The MC: The Mackinac Center Blog

Addressing the Shortcomings of Probation and Parole

Swift and Sure sanctions probation program a success

In 2004, a Hawaiian circuit court judge named Steven Alm launched a new program to ensure that his court dealt fairly and promptly with people on probation. Judge Alm found a simple solution to the shortcomings of the probation program.

The problem was that the consequences for probation violations were ineffective. A probation violation drew only warnings, no actual discipline. And probation violations began piling up. Eventually frustrated probation agents, with left with no alternatives, sent probationers to court, where they would receive a disproportionately severe punishment. “What a crazy way to try to change anybody’s behavior,” said Judge Alm.

So he started a program called Hawaii’s Opportunity Probation with Enforcement, or HOPE. The system is simple: probationers who violate the rules are immediately disciplined (within 72 hours) — every time. If a probationer accepts responsibility for the violation instead of running away or lying about it, his consequences are less severe.

This formula seems to have worked: A 2009 evaluation of the program showed that HOPE probationers were half as likely to be arrested for new crimes or to have their probation revoked and were nearly 75 percent less likely to use illicit drugs. News of HOPE’s successful use of “swift and sure sanctioning” spread and similar programs began cropping up all over the country.

Michigan began testing its own version of HOPE in 2011, when the Department of Corrections and the State Court Administrative Office received funding for a pilot program. They implemented the Swift and Sure Sanctions Probation Program in Barry, Berrien, Isabella and Wayne counties, and, two years later, the Legislature passed the Probation Swift and Sure Sanctions Act, which provides funding to local governments that opt to implement the program.

An evaluation of the SSSPP participants in 2012 and 2013 revealed that they were 36 percent less likely to reoffend than participants in conventional probation programs and that these outcomes led to safer communities and lower corrections costs. Eighteen counties in Michigan are currently operating the SSSPP.

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Current proposed legislation would create a similar program for parolees. The Michigan Senate recently passed Senate Bill 932, which would establish the Parole Sanction Certainty Act, an attempt to reduce recidivism and parole violations by using clear and evidence-based sanctions for parole violators. It relies on many of Judge Alm’s insights for connecting behavior with consequences in order to help parolees become more accountable and responsible. The House should give this legislation serious consideration as it appears to hold promise for improving how Michigan handles parolees.

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School Choice Benefits All Students

DeGrow debates value of private schools on WalletHub

It may come as little surprise that private schools serve their students well, but thanks to the competition they create, private schools also consistently help raise the bar for area public schools as well.

That is one of the points made by Ben DeGrow, director of education policy at the Mackinac Center for Public Policy, in a recent online debate forum hosted by WalletHub. In his essay, DeGrow makes the case for expanding educational choice to better serve all students.

The debate focused on the merits of private schools, which DeGrow noted are often able to meet the needs of marginalized students while satisfying parents.

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Here in Michigan, schools are more expensive to operate and the scales are tipped heavily against private schools by a state constitution that denies the possibility of indirect government support. Nonetheless, a combination of corporate work partnerships and philanthropy help low-income families afford Detroit Cristo Rey High School, which increases students’ chances to graduate college and succeed in life.

DeGrow added that studies have found private school students are more likely to be more tolerant, volunteer, be politically engaged, stay out of trouble and graduate on time than students in public school.

Read DeGrow’s full argument on WalletHub.

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Economic Freedom and Well-Being Noticed by Top Official

Michigan's economic liberty is slowly improving

Michigan Attorney General Bill Schuette

How does economic liberty affect human well-being? Some of the most interesting recent research in economics and social science has looked at this question. The Fraser Institute, based in Canada, has been a leader in this field with its annual Economic Freedom of North America indexes. Policymakers whose primary goals are increased freedom and prosperity should take note.

A recent news agency interview with Michigan Attorney General Bill Schuette illustrated what “taking note” might look like. The attorney general seemed very aware of Michigan’s standing in the economic rankings. He discussed reducing government spending and tax burdens and how it would generate opportunity for the people of this state.

Schuette was straightforward about the causes and consequences of Michigan’s “lost decade” of the 2000s. He was aware and concerned about the flow of Michiganders who leave the state, taking their talents with them.

Schuette’s blunt policy talk could have flowed straight out of the Economic Freedom of North America. The work documents a thesis that is increasingly supported by economic research: Economic freedom is strongly associated with prosperity and other measures of human well-being.

The 2015 Fraser report ranked Michigan as 27th among the 50 states in economic liberty, a mediocre performance but an improvement from 2010, when the state ranked 40th. This matters to the future well-being of all residents, at least as measured by personal income and employment growth.

Fraser research finds a stunning 15-percentage-point gap between average per capita incomes in the 10 most free and the 10 least free states in North America (the U.S., Canada and Mexico). Specifically, per capita incomes in the most free states are 7 percent higher than the national average but 8 percent lower than the national average in the least free states.

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Think about that: How much difference would a 15 percent rise or fall in your family’s annual income make to your well-being and security?

That income gap is probably not a coincidence, and neither are migration changes — people choosing to pull up stakes and move to a faraway place. In 2015 the 10 freest states saw a net inflow of more than 289,000 people while the 10 least free lost nearly 125,000 people, according to U.S. Census figures.

The Internal Revenue Service is another source of migration data, based on changes in where individuals live when filing annual income tax returns. While most movers relocate within their state, a large number move to another state.

For example, for 2014, IRS records show a net decline of 7,400 tax returns filed in Wayne County, 1,300 fewer in Oakland County, but a decline of just 17 in Macomb County. The data do not include how many dependents were claimed in these returns, so the actual number of people leaving is much larger.

Where did everyone go?

The data show that 17,655 Michiganders from those three counties moved to Florida, 15,872 moved to Texas and 9,324 moved to Ohio.

The farther people move from long-time friends and family, the greater the human cost. Moving to Ohio is much less disruptive than moving hundreds or thousands of miles away. It takes a smaller “tug” to cause a Wayne County resident to move to Dayton than to Dallas.

What “gravitational forces” are large enough to tug a family far from its Michigan roots? There are many, including better weather. But a growing body of empirical evidence supports the commonsense notion, borne out of the American experience, that economic opportunity is the most powerful factor.

In the latest edition of the annual Economic Freedom of North America, Florida and Texas are tied for the third most free states. To his credit, Attorney General Schuette mentioned migration to these states (and others) in his interview.

He appears to want those opportunity seekers back in Michigan. To attract them, he suggests bold reforms, including tax cuts. The evidence presented in indexes like the EFNA suggests this would be a great place to start.

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DNC Email Leak Reveals Party’s Feelings on Unions

Op-ed published in The Detroit News

The latest dump of Democratic National Committee emails by WikiLeaks confirms the cozy relationship between the party and labor union leadership, but also reveals how some staffers truly feel about working with unions.

Mackinac Center adjunct scholar Jeremy Lott wrote about the email leak in an op-ed published by The Detroit News, explaining that the documents show party officials see value in unions when it comes to fighting Republicans. But, when it comes to actually working with unions, the DNC views them as more trouble than they’re worth.

The union-DNC alliance does impose a few constraints on the DNC, which staffers both mocked and worked to circumvent. DNC staffer Katja Greeson, for instance, complained about delays involved in getting new business cards printed.

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She explained to an irked communications director that sending work to union shops caused delays.

In one email, Greeson said, “Because we print union unfortunately it does take longer than a non-union solution would.”

The emails also reveal that, though the DNC pledges to only patronize unionized hotels, it waives this requirement for the sake of convenience.

In other emails, union leaders reached out to DNC staffers to find ways to help each other and share talking points.

Read the full op-ed in The Detroit News.

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July 29, 2016 MichiganVotes Weekly Roll Call Report

More ways for lawmakers to exhibit warm-and-fuzzy

The House and Senate are on a summer and primary election season break. Therefore, this report again explores methods lawmakers use to associate their names with certain interests or causes: bills to grant select nonprofits privileges including state income tax fundraising privileges and property tax breaks.

House Bill 5225: Authorize income tax checkoff for prostate awareness group
Introduced by Rep. Paul Muxlow (R), to allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund, which the state would give to a particular foundation named in the bill that does various things related to prostate cancer (PCUPS Foundation). Referred to committee, no further action at this time.


House Bill 4817: Authorize income tax checkoff for Junior Achievement organization
Introduced by Rep. Brandt Iden (R), to allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund to provide grants to local Junior Achievement organizations. Signed into law by Gov. Rick Snyder on June 15.


House Bill 4647: Authorize income tax checkoff for Boy Scouts
Introduced by Rep. Phil Potvin (R), to allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund to a state Scouts Fund. House Bill 4648 would convert an existing state Girl Scouts Fund into a Scouts Fund to benefit both organizations. Advanced from committee, pending before the full House.

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House Bill 4892: Authorize Lions Club income tax checkoff
Introduced by Rep. Wendell Byrd (D), to allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund to provide grants to the Lions Club organizations. Referred to committee, no further action at this time.


Senate Bill 428: Authorize Red Cross income tax checkoff
Introduced by Sen. Rick Jones (R), to allow an individual to choose to automatically contribute $5 or more from his or her state income tax refund to provide grants to the mid-Michigan Chapter of the American Red Cross. Signed into law by Gov. Rick Snyder on June 15, 2016.


Senate Bill 570 and House Bill 5109: Give tax break to some conservation clubs
Introduced by Sen. Peter MacGregor (R) and Rep. Jim Tedder (R), to exempt from property taxes conservation clubs that allow their facilities to be used for charitable purposes at least 55 days a year. SB 570 has been advanced from committee and is pending before the full Senate.


Senate Bill 732: Exempt Masons lodges from property tax
Introduced by Sen. Rick Jones (R), to allow local governments to exempt property owned by Masons' lodges from most property tax levies if the property is used for charitable purposes. Advanced from committee, pending before the full Senate.


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.

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A Quick Brief on the Housing Recovery in Michigan

Price of average home is approaching record levels

Housing prices in Michigan have recovered from the Great Recession. The price of the average home sale in Michigan in the first six months of 2016 was $147,323. This is the highest since 2006, and approaching record levels.

Other state housing value indicators are up as well. The federal Housing Finance Authority’s house price index says that Michigan’s values increased 33.6 percent from the first quarter of 2010 to the first quarter of 2016. That’s the seventh-highest increase among the states.

The growth of housing values is a good thing for homeowners and landlords. But it also is driving a recovery in home and apartment construction. In June of this year, there were 2,853 units issued permits, a level not seen in a decade. This is especially encouraging since it had dropped to very low levels during the recession and stayed there for years.

So far this year, 290 structures with five or more units were issued permits. At the trough of the recession, there were only 22 of these structures that received permits.

The recovery of the housing market in Michigan is another sign of broad-based economic growth.

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Calls to Expand Michigan’s Economic Development Programs Fall Short

New plans don't even claim to develop the economy

Is there taxpayer blood in the water? It’s hard not to ask because a number of groups in Michigan are circling for a bite. Venture capitalists have chewed up the money they received under the 21st Century Jobs Fund and are asking for more. Downtown Detroit investor Dan Gilbert is reportedly testing the waters for new forms of taxpayer support. And new legislation has been introduced to restart tax credits for research and development expenses.

The pitch for more economic development spending doesn’t even promise to add jobs and improve the economy. But taxpayers should ask, "What good is an economic development program that does not make the case that it will develop the economy?" Any growth pledged from these projects needs to be measured against the state’s overall actual performance. In other words, these programs need to demonstrate that they can by themselves have a meaningful and statistically relevant impact on Michigan’s economy.

When it comes to actual economic growth, Michigan is doing well. It leads the country in reducing its unemployment rate during this recovery; personal income is growing at top-tier levels. The state also is a leader in economic output growth. All of this comes at a time when the people in charge of our economic development agencies are saying that Michigan’s economy is uncompetitive and needs more taxpayer subsidies.

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During Michigan’s one-state recession, from 2000 to 2007, Michigan’s economic development programs were “competitive” even when its economy was not. Even this year, we are paying for the profligate promises the state made back then, and the job returns from that spending remain oversold. For example, only 2.3 percent of the deals from the Michigan Economic Growth Authority, the program that used to be the state’s main economic development tool, met or exceeded job estimates. Even then, this accounting does not measure all the economic costs of taking money from taxpayers and giving it away to select companies.

While the state government has cut back on new economic development spending, it still adds up to a nontrivial amount of state spending. The most recent budget contains $167.9 million in economic development programs — about $44 per household in Michigan — and that does not include the costs of administering them. Proponents of these new programs aren’t trying to argue that this money is ineffective and should be repurposed. They just want new programs and new favors.

It might be worth considering proposals for more economic development spending if their advocates could quantitatively show that they can actually influence the economic well-being of the state. And that it is the best possible use of state spending, given all other alternatives. And that the economy will be better off than if we just left the money in taxpayers’ own hands to spend or invest as they saw fit. And that all this can be demonstrated empirically. Instead, proponents seem to be arguing that Michigan ought to be as profligate as other states, without evidence that this profligacy is effective. Lawmakers should be skeptical.

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Michigan Crushes Korea in Corporate Welfare Handouts

Nearly $9 billion in crony-capitalism subsidies

The flag of South Korea. Image via Wikipedia.

The Wall Street Journal recently criticized government subsidies that South Korean politicians have granted to the country’s large industrial conglomerates, called “chaebols.” The newspaper’s editorial board wrote:

But the country’s chaebol conglomerates continue to receive massive state support across a range of industries. After a legislator extracted detailed figures from the government, the Hankyoreh newspaper calculated that in 2012 Seoul gave $673.9 million in direct subsidies to the chaebol. That doesn’t count low-interest loans, tax breaks and protection from competition, the main tools of Korea’s industrial policy.

Just $673.9 million? Pikers. Michigan has a population that is just one-fifth of South Korea’s in size. But in in the 2000s, and especially in 2009 and 2010, its politicians and subsidy-granting officials managed to approve nearly $9 billion in subsidies to corporate interests, including the Big 3 automakers.

Granted, the money redistributed from Michigan taxpayers will be given to companies over many years, not just one. But the sums are still large. This year, the state will write $1.031 billion in checks to corporations for “refundable” credits that exceed the amount of taxes they owe.

And this was just one of scores of corporate welfare giveaways approved by this state’s Legislature in the last decade. Thankfully, the pace has slowed (though not stopped) under the current administration, but the decisions of past years are still straining state budgets. They also raise obstacles to returning some of the state’s growing revenues to citizens in the form of a tax cut.

The Wall Street Journal concluded, “South Koreans have begun to question the political pull of the chaebol that allows them to carve out profitable niches at the expense of the consumer and taxpayer.”

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Michigan citizens should be asking the same question.

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Union Should Secure the Retirement of Their Members

New op-ed discusses Teamster pension problems in Washington Examiner

One of the largest union pension plans is on the brink of insolvency, employers are already on the hook and soon taxpayers could be stuck with the massive bill.

The Teamsters’ Central States Pension Fund is underfunded by at least $18 billion and could face complete insolvency in 10 years. The union’s president says taxpayers should bail the fund out. Mackinac Center’s F. Vincent Vernuccio, director of labor policy, and adjunct scholar Jeremy Lott wrote about the pending crisis this week in the Washington Examiner.

According to Vernuccio and Lott, the union should help meet the promises they made to their members of a secure retirement before they ask the taxpayers to bailout their failed pension system.

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Teamsters helped manage [their members’ pensions] to the brink of insolvency and are not without means. In 2014, the union claimed just under $256 million in assets and $183 million in income, without adding in the locals.

In pension plans like the Teamsters, “Every employer is responsible for the retirement of every worker in the plan — not just those that worked for them. This can make them liable for the costs of other companies' workers.” However, the union, which controls half of the board in the plan, does not have any financial responsibility.

Teamsters President James P. Hoffa, Jr. has suggested a $30 billion taxpayer bailout. Vernuccio and Lott wonder, “Perhaps the union would do a better job of looking after its workers' retirements if it had some skin in the game.”

Read the full op-ed in the Washington Examiner here.

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July 22, 2016 MichiganVotes Weekly Roll Call Report

Plates for me, plates for thee, plates for the man behind the tree

The House and Senate are on a summer and primary election season break. Therefore, this report explores one of the methods lawmakers use to associate their names with certain interests or causes: granting specialty license plate privileges.

House Bill 5586: Authorize autism specialty license plate; give profits to advocacy group

Introduced by Rep. Tom Barrett (R), to authorize a specialty license plate promoting autism awareness, and give the profits to a private advocacy organization. Referred to committee, no further action at this time.


Senate Bill 808: Authorize new specialty license plate; give profits to MADD

Introduced by Sen. Tonya Schuitmaker (R), to authorize a new specialty license plate, with the profits given to the Mothers Against Drunk Driving organization. Referred to committee, no further action at this time.

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House Bill 5349: Authorize a no-kill animal shelters license plate; give profits to advocacy group

Introduced by Rep. Charles Brunner (D), to authorize a specialty license plate promoting animal shelters that don’t use euthanasia, and give the profits to a private organization campaigning for this. Referred to committee, no further action at this time.


House Bill 5224: Authorize a prostate awareness license plate; give profits to advocacy group

Introduced by Rep. Paul Muxlow (R), to authorize a prostrate cancer awareness specialty license plate, and give the profits to a particular foundation named in the bill (PCUPS Foundation). Referred to committee, no further action at this time.


House Bill 5204: Authorize new specialty license plate; give profits to libraries

Introduced by Rep. Edward McBroom (R), to authorize a new libraries specialty license plate, with the profits delivered to public libraries. Referred to committee, no further action at this time.


House Bill 5108: Authorize a snowsports industry license plate; give profits to industry group

Introduced by Rep. Lee Chatfield (R), to authorize a snowsports industry specialty license plate, and give the profits to a trade and lobbyist organization called the Michigan Snowsports Industries Association. Referred to committee, no further action at this time.


House Bill 5083: Authorize new specialty license plate; give profits to Knights of Columbus

Introduced by Rep. Peter Lucido (R), to authorize a new Knights of Columbus specialty license plate, with the profits delivered to that organization. Referred to committee, no further action at this time.


House Bill 5082: Authorize new specialty license plate; give profits to Lions Club

Introduced by Rep. Peter Lucido (R), to authorize a Lions Club specialty license plate, with the net revenue going to the Lions Club. Referred to committee, no further action at this time.


House Bill 4932: Authorize a Kiwanis specialty license plate; give profits to Kiwanis Club

Introduced by Rep. Peter Lucido (R), to authorize a Kiwanis Club specialty license plate, with the net revenue going to the Kiwanis Club. Referred to committee, no further action at this time.


Senate Bill 367: Authorize a Thin Blue Line specialty license plate; give profits to advocacy group

Introduced by Sen. Mike Nofs (R), to authorize a Thin Blue Line specialty license plate, with the net revenue going to the “Thin Blue Line” organization, to be used solely to assist and support the families of injured or deceased law enforcement officers within the state. Reported from committee, pending before full Senate.


Senate Bill 308: Authorize black Greek letter organizations specialty license plate; give profits to United Negro College Fund

Introduced by Sen. Coleman Young, II (D), to authorize a specialty license plate honoring several African American fraternities and sororities specified in the bill, with the premium revenue going to the United Negro College Fund. Referred to committee, no further action at this time.


Senate Bill 264: Authorize wild turkey specialty license plate; give profits to advocacy group

Introduced by Sen. Wayne Schmidt (R), to authorize a specialty license plate honoring the National Wild Turkey Federation, with the premium revenue going to that organization. Referred to committee, no further action at this time.


Senate Bill 223 and House Bill 4360: Authorize Women’s Health license plate; use profits for government programs

Introduced by Sen. Hoon-Yung Hopgood (D) and Rep. Pam Faris (D), respectively, to require the Secretary of State to develop a Women’s Health license plate, with fees collected from its sale added to amounts spent for government programs to reduce unintended pregnancies, reduce child obesity, reduce sexually transmitted diseases and more. Referred to committee, no further action at this time.


House Bill 4348: Authorize Girl Scouts specialty license plate; give profits to Scouts

Introduced by Rep. Pam Faris (D), to authorize a specialty license plate honoring the Girl Scouts of America, with the premium revenue going to that organization. Referred to committee, no further action at this time.


Senate Bill 186: Authorize professional sports teams specialty license plates; give profits to team charities

Introduced by Sen. Jim Stamas (R), to authorize a specialty license plate for professional sports teams, including the Detroit Red Wings, Detroit Lions, Detroit Pistons, Detroit Tigers and the Michigan International Speedway. Proceeds from the sale of the license plates would go to charitable organizations created by these entities. Passed 35 to 1 in the Senate on May 26, 2015, referred to House committee.


Senate Bill 76: Authorize new specialty license plate; give profits to private organization

Introduced by Sen. Vincent Gregory (D), to authorize a new women veterans specialty license plate, and turn over the profits to the American Cancer Society. Referred to committee, no further action at this time.


House Bill 5447: Cap the number of fundraising specialty license plates

Introduced by Rep. Peter Pettalia (R), to cap the number of specialty fundraising license plates at 10, and revise details of this program including the amount an interest must pay to get this privilege, and how many of their plates must sell each year to keep it. Passed 90 to 18 in the House, referred to committee in the Senate.

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