The Mackinac Center for Public Policy is pleased to announce that it’s adding two new members to its Board of Scholars. This group of academics and business leaders supports and contributes to the Center’s mission of improving the quality of life in Michigan through high-quality, public policy research that promotes the benefits of free markets, limited government and the rule of law.
Both of the new members, Tawni Ferrarini and Hugo Eyzaguirre, hail from the Upper Peninsula and teach economics at Northern Michigan University. They will be joining 26 other Board of Scholar members with current teaching positions at institutes of higher education, including Western Michigan University, Michigan State University, Hillsdale College, Northwood University, the University of Michigan Law School, Central Michigan University, and others.
Tawni Ferrarini currently serves as the Sam M. Cohodas Professor of Private Enterprise and the associate director of the Center for Economic Education and Entrepreneurship at NMU. She consults worldwide with organizations on matters related to economic growth and development through private enterprise, with a focus on K-16 economic education and financial literacy.
She was president of the National Association of Economic Educators in 2015 and has received numerous awards, including the 2012 Council on Economic Education’s Albert Beekhuis Center Award, the 2010 Michigan Council on Economic Education Educator’s Award, and the 2009 National Association of Economic Educator's Abbejean Kehler Technology Award. She was named a distinguished faculty member at Northern Michigan University in 2009. Among other work, she is a co-author of “Common Sense Economics: What Everyone Should Know About Wealth and Prosperity” and “Focus: Understanding Economics in U.S. History.”
Hugo Eyzaguirre is an associate professor of economics and director of the Center for Economic Education and Entrepreneurship at NMU. On campus, he is a member of the NMU Academic Senate, Committee on Internationalization, and the Educational Technological Resources and Policies Committee. Off campus, he chairs the International Committee, National Association of Economic Educators and is a member of the Association of Private Enterprise Education. He started the first center for economic education in Peru at the Universidad Peruana de Ciencias Aplicadas in Lima, Peru, where he taught and researched. He has also worked as a consultant and researcher, focusing on institutional economics and competition and regulatory issues, and has numerous publications on these topics.
Human well-being has increased dramatically over the last few decades
In 1980, a famous bet was made that has fascinated economists and environmentalists alike ever since. Paul Ehrlich is a biologist who became famous with a 1968 book called “The Population Bomb.” In it, he predicted imminent megadeath due to the world not having enough resources to meet human needs.
Julian Simon was a University of Illinois economist who went on to associate himself with the Cato Institute. He said, in essence, “Nonsense — people will figure out new ways to obtain needed resources.” Simon challenged Ehrlich to put his money where his mouth was in the form of a bet.
That bet is the starting point of a new essay by Michael Cox and Richard Alm. Called, “Onward and Upward! Bet on Capitalism — It Works,” the essay revisits the bet and adds a new wrinkle.
As Cox and Alm describe it, Simon believed that the world would enjoy “a future of abundance and higher living standards for more and more people, thanks to almost limitless potential of human ingenuity operating in a capitalist system.”
For evidence, he turned to the academic field of economics and challenged Ehrlich to put up or shut up by predicting the inflation-adjusted price of five industrial commodities over the following decade. To his credit, Ehrlich agreed.
The logic of the bet was simple: If Ehrlich were right, then commodities would become scarcer and more expensive in 10 years. But if Simon were right, they would become more abundant and cheaper. Simon even offered to let Ehrlich and his supporters choose the particular commodities. Ehrlich chose tungsten, chromium, nickel, copper and tin.
Simon won the bet outright. The real price of all five metals fell more than 50 percent during the term of the bet — even as the planet’s human population grew by 800 million souls.
But what if the terms of the wager had been different? What if different start and end dates had been used, for example? What if a different measure had been used to gauge changes in the value of the commodities? And what would have happened had 20 different metals, not just five, been included?
These are some of the questions Cox and Alm explore, starting with the unit of measurement. They converted the commodity cost data into units of human labor. That is, how many hours did the average worker have to work to earn enough to buy some of this stuff?
Then the authors looked at different time periods and more substances. On the original 10-year, five-metal bet, Simon won outright. They note, however, if the original bet were extended, Ehrlich would have won in 2007 and 2011 as prices leapt. Even then, however, the increase would have been only measured in inflation-adjusted dollars. If measured in the number of hours worked to buy a unit of metal, the five-metal basket was always priced lower than it was in the first year of the bet.
Cox and Alm also investigated the full period from 1980 to 2015. It turns out that Simon wouldn’t have won just the original 10-year bet — he would have won the five-metals bet in every year from 1980 to 2015. That is, in any given year, the average worker would have had to work fewer hours to get the same amount of stuff.
Next, the authors expanded the review to a basket of 20 metals. They found that the “work-hour prices of the 20 metals fell nearly 50 percent from 1980 to 2015.”
Of course, people don’t generally shop for a pound of aluminum or a ton of steel. What happened to prices of other goods over this period?
When Cox and Alm looked at the work-hour prices of 15 foods and other popular items, such as housing, clothing and transportation, they found one item that had not gone down in price since 1980 — apples. The rest all saw real work-hour prices drop by 50 percent or more.
Other consumer products, such as cellphones and home entertainment systems, not only saw work-hour price declines but dramatic increases in quality, too.
The lesson is that there are good reasons to be optimistic. Human well-being has reached heights unimagined just 30 years ago (except by Julian Simon). It’s an inspiring story, and the “Onward and Upward” report does a good job of communicating that.
The election could mean a different future for electricity
While most of the world was following election results, another key issue that will heavily affect Michiganders was moving in the state Legislature. Regulations covering energy and electricity choice have been ramping up there, but national events should put a halt to Michigan Republicans fast-tracking this issue.
The election of Donald Trump as the next president of the United States and the GOP maintaining control of the U.S. House and Senate means the key reason for pushing forward with Senate Bill 437, a bill that will revise utility regulations in Michigan, has effectively gone away.
One primary reason supporters of SB 437 give for it is “system reliability.” They explain that the need to address alleged shortfalls in Michigan’s electricity supply effectively forces their hands. However, that argument is based largely on the existence of federal regulations, such as the Clean Power Plan and the Mercury and Air Toxics Standard, which have mandated an artificial timeline for closing existing coal plants.
With the presidential election now decided, the regulatory mandates to close those plants will likely die, or at the very least significantly change. Given these changes, we should recognize there is now no pressing need to impose bills like SB 437 onto the population of Michigan.
Simply put, it’s time for people who are pushing for their passage to stop.
President-elect Trump spoke on these federal regulations at the Economic Club of New York in September:
One of the keys to unlocking growth is scaling back years of disastrous regulations, unilaterally imposed by out-of-control bureaucrats. Regulations have grown into a massive job-killing industry. And the regulation industry is one business that I will absolutely put to an end, day one. … I propose a moratorium on new federal regulations that are not compelled by Congress or public safety, and I will eliminate all needless and job-killing regulations now on the books — and there are plenty of them. This includes eliminating some of our most intrusive regulations, like the Waters of the U.S. rule. It also means scrapping the EPA’s so-called Clean Power Plan, which the government itself estimates will cost $7.2 billion a year. This Obama-Clinton directive will shut down most, if not all, coal-powered electricity plants — all over the country, they’re shutting down.
Most of the country had been operating on the notion that, if she were elected, Hillary Clinton would continue, or even ramp up, the actions of President Barack Obama in the realm of environmental regulation. A Clinton administration was expected to encourage the EPA to double down on the Clean Power Plan.
A Clinton administration was also expected to nominate — at a minimum — one Supreme Court justice. That nomination would have fundamentally shifted the balance of the court, with significant policy implications. For example, in February, the high court instituted a stay on the Clean Power Plan on a 5-4 vote and then sent the case back to the U.S. Court of Appeals for the D.C. Circuit for reconsideration.
It was expected, then, that when the Supreme Court took up the Clean Power Plan again, the regulation would find a far more friendly reception than it had before. This provided a boost to the legislative changes being considered in Michigan. But the election of Donald Trump changes the expectations for the makeup of the Supreme Court, and with it, the court’s expected response to the Clean Power Plan.
In Michigan, there are eight coal-fueled power plants, representing approximately 2.2 gigawatts of installed capacity, that have been targeted for closure by 2025. Energy industry experts, operating under pre-2016 election assumptions, had predicted that parts of the state would experience an electricity shortage in the coming years.
But, in a post-2016 election world, those eight plants could be maintained and upgraded to meet that need, while giving us much needed time to add new capacity for generating electricity.
Supporters of the Senate-passed bill as it has evolved have argued that doing nothing is not an option. There has also been a great deal of work done and a great deal of money spent on this legislation. But the voters of Michigan and the country made a clear statement on Nov. 8, and new policies will govern the development and use of energy.
Things are very different in this post-election world. It’s time to go back to the drawing board with a new plan that uses Michigan’s variety of energy sources to the benefit of citizens.
Amid everything else that happened last night, one result was an unexpected victory for public policy prudence and humility with the defeat of the 20-year millage proposal to fund mass transit expansion in Wayne, Oakland, Macomb and Washtenaw counties.
The plan put forth by the RTA of Southeastern Michigan was deeply flawed. Among other problems, it included incredible assumptions about state and federal funding levels that neither state nor federal transportation authorities would endorse. Oakland County’s deputy executive did the math and found that the plan got its tax revenue assumptions wrong by more than $500 million, while adding to the highest property tax burdens in the nation (Detroit) and state (Wayne County). Additionally, it was promoted in part through untruthful advertising that referenced nonexistent cuts to services for people with disabilities.
The entire mess was sold, as so much bad policy is, through promises of economic development. The plan’s advocates played their traditional game of “but for,” imagining companies that would have created jobs in Detroit, but for a lack of reliable transit options. Left unanswered was the question of which companies would have subjected themselves to what is arguably the worst tax and regulatory structure in terms of burden and complexity of any city in the nation … if only the buses were better.
Whether the voters’ message was received was unclear last night as the vote unfolded. “We’ll have to understand where the problems were, if it does fail, and do some reassessment and I’ll need to speak to my board and talk to our operatives to see why if it does go down where the problems were and what will we need to do differently,” RTA CEO Michael Ford told The Detroit News. “I’m not really prepared to get to that level until I know for sure. I thought it would be close, so I’m not totally surprised.”
At least one pro-RTA regional leader seems to have accepted the implications of yesterday’s vote. In an email to his members this morning, Detroit Regional Chamber CEO Sandy Baruah said, “To say we’re disappointed is an understatement. However, we respect the will of the voters and will continue to seek solutions to connect our region and provide mobility to those without access to personal vehicles.”
This is an appropriate starting point for discussions about the future of transit in the region. With the grand transit master plan dead on the side of the road and with a two-year waiting period before any future millage could be placed in front of voters, Metro Detroit’s leaders should focus on incremental and achievable improvements to transit services for the people who depend on them.
Improved coordination between the suburban SMART and city DDOT bus systems — rolled out to showcase the RTA’s value in advance of the vote — is a good starting point. Another might be to redirect the tens of millions of dollars that the Michigan Economic Development Corporation is planning to spend on subsidizing automaker R&D toward encouragement of advanced alternatives to fixed-route public transit. While it would be better if the state weren’t to spend that money at all, it’s at least an plausible purpose of government to help create solutions to a societal need such as transportation for people dependent on public services.
Worker freedom continues to be a winning issue at the state level. Candidates who supported right-to-work were widely successful, and this creates promise for more gains for labor reform in upcoming months and years.
Three states — Missouri, Kentucky and New Hampshire — will have legislatures and governors who support passing right-to-work legislation and possibly other related labor reforms.
Opponents of right-to-work in West Virginia failed to make any gains in that state’s Legislature that would be necessary to repeal their new worker freedom laws. While an effort to provide constitutional protections for existing right-to-work statutes failed in Virginia, similar protections passed in Alabama by a more than a two-to-one margin. A ballot measure in South Dakota that would have effectively repealed right-to-work went down to a massive defeat, with 80 percent opposed.
Additionally, the victory of Donald Trump and retention of the U.S. Senate by a Republican majority will have implications for labor reform at the federal level, especially when it comes to a future U.S. Supreme Court. A constitutionalist appointment could break the existing deadlock on the question raised in Friedrichs v. California Teachers Association of whether forced unionism of public sector workers violates their free speech rights.
Here’s a breakdown of the results we were watching Tuesday night:
Right-to-work passed in the Legislature in 2015 but was vetoed by term-limited Gov. Jay Nixon. Republican Eric Greiten won the gubernatorial election last night, meaning right-to-work is likely and other labor reforms are possible.
Republicans took control of the Kentucky House, so right-to-work and other labor reforms are likely.
New Hampshire has attempted to pass right-to-work several times. In 2011, the Legislature passed the bill but it was vetoed by the governor. Republican gubernatorial candidate Chis Sununu won the election last night, and since he is a public supporter of right-to-work, labor reform is likely.
West Virginia became the 26th right-to-work state earlier this year. Bill Cole, a main supporter of the bill, failed to advance from the Senate to the governor’s office, losing to Jim Justice. But another backer of right-to-work, Senate Majority Leader Mitch Carmichael, was re-elected to the Senate. Republicans maintained a majority in the House but their margin dropped by a seat, to 63-38. They gained four seats in the Senate, giving the party a 22-12 advantage. Right-to-work is protected and other reforms are possible.
An amendment on the ballot to enshrine right-to-work rights in the state constitution failed, gaining only 47 percent of the vote. The status quo of workers having statutory right-to-work freedoms will be maintained.
Alabamians also voted on a constitutional amendment. The amendment won 70 percent of the vote and workers’ rights are now protected by the Alabama Constitution.
I-1501 was an initiative pushed by unions to keep groups like the Freedom Foundation from contacting home health care workers to inform them of their rights to leave the SEIU. The measure succeeded by a vote of 72 percent to 28 percent, which will mean that it will be harder for home health care workers to learn about their rights.
U.S. Supreme Court
The election of Donald Trump as president and retention of control of the U.S. Senate by Republicans means there may be justices appointed who will uphold workers’ rights. Specifically, a new case similar to Friedrichs vs. California Teachers Association may be heard in the next few years to break the tie that resulted from the death of Justice Antonin Scalia.
The Illinois case of Janus vs. AFSCME brought by the Liberty Justice Center is similar to Friedrichs in that it argues that virtually everything done by public sector unions involves political speech, therefore public employees have a First Amendment right not to be forced to support that speech. If president-elect Trump appoints a justice who will uphold the First Amendment and this case reaches the high court, right-to-work may come to public employees in every state across the country.
Unfair to force taxpayers to subsidize the recreation of others
A Nov. 8 Kent County ballot proposal would impose an annual $9.2 million property tax to subsidize the Grand Rapids Public Museum and the John Ball Zoo. Voters may not realize that the proposal also distributes new tax revenue to other government entities, too.
Kent County’s “animals and artifacts” have already been subsidized by taxpayers and officials want more, even though the museum already has an endowment fund worth nearly $40 million. While the ballot question is being sold as a way to support these cultural institutions, some of the tax hike will go to “local authorities for authorized purposes.”
This is wasteful. Recreation and entertainment facilities should be paid for by those who use them. Forcing people with no interest in zoos, museums, symphonies and sports to subsidize the recreation of those who do is unfair. Maybe zoo and museum proponents don’t share the tastes of motocross, bowling or boxing fans, but that doesn’t justify taking dollars from them to subsidize the tax-hikers’ pet interests and projects.
Moreover, as much as $414,000 from this tax increase will go each year to provide subsidies and indirect benefits to local special interests. The money will be distributed by the Downtown Development Authorities of 10 Kent County municipalities; the Brownfield Redevelopment Authorities of another six; the Monroe North Tax Increment Financing Authority and the Grand Rapids SmartZone Local Development Finance Authority.
If Americans have learned anything from the past eight years, it’s that the political class stinks at picking economic winners and losers. This tax hike will continue that.
Very few of the people who will foot the bill for this tax hike will see any benefit from it. It’s expensive, unfair, and will most likely hurt the region’s economy.
Some key votes of the 2015-16 Legislature
The Legislature did not meet this week, so the Roll Call Report continues its review of key votes from the 2015-2016 session.
Senate Bill 434, Authorize highway drug testing pilot program: Passed 28 to 10 in the Senate on January 20, 2016
To authorize a one year pilot program in five counties for roadside drug testing, to determine whether drivers are operating vehicles while under the influence of a controlled substance (marijuana in particular) by means of “oral fluid analysis” (saliva test). After the first year the State Police could continue the pilot programs in other counties.
Senate Bill 434, Authorize highway drug testing pilot program: Passed 70 to 37 in the House on June 9, 2016
The House vote on the bill described above.
Senate Bill 501, Require alien drivers have visa or passport while driving: Passed 37 to 0 in the Senate on February 4, 2016
To require resident aliens who drive a vehicle in Michigan to have both a valid drivers license issued by their native land and a passport or valid visa. Current law only requires a valid drivers license. (A legal alien can also get a Michigan drivers license.)
Senate Bill 501, Require alien drivers have visa or passport while driving: Passed 90 to 18 in the House on May 12, 2016
The House vote on the bill described above.
Senate Bill 302, Ban nude entertainment in bars: Passed 27 to 10 in the Senate on February 10, 2016
To ban fully nude performers at topless bars, or bars showing videos that depict this. This relates to a 2007 federal appeals court ruling that struck down Michigan’s previous law banning fully nude performers in bars, holding it was a violation of the First Amendment. The House has not voted on this bill.
House Bill 5219, Permit local tax hike electioneering: Passed 60 to 46 in the House on February 23, 2016
To allow local government and school district communications to reference property tax hike measures they place on the ballot in taxpayer-funded communications during the 60 days before the election. This repeals a ban on these communications within 60 days of an election. The Senate has not voted on this bill
House Bill 5070, "Push back" against Obama NLRB franchise unionization rule: Passed 59 to 47 in the House on December 16, 2015
To establish that under state occupational safety and health regulations, the actual owner of a business franchise rather than the franchisor is considered the sole employer of the local company's workers. This is part of a package of bills responding to a 2015 action by National Labor Relations Board appointees to make it easier to unionize fast-food franchises by declaring the franchisor is the employer.
House Bill 5070, "Push back" against Obama NLRB franchise unionization rule: Passed 26 to 11 in the Senate on February 11, 2016
The Senate vote on the bill described above.
House Bill 4578, Authorize school recreation taxes: Passed 108 to 0 in the House on April 19, 2016
To add school districts to a law that lets several local governments organize a recreational authority with the power to levy up to one-mill of property tax for swimming pools, recreation centers, public auditoriums, public conference centers and parks. The law is silent on whether the recreational facilities could be school facilities if the bill becomes law, but does require them to be open to the public.
House Bill 4578, Authorize school recreation taxes: Passed 37 to 0 in the Senate on May 31, 2016
The Senate vote on the bill described above.
Senate Bill 564, Criminalize selling aborted fetuses or body parts: Passed 26 to 10 in the Senate on April 27, 2016
To make it a crime to receive a financial benefit or any type of compensation for transferring or selling an embryo, fetus or neonate, including organs, tissues or cells, if this was obtained as the result of an elective abortion. The House has not voted on this bill.
House Bill 4962, End "tried as an adult" for some serious juvenile offenses: Passed 90 to 19 in the House on April 28, 2016
To no longer automatically prosecute and sentence 17 year olds charged with serious crimes as if they were an adult. The Senate has not voted on this bill.
House Bill 4138, Authorize presumptive parole: Passed 67 to 39 in the House on October 1, 2015
To require that parole be granted to prisoners who have served their minimum time if the person has a high probability under a "validated risk assessment instrument" of not being a risk to public safety, and also meets other criteria specified in the bill and current law, subject to a number of restrictions and exceptions. The Senate has not voted on this bill.
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 http://www.MichiganVotes.org.
Changes could save money and improve outcomes
Reforms to Michigan’s $2 billion criminal justice system may still be on the agenda for the short amount of time left in this legislative session. The Michigan Senate passed a wide-ranging criminal justice reform package in May, and the House passed several more targeted proposals over the last year. And Gov. Snyder has said this issue is a top priority.
The following is a summary of some of the most important elements of a 21-bill package passed by the Senate. They include some solid reforms that would improve Michigan’s current criminal justice system.
Probation and Parole Reforms
The proposed changes are meant to provide accountability for offenders who have been paroled. Generally, better outcomes are achieved when parolees face consistent penalties for violating the terms of their parole. Michigan successfully implemented this principle with an intensive probation program, and one of the Senate bills would establish a similar program for parole.
The bills also include a proposal that would limit the jail time that parolees could face for minor parole violations, such as missing a meeting with a parole officer. The reasoning is that jail and prison beds are expensive, and cutting parolees off from jobs and re-entry services defeats the rehabilitative goals of parole.
Related bills offer incentives to parole and probation departments that reduce the number of offenders who re-enter prison and provides financial grants to companies and business owners who hire parolees or probationers. Another measure would allow well-behaved probationers to get off probation sooner.
In Michigan, about half of the people in the criminal justice system are parole or probation violators — well above the national average of 30 percent. The system is clearly underperforming, to the detriment of public safety and cost efficiency.
The Senate Fiscal Agency estimates an “indeterminate” fiscal impact from these proposals, but they would likely save taxpayer money. Parole supervision costs the state an average of $5,260 per parolee annually, and while some of these changes may push that cost up slightly, it still is only a fraction of the cost of incarceration. In other words, if these programs improve probation and parole programs, they are likely to save the state money.
Improved Data Collection
The Senate package would create the Data Collection and Management Act, which aims to help policymakers and the public to better evaluate corrections practices and costs. The state’s current data collections practices are disorganized, at best, and nonexistent, at worst. Although the judiciary, prosecutors, Department of Corrections and Michigan State Police all keep records, these departments do not share information with each other. Some data are not readily available to the public. Moreover, there is no unified state program for gathering and evaluating data about crimes, recidivism or corrections programs and facilities, leaving Michiganders at somewhat of a loss as to how to improve public safety and save money.
Parts of the Senate package creates new reporting requirements, which would compel the collection of various types of recidivism data and would make parole boards report the reasons for parole denials.
Funds have been appropriated for the implementation of the proposed data collection requirements, although other state departments may incur costs associated with these reforms. It is hard to imagine, however, a better use for those dollars than to gather the data needed to evaluate and improve a system that is costing the state billions annually.
With the general election fast approaching, it is expected that the Legislature will address these and the other Senate proposals late in this legislative session. These reforms deserve serious consideration as there are many positive reforms included in this proposed package of bills from the Michigan Senate.
Proposed reforms to juvenile sentencing, prisoner parole time and judicial power
In 2003, Michigan made national headlines by passing several dramatic criminal justice reforms, including repealing mandatory minimum sentences for drug offenses. Thirteen years later, three significant measures are before the current Legislature, and they have re-ignited the debate about corrections practices.
The Michigan House passed bills relating to juvenile sentencing, the parole of prisoners and the power of judges. The bills have been pending before Senate committees for months.
The juvenile justice package (House Bill 4947 et seq) would raise the age of criminal responsibility to 18, meaning that 17-year-olds, the current minimum age for trying someone as an adult, would no longer be automatically tried, sentenced and housed as adults. Although prosecutors would still be able to charge them as adults in cases of serious crimes, such as rape or armed robbery, most 17-year-olds would have their cases adjudicated in the juvenile system.
Juveniles are tried in the family court division of circuit court, so passing the bills would mean transferring those cases from district court to circuit courts. Last year, district courts handled the cases of more than 17,500 17-year-olds. The House Fiscal Agency estimates the average circuit court caseload would increase by about 26 percent, although it projects that more than a dozen counties will see increases in excess of 40 percent.
The bills would also mean that 17-year-old offenders become wards of the state rather than inmates, and the costs of their housing and treatment would be borne by the Department of Health and Human Services, rather than the Department of Corrections. While this would represent a savings to Michigan’s massive corrections budget, costs at the county level would increase because 17-year-old offenders would become eligible for services and treatments reserved for juveniles.
Michigan is one of seven states where the criminal age of majority is younger than 18.
House Bill 4138 would authorize a measure known as “presumptive parole,” or “safe and smart parole.” The bill would require that parole be granted to prisoners who have served their minimum time and have no worse than an average re-offending risk profile. In other words, the parole board would have to show a “substantial and compelling” reason to deny parole to prisoners who have served their minimum sentence. The measure passed the House in October 2015 with backing from some civil liberty groups and over the objections of some prosecutors.
The House Fiscal Agency and Senate Fiscal Agency project that the measure would result in a cost savings to the state. The bill would not apply to inmates presently serving time, but the Department of Corrections estimates that it would eventually reduce the prison population by 3,600 and save the state $82 million.
The current average annual cost of imprisoning an offender is $35,000. The cost of supervising a parolee is $5,260, not including the costs of re-entry services. The bill does not impact minimum sentence lengths imposed by judges.
Successor judge veto
Under current law, a parole-eligible prisoner serving a long sentence who files for review by the parole board may have his request vetoed by the judge who sentenced him or the successor of this sentencing judge. A veto means that the prisoner’s parole will be denied for another five years. House Bill 5273 would change the process so that only the original sentencing judge may veto a parole review (although successor judges would still be allowed to weigh in on the case).
The measure would offer limited cost savings to local governments and an indeterminate one to the state. If the bill results in more inmates being paroled, the savings to the Department of Corrections would be about $3,764 per offender per year.
The House bills represent a more focused effort than the wide-ranging 21-bill criminal justice package the Senate passed in May. But both efforts could mean big changes to Michigan’s criminal justice system. These proposals draw much-needed attention to Michigan’s very expensive corrections system.
Other Research does not validate MEDC’s secretive, no-bid contractor
In the past year, we have worked to produce a scholarly, readable and transparent study about state subsidized tourism promotion. Our goal was to measure statistically — and with publicly available data — any impact that the state’s highly touted Pure Michigan program has had on Michigan taxpayers. We found a negative one.
The state and its no-bid consultant, Longwoods International, come to the opposite conclusion. They claim Pure Michigan produces huge returns to taxpayer investments in the form of new tax revenue. The problem is neither party will explain with any precision how their figure is derived. When challenged about such claims, both the MEDC and Longwoods have pointed to other people’s research that allegedly confirms that Longwoods’ secretive technique is valid. The conclusions of that research, however, are questionable.
In a previous publication, we examined the first of these other evaluations, originally touted by then-vice president of the MEDC’s Travel Michigan office, George Zimmerman. Zimmerman now works for Longwoods. He pointed to a validation study from 2011 titled “Validation of Travel Michigan’s Rate of Return on Advertising Estimation System — A Case Study Approach” as evidence that claims made by Longwoods could be taken seriously. The contractor who was hired to perform this study was hired on a no-bid basis and is a former vice president of Longwoods. (See more on the validation study here.)
In correspondence with LaFaive, co-author of this essay, Longwoods’ founder and principle Bill Siegel also tried to validate his firm’s finding by pointing to other people’s work. He argued that after his firm had done an analysis of Colorado tourism subsidies, D.K. Shifflet and IHS Global Insight did their own analysis and both came to roughly the same conclusion. They agreed that a temporary end to tourism subsidies caused a large decline in tourism in Colorado. Longwoods reported a 30-percent drop in Colorado’s share of American tourism, and D.K. Shifflet appears to repeat that claim without attribution.
We question both reports’ conclusions. In our attempt to research the impact on tourism promotion subsidies on Colorado ourselves, we turned to publicly available data from the Bureau of Economic Analysis and the U.S. Travel Association. One of the authors (Hicks) constructed a regression analysis to measure the impact such spending would have on Colorado from 1974 through 2011 as measured by economic activity on the accommodations industry.
Hicks chose to examine the accommodations industry because it is the tourism-related sector most likely to see an impact from a rise in, or cut to, state promotion expenditures. The regression included an indicator (or “dummy”) variable in an attempt to measure any impact on Colorado’s suspension of tourism promotion subsidies from 1993 to 2000.
The result? We could not find any statistically significant impact to economic activity in Colorado’s accommodations industry from either the state’s promotional activities or the cessation of those activities. The regression’s output table is posted below.
We have written extensively about how the MEDC hired Longwoods with an expectation that the firm would produce a study about Pure Michigan that would help the agency justify its budget. We also reported that Longwoods, on one of its own web page titled “Budget Justification,” bragged about how it had once helped state tourism officials in Colorado justify state tourism promotion spending.
Pure Michigan uses state revenue to buy ads intended to benefit the state tourism industry and by extension, the state economy. Our most recent research shows the program fails even at that, with the average state hotel or motel industry gaining just $20,000 in economic activity for every additional $1 million spent on state promotion.
It appears the only real beneficiaries of this program are the government officials paid to run it and the consultants paid to defend it. Lawmakers and the people they represent should be more than skeptical of the MEDC’s efforts to defend its funding stream for Pure Michigan.
Scholars are often criticized for discussing their findings in heavily qualified terms and not speaking plainly. As an antidote we offer the following, based on our research: Pure Michigan is a bust. It should be shut down and its funding repurposed to core government functions such as schools, roads, public safety and pensions for public employees.