Wolfe died last week. He was a famous journalist and author of popular books, including “Bonfire of the Vanities,” which involved a high-flying, risk-taking Wall Street trader who was said to be “hemorrhaging money.” Michigan has its own class of risk-taking traders, but they are of a state-paid variety, operating programs that either mandate unusually risky investments with taxpayer money or undertake them outright.

They should not. Trying to pick winners and losers in the marketplace and invest taxpayer dollars in the winners is fraught with difficulty. Research tells us it is typically ineffective and expensive.

The Michigan Business Growth Fund Loan Participation Program is sold as another way to encourage business growth and diversify the economy. One official document says it is for “borrowers whose projected cash flows are considered speculative by the lender” [emphasis added]. In other words, if a private bank’s experts determine that a project is too risky, the state’s development agencies will back it up with taxpayer money.

In 2012, they did this with Cherry Growers Inc., a company that filed for bankruptcy last year. This loan (and four others) was duly announced by the Michigan Economic Development Corporation in a July press release bragging about all the good it will do. Come 2018, a report to the Legislature indicates Cherry Growers still owes $2.6 million in state-backed loans.

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“The Loan Participation Program will allow these companies to move forward and continue to grow, which in turn brings jobs and investment to our state,” then-MEDC president Michael Finney noted in a 2012 press release. The announcement also noted that Cherry Growers planned to add 250 full-time employees. It was not to be.

Remarkably, backing a loan that was too risky to get private financing wasn’t the only bit of investment risk-taking the state was willing to embrace. Officials, who should be good stewards of state resources, offered this deal up in the middle of one of the worst — nationally recognized — cherry crop failures in Michigan in decades. Other fruit crops suffered as well.

Either state officials didn’t know what everyone else seemed to know, or perhaps they didn’t care. In addition to recommending this loan, the MEDC also supported, in the same year, an additional $2.5 million grant for Cherry Growers through a different initiative, the Michigan Business Development Program.

How much of their $5.1 million will taxpayers get back? It may be too early to tell, but the company is being liquidated. The good news is that there may be a buyer for Cherry Grower’s property. Proceeds from that sale will help pay back creditors to some degree.

Lest the reader think Cherry Growers is a risk-taking one-off, a simple error, consider just a couple of other examples:

  • Spiech Farms was offered a $220,000 grant (on which it collected $100,000) even though its own application for subsidies clearly stated that two seasons of bad crops (2014 and 2015) were “leaving us in financial hardship.” The company filed for bankruptcy in 2017.

Despite the clear warning that the company was in financial hardship, state officials apparently still thought it was a good idea to give it money.

  • The solar company Suniva Inc. was a two-time loser. In 2011 the Snyder administration finished off a deal started during the Granholm administration that saw it get approved for two tax credits, one specifically for photovoltaic projects and the other for general economic development.

As part of 2011 deal, Suniva was supposed to build a $250 million facility in Saginaw Township. That investment never happened. But that didn’t stop the MEDC from recommending in 2014 the company for a $2.5 million grant. Suniva filed for bankruptcy in 2017. Last month, a judge granted permission to a creditor to retrieve and sell at auction its equipment, some of which is located at Suniva’s Saginaw plant, which appears to be sitting idle.

Time and again, state bureaucrats brag about the jobs and other benefits they say their handouts will deliver. Research shows these programs tend to be ineffective. If lawmakers can’t bring themselves to shut these programs down, at least they could impose a reality check on the bureaucracy that helps manage them.

That reality check could be a public relations bonfire of state jobs vanities. Each time one of its winners fails to perform as expected, the MEDC should issue a press release announcing as much — to the same media outlets to which it had previously bragged about those same companies. It could also then announce an estimate of lost taxpayer dollars.

Of course, the better way for government to disburse the money currently given away in handouts would be to spend it on roads, or enact across-the-board tax cuts. But short of eliminating the programs, lawmakers should prevent their corporate welfare minions from enjoying the blessings of braggadocio without the responsibility of publicly admitting corresponding failures.


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Detroit Charters Send More Graduates to College Than Peers Do

Longer-term outcomes back up test-score advantages for charter schools

Detroit charter schools rightly merit attention for helping students improve on math and reading tests. But they deliver other benefits that take longer to emerge. A new analysis says that a Detroit student who attends a charter high school is more likely to pursue higher education.

The Michigan Association of Public School Acade­mies, which represents charter schools in the state, observed that eight of the top 10 schools in Detroit for college enrollment were charter schools. The numbers come from the Michigan Department of Education, and can be easily accessed on an MLive searchable database.

Detroit Edison Public School Academy and Universal Academy topped the list, with 76 and 75 percent of graduates, respectively, pursuing a college education. Other notable examples of charter schools helping students beat the odds include Jalen Rose Leadership Academy, Cornerstone Health and Technology High School and the two University Prep high schools.

Unlike the charters on the list, the two schools run by the Detroit Public Schools Community District that finished in the city’s top 10 — Renaissance and Cass Tech — have selective standards for admission. But charter schools, like most other public schools, cannot discriminate when enrolling students. All eight of the charter schools on the list are as likely as neighboring district schools to serve low-income students — if not more so.

The fact that eight of the top 10 schools in Detroit are charter schools doesn’t necessarily indicate a direct cause and effect between attending a charter and enrolling in college. But more rigorous studies from Florida, one of charter schools and one of a tax-credit scholarship program for low-income students, both indicate that school choice boosts college enrollment.

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The Michigan Department of Education tracks postsecondary progress for each high school's graduates, starting with the Class of 2014. More evidence should be forthcoming in future years to show how many students who graduated from charter and district schools also completed two-year and four-year college degrees.

This evidence may begin to validate other findings about the long-term benefits of academic achievement. A recent Mackinac Center study estimated that each dollar spent by a Detroit charter school will yield about two-and-a-half times greater student lifetime earnings than a dollar spent by the Detroit school district. This finding results in part from the fact that the city's charter schools typically take in and spend about $5,000 less per student.

The increased college enrollment numbers follow other research that highlights the benefits Detroit students enjoy by enrolling in a charter school. A 2015 analysis from the Center for Research on Educational Outcomes at Stanford University found that each year in a charter gave students somewhere from a few weeks to several months of additional learning. CREDO cited charters in Detroit and three other cities as "essential examples of school-level and system-level commitments to quality that can serve as models to other communities."

While Detroit’s charter schools deserve congratulations for outperforming the local district, they should not be complacent. After all, that district has been rated lowest in academic achievement among the nation's major cities five straight times since 2009. The city needs more high schools achieving results like Detroit Edison and Universal academies to raise the bar further and give more students hopes of success.

As reported by MLive, Michigan charter schools outside the Motor City also distinguished themselves in sending last year's graduates to college. Ann Arbor's Central Academy, which serves a largely poor and immigrant student population, had the third-highest college enrollment rate in Michigan – the highest, in fact, outside of public schools that get to exclude students with a poor academic record. Other charters that had 2017 college enrollment rates above 80 percent were Arbor Prep, Washtenaw Technical Middle College Prep and International Academy of Flint.


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Senate Bill 826, Impose licensure on naturopathic physicians: Passed 24 to 11 in the Senate

To impose licensure and regulation on naturopathic physicians, with license fees, education requirements and more. The bill defines naturopathic medicine as “a system of practice that is based on the natural healing capacity of individuals.”


Senate Bill 655, Create domestic violence confidential address program: Passed 36 to 0 in the Senate

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To establish an address confidentiality program for victims of domestic violence crimes, with the state Attorney General giving a victim a “designated address” to which mail could be sent and then forwarded to the individual’s current location. This location would not be subject to disclosure under open records laws, and the person could also vote in elections using the designated address.


Senate Bill 969, Criminalize marijuana-infused alcohol: Passed 35 to 0 in the Senate

To make the use, possession and sale of marijuana-infused alcoholic drinks a misdemeanor crime.


House Bill 5775, Repeal obsolete lame horse law: Passed 99 to 9 in the House

To repeal a law dating back to 1913 that regulates the sale of a horse or mule which by reason of debility, disease, lameness or injury is permanently unfit for work.


Senate Bill 839, Revise mining permit amendment process: Passed 63 to 45 in the House

To establish streamlined procedures and timetables for a mining company getting revisions to restrictions in its state operating permit, with many exceptions. This would apply to determinations that a permit amendment does not “result in environmental impacts that are materially increased or different” from those specified in the original permit.


House Bill 5749, Allow truck platoons on highways: Passed 64 to 44 in the House

To exempt truck platoon operations from a traffic law requirement that trucks leave sufficient space between themselves for a vehicle to enter that space. "Platoon" is defined as vehicles "traveling in a unified manner at electronically coordinated speeds." Under current law truck drivers must leave “sufficient space between the vehicle and another truck so that an overtaking vehicle may enter and occupy the space without danger.”


House Bill 5750, Authorize surrendered newborn 'baby boxes': Passed 97 to 11 in the House

To revise a 2000 law that provides legal protections to a mother who anonymously surrenders a newborn to an emergency service provider, by allowing providers to install a “newborn safety device” similar in operation to a bank drive-up window or library book return slot, except it would be clean, safe, warm and designed to trigger a 911-call and a notice to staff within 30 seconds that there’s a baby inside.


House Bill 5638, Revise groundwater withdrawal permit regime: Passed 93 to 15 in the House

To revise a 2008 law that imposed a comprehensive regulatory regime and restrictions on industrial, commercial and agricultural groundwater uses that might have a negative impact. The bill would allow a more streamlined process for agricultural and other withdrawals that meet certain conditions, and establish deadlines for state officials to process permit requests. It would also repeal a requirement that landowners make public certain agricultural well use information.


House Bill 5325, Let local business subsidy entities tax residences: Passed 76 to 32 in the House

To expand the taxing power of local authorities created to deliver direct and indirect subsidies to business property owners in “principal shopping districts” and “business improvement districts,” by letting them impose property taxes styled as “special assessments” on home and residential property owners. Under current law residential property is excluded from the levies these entities are authorized to impose.


House Bill 5902, Allow residential "cross-subsidization" of solar cell maker's lower electric rates: Passed 77 to 31 in the House

To allow the indefinite continuation of special discounted electricity rates granted by Consumers Energy to the Hemlock Semiconductor subsidiary of Dow Corning, which under a 2010 law were exempted from a ban on cross-subsidization between residential and commercial/industrial customers (meaning residential customers pay more while Hemlock pays less). The styles the discount as a privilege potentially available to all industrial customers, but details that limit it to just this one company. Note: Hemlock makes photovoltaic solar cells, which were recently granted tariff protection against foreign competition by the Trump administration.


SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit www.MichiganVotes.org.


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Michigan’s Convoluted Electricity System Leads to Strife and Strain

Legislature considers a deal for Hemlock Semiconductor and Consumers Energy

Average Electric Prices in kilo-watt hours
Average total electricity prices in kilowatt-hours

Michigan businesses need affordable, reliable electricity to operate. But in our noncompetitive electricity system, almost all are forced to accept monopoly utility services. This system, sprinkled with a small amount of choice, means only a small number of companies are able to get lower-cost energy through an alternative supplier. The only other option for reducing costs is to try to get a special deal from one of the two large providers, Consumers or DTE.

There is currently acrimony over the proposed “Hemlock bill,” HB 5902, which would allow Hemlock Semiconductor to purchase electricity at rates far lower than other utility customers. This bill highlights the market-corrupting nature of Michigan’s over-regulated utility system. By heavily restricting choice in Michigan’s electricity market and by barring competitive pressures against monopoly utilities, state law forces most Michigan businesses to endure the services monopolies choose to offer.

There are good arguments on both sides of this bill. On the one hand, there is nothing wrong with Hemlock working out a deal for energy costs with its provider. That’s how private trade is supposed to work: Companies should be able to contract with whoever they want and reach a mutually beneficial deal. But Michigan’s utility market is, by law, set up as a system of regional monopolies. So, Consumers and Hemlock can’t legally contract for services in this manner. They need the Legislature to step in and broker the contract for them.

And HB 5902 provides that service. This bill uses the power of the Legislature to exempt Hemlock from the high monopoly utility rates that every other Michigan resident and business has to pay. As the MichiganVotes.org description of the bill states, the bill will keep residential utility rates higher to help provide lower electricity rates for Hemlock.

That reality makes a lot of people uncomfortable; some are even angry about it. But imagine the alternative. Michigan’s regulated utility structure means that Hemlock would overpay for its electricity and ultimately subsidize the cost of electricity for everyone else. After all, it is the single largest user of electricity in the state. For Hemlock, lower electricity rates are the difference between profit and loss. The company employs around 1,500 people and produces a product that is in high demand. It has a responsibility to investors, customers, the community and employees. In a free market system, the standard practice would be for a large, reliable customer like Hemlock to request, and easily get, much lower prices than other businesses. But it’s not operating in a market system.

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That’s the unfortunate part of this story, and Hemlock is one of the big losers. One option the company has is “self-service,” which would entail adding generating its own electricity to its primary business function.

But Hemlock is in business to produce polycrystalline silicon – a product used in the manufacture of electronics and solar panels – not electricity. So building electricity generation facilities would take its figurative eyes off the ball. And since Michigan limits who can compete against the monopoly utilities, Hemlock could not legally sell any excess power back to the grid. It would also be forbidden to build transmission lines to (or from) another energy-intensive business, such as Dow Chemical. As a result, everyone else would likely pay higher rates if Hemlock struck out on its own.

So, self-service is a possibility, but not the preferred option for Hemlock or other businesses. A far better option would be to allow the company the freedom to select the best provider of the services needed to produce and sell its products. But Michigan’s electricity laws forbid businesses from choosing any other option than their local monopoly utility. And when that monopoly — as monopolies are inclined to do — provides some of the most expensive and least reliable service in the region, businesses like Hemlock are forced into difficult choices.

That reality has brought us to where we are today, with Hemlock requesting more of the same rate reductions it has received in the past. The old rate reductions are nearing their expiration date. The high cost of monopoly-produced electricity in Michigan means the “renew the favors, or we might be forced to leave” meme is brought out, dusted off and held up in front of taxpayers, employees and legislators.

There’s an old quote, often erroneously attributed to Thomas Jefferson, that goes, “A government big enough to give you everything you want, is a government big enough to take away everything that you have.” That is especially true in this situation because when government has the power to grant special favors at the expense of the taxpayer, it becomes the conduit through which the health, wealth and welfare of the state’s businesses must pass. Deliberately limiting access options to an essential product and service like electricity only makes the situation worse by making government a key player in essential business transactions.

By limiting electricity choice, Michigan government encourages situations like what we are seeing today. If Hemlock doesn’t get its special treatment, the high costs of government-mandated, monopoly electricity service could push it into the red. The real solution to this situation isn’t special legislation that creates special deals for specific companies. The permanent solution is move our electricity markets back to customer choice and open and free electricity markets.


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