Crime Shouldn’t Pay, but Requiring Reimbursement May Not Pay Off

Harsher penalties are not as effective at deterring crime as increasing the risk of getting caught

A law that takes effect next month adds a handful of new crimes to the list of offenses for which violators must reimburse the state or a local unit of government for expenses incurred responding to and prosecuting the crime. Such crimes as drunk driving and violating a restraining order have carried this requirement and now retail fraud, dealing in stolen goods and failure to appear in court will, too.

Sen. Goeff Hansen, R-Hart, the bill’s sponsor, issued a press release that said the law was created in response to rising rates of retail fraud at The Lakes Mall in Muskegon. It said also, “This law is a further deterrent to crime and will save money by reducing costs to the state and to local units of government.”

Requiring people who commit crimes of theft to make their victims whole makes sense. But allowing government agencies to recoup their costs from criminal defendants is a bad idea, and it might not even accomplish Hansen’s goal of deterring crime.

Although criminology is an imprecise science, the findings tend to conclude that the probability of getting caught is a better deterrent than the threat of a more severe punishment. This is one reason why the modern criminal justice reform movement has urged lawmakers to move away from “tough on crime” policies like mandatory minimum sentences.

And anecdotes seem to support the research: In Michigan, the prison population appears to fluctuate independently of the crime rate, suggesting that imposing long sentences didn’t have the desired effect on crime. Now prisons are full of people serving long sentences, and although crime is steadily decreasing, Michigan corrections spending has plateaued at about $2 billion.

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In keeping with research on the best deterrents, one clearly effective solution is increasing police presence in high-crime areas — not to pursue an aggressive, high-arrest crackdown on “bad” neighborhoods, but to discourage the kind of criminality that would necessitate arrests in the first place.

Policymakers should reconsider the idea of sticking criminal offenders with the bill for the costs associated with their arrest, trial and incarceration. For one thing, it creates perverse incentives for law enforcement officers when they know that when they arrest someone for certain types of crimes, they generate revenue for their employer. And these types of administrative expenses disproportionately effect low-income offenders, making their full rehabilitation and a successful reintegration into society more difficult.

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Illinois Takes Pension Advice From ‘The Simpsons’

Michigan has done a lot to avoid this fate

Illinois has promised $129 billion more to government workers than it has saved for their pensions. That’s over $10,000 for every man, woman and child in the Land of Lincoln. So the state has cooked up a scheme to pay down these costs.

The Wall Street Journal editorial page summarizes it this way:

Democrats in the state House have proposed issuing $107 billion in bonds to backfill the state’s pension funds, which are short $129 billion. Annual state pension payments are projected to increase to $20 billion in 2045 from $8.5 billion—not including interest on $17 billion in debt the state previously issued to pay for pensions.

At the request of state retirees, a University of Illinois math professor performed a crack analysis showing how the state could use interest-rate arbitrage to shave its pension costs. Under the professor’s math, the state could sell 27-year, fixed-rate taxable bonds and invest the proceeds into its pension funds. This would supposedly stabilize the state’s pension payments at $8.5 billion annually, save taxpayers $103 billion over three decades and increase the state retirement system’s funding level to 90% from 40%.

In other words, the state — which has the lowest-rated bonds of any state — wants to borrow at lower rates to pay down higher-interest pension debt.

It’s unlikely to work. Illinois tried this in 2003, but instead of making reforms, it simply skipped payments and increased spending and debt. Detroit did the same. It later defaulted.

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This type of scheme was featured once in an episode of “The Simpsons.”

Michigan has done a lot to avoid this fate, thanks to reforms that prevent long-term borrowing to pay short-term expenses. Lawmakers shifted state employees off the underfunded pension system in 1997 and recently did the same for most school employees. These moves have kept the state from promising benefits now and pushing the costs onto future residents.

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February 2, 2018 MichiganVotes weekly roll call report

House Bill 4787, Revise personal data details on ice shanties: Passed 38 to 0 in the Senate

To revise the requirement that ice fishing shanties must have the owner’s name and address affixed to each side, by allowing either the owner's drivers license number or fishing license number instead. Also, to allow the Department of Natural Resources to determine the date each year when shanties must be removed from the ice based on actual weather and ice conditions. Current law sets fixed removal dates.

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Who Voted "Yes" and Who Voted "No"

House Bill 4813, Increase animal euthanasia training: Passed 38 to 0 in the Senate

To increase and revise the training required by personnel at animal shelters and certain dealers that is related to animal tranquilizers and the use of sodium pentobarbital for euthanasia.

Who Voted "Yes" and Who Voted "No"

Senate Bill 660, Delay phase-in of chicken and livestock rules: Passed 32 to 5 in the Senate

To revise a 2009 law that imposed additional farm animal care regulations and fees on producers that would be phased-in over several years, by delaying enforcement of rules on egg-laying hens from April 1, 2020, to Oct. 12, 2025. The bill would also establish a legislative "finding" that rules against narrow chicken confinement are needed to protect consumers "from increased risk of food borne illness."

Who Voted "Yes" and Who Voted "No"

SOURCE:, 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

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Traverse City Continuing Push for Government-Run Internet

Similar efforts have failed in city after city

It’s Groundhog Day and Traverse City is closely imitating the plot of the movie of the same name by moving forward with a plan for a government-owned and -operated internet service provider. This despite the fact that similar attempts have failed time after time in other cities across the country.

According to the Traverse City Record-Eagle, the city’s public electricity provider is pushing forward with a $16 million plan to build out and run a fiber network. The utility board apparently believes that the government can offer better internet services than those already provided by the private sector.

The evidence shows otherwise. Studies from the Mercatus Center and the University of Pennsylvania show that virtually every time government-owned networks have been tried, they lose money and don’t meet their expectations, leaving taxpayers with a bill and little else.

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Traverse City’s plan is supported by government employees and local business and tech workers. The local chamber of commerce says there is “already a lot of interest” in the project. That’s what the promoters of government internet in Sun Prairie, Wisconsin, and Lake County, Minnesota, said too. These small Midwest cities lost money, and, after extending huge subsidies to the effort, were forced to abandon their networks.

Technology moves too fast for government. If Traverse City wants faster internet, it should explore options that get government out of the way and increase competition among private providers. Markets will sort out what people are willing to pay for these services without having to force taxpayers to foot some of the bill.

The Traverse City Light & Power utility, which has already put taxpayers on the hook for huge amounts of pension debt, is scheduled to discuss the plan this month.

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Couple Could Lose Their Home Through Civil Forfeiture

Under Michigan law, people with a criminal record are severely limited or banned from working in health care professions. But a package of bills recently taken up in the state House would help more ex-offenders rehabilitate themselves back into society by finding legal work.

House Bills 5450, 5451 and 5452 have been introduced by Reps. Klint Kesto, Jeff Noble and Curt VanderWall, respectively. They would shorten the time people are ineligible to work in a health-related field, if they’ve been convicted of certain misdemeanors and lower-level felonies. The bills would also eliminate laws that automatically ban people with certain felonies and other misdemeanors from working.

This would be a huge step in the right direction. While there is some justification for employers to consider the criminal background of potential employees, a blanket state ban on hiring ex-offenders is bad policy. Such a ban affects people like Laurence Reuben, who worked as a nurse in the state of New York for years but lost the ability to find employment after moving to Michigan.

Michigan has hundreds of laws that prevent people with a criminal record from working in licensed professions. The evidence shows that these laws cause higher unemployment and make people more likely to reoffend. These bills are a step in the right direction by giving ex-offenders a better chance at contributing positively to society and the economy.

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Snyder, New Report Pitch for More Education Dollars

Evidence lacking for any significant impact on achievement

Editor’s note: This article has been revised since its original publication to reflect the budget proposal put forth by Gov. Rick Snyder.

Twice this month, the drum has sounded for more dollars to fund Michigan’s public schools. As of now, we don’t know where the extra funds would come from, but there’s every reason to doubt more money will have any significant impact on student achievement.

The chief recommendation of a Jan. 17 report released by the School Finance Research Collaborative, a group representing businesses, foundations and public education interests, was to increase the state’s base funding amount to $9,590 per pupil. Days later, in his final State of the State address, Gov. Rick Snyder called for “the largest increase in the basic per pupil student foundation allowance in the last 15 years.” He followed it up with an official proposal.

Snyder’s funding proposal figures to be a lot less dramatic than the report’s recommended boost. This century’s largest effective annual boost to the basic foundation allowance was 8.3 percent in 2001. The next largest occurred in 2006, when the Michigan Legislature bumped it up by 3.4 percent.

In his budget proposal, the governor called for increasing the foundation allowance by $120-$240 per student, or $312 million in total. The lofty demands of the Collaborative's “adequacy study” make the governor’s proposal, wherever it might fall, look puny by comparison. The new adequacy study calls for a total of about $2.8 billion in additional K-12 funding requests. The lofty demands of the Collaborative's “adequacy study” make the governor’s proposal look puny by comparison. The new adequacy study calls for a total of about $2.8 billion in additional K-12 funding requests.

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For all its significance, the foundation allowance represents only one of many different pieces to the overall school funding puzzle. Considering all revenue sources, total Michigan K-12 funding reached its highest level ever at $14,108 per pupil in 2016.

Hopes are misplaced that raw funding increases will drive improvements from Michigan’s current 43rd ranking nationally in academic achievement. A 2016 Mackinac Center multiyear analysis found that spending levels had no impact on 27 out of 28 different test scores and other benchmarks. Only on the state’s 7th grade math test did results improve when a school’s spending increased, but even there the gains were small.

New sources of tax revenue would need to be tapped to meet the new adequacy study recommendations. Yet constrained by political and fiscal realities, the governor may pursue a different approach. Instead of raising taxes, the Legislature could shift money from noneducation items or from categorical grant programs in the School Aid budget.

To the extent that money can be redirected from these targeted or “categorical” programs and used instead to follow students to their choice of educational provider is a good thing. It creates incentives for schools to attend to what parents and students actually want rather than just operating a program the Legislature thinks is good for them.

Instead of looking for new tax dollars to bolster existing institutions, policymakers should steer this year’s education budget discussion toward financing students and making schools more directly accountable to parents to meet individual learning needs.

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Politicians Cannot Keep Up With Dynamic Economy

Subsidies for a handful, costs for everyone else

State lawmakers created new business subsidy programs last year. This new taxpayer spending will have little effect on the state economy and will not likely justify its costs. This is because politicians cannot keep up with the massive dynamic job loss and job creation that occurs outside of Lansing’s watch.

Michigan lost 199,000 jobs from April to June in 2017, according to data from the Bureau of Labor Statistics. It also added 215,000 jobs over the same period. State “economic developers,” meanwhile, offered some public money from the Michigan Business Development Program to companies. The companies pledged to create 1,779 jobs and will be rewarded with up to $11.8 million in taxpayer dollars. Even if all of those announced jobs turn into real jobs — and state administrators have a bad record of delivering on those promises — administrators would be able to replace less than 1 percent of the jobs lost.

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Lawmakers using residents’ tax dollars to deliver favors to select businesses is both unfair and ineffective. Instead, lawmakers should improve the business climate for everyone. That includes lowering barriers to entry by revisiting occupational licensing rules, lowering tax rates and saying “no” the next time a business, industry or other interest asks for favors.

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Come or Go, Amazon’s HQ Decision Means Little to Michigan Economy

It’s a magnet for agenda-driven interpretation though

Rock Ventures founder and chairman Dan Gilbert made a valid observation in response to Amazon’s decision to exclude Detroit and other Michigan bids from its short list of cities contending for its HQ2 project: “The fact is, nobody outside of Amazon knows exactly all of the factors that went into this complicated decision.”

Yet media voices are happy to tell us exactly what’s needed here to win a project like Amazon. Phil Power at Bridge Magazine says it’s more college preparation. Nancy Kaffer at the Detroit Free Press added more taxpayer-financed transit to the list. Charlie LeDuff at Deadline Detroit says less crime. Others point the finger at a nebulous inability to attract talent, whatever that means. Daniel Howes at The Detroit News agrees and says Detroit’s reputation for “decline and dysfunction” also contributed.

But Gilbert’s point is right: Only those on Amazon’s team really know. So this is weak evidence to support any individual’s favored policy agenda.

Amazon’s choice doesn’t really matter though: Despite all the hype, one company is not enough to change one state’s fortunes, or even those of whatever city lands the project. Sure, it’s a big project, but it’s still tiny compared to the regular ongoing job creation that is a routine part of the dynamic Michigan economy.

Even if Amazon’s pledge to create 50,000 jobs comes true, it would be just 23 percent of the new jobs created in Michigan every three months. And all those new jobs appear with no government officials offering to spend extraordinary amounts of tax dollars to subsidize them.

There are good reasons to want better schools, less crime or a good business climate. How to get them is always worth talking about.

But Amazon’s actions offer little guidance for how to help Michigan thrive. The state’s success does not hang on hype. Business decisions will instead be based on real data. The data is telling a good story right now. It could be better one, no doubt, but things are moving in the right direction already: Jobs are being created and incomes are rising in metro Detroit. With a strong economic backdrop and progress that has been made to improve public policy, this is likely to continue with or without flashy projects like a second Amazon headquarters.

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Senate Bill 749, Increase child care income tax credit: Passed 37 to 0 in the Senate

To establish that an individual is entitled to claim the same child care tax credit against Michigan income tax as the credit authorized by the 2017 federal tax reform law. This is a means-tested credit that is based on a percentage of child care expenses that are related to the taxpayer having a job (up to $6,000, or $3,000 if there is just one dependent). The credit would not be "refundable" (meaning the taxpayer would not get a check from the state for the amount the credit exceeded their income tax liability).

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Who Voted "Yes" and Who Voted "No"

Senate Bill 652, Subject new environmental rules to authoritative review: Passed 26 to 11 in the Senate

To create a state environmental rules review committee comprised of certain officials and representatives of specified interests, with the duty to oversee and make judgments on whether plans by the Department of Environmental Quality to impose new rules meet certain specified criteria including reasonableness, and to propose revisions if they do not. The committee would be empowered to stop the DEQ from imposing a rule that did not meet the criteria. Senate Bill 653 was also adopted, which creates a similar authoritative oversight process for DEQ permit decisions.

Who Voted "Yes" and Who Voted "No"

House Bill 5100, Exempt bike racks, tow balls, etc. from ban on obscuring license plate: Passed 104 to 2 in the House

To establish that removable bicycle racks, trailer hitches, tow balls or similar devices are not included in the definition of “foreign materials that obscure or partially obscure” vehicle license plates, which is a civil offense.

Who Voted "Yes" and Who Voted "No"

House Bill 5257, Make possession of ransomware a felony: Passed 103 to 3 in the House

To make it a crime punishable by up to three years in prison to possess ransomware software with malicious intent. The bill defines ransomware as “a computer or data contaminant, encryption, or lock” that can be placed or introduced without authorization into a computer or network, and that restricts access in a manner that enables the perpetrator “to demand payment of money or other consideration” to remove it.

Who Voted "Yes" and Who Voted "No"

House Bill 5422, Authorize “refundable” $100 senior income tax credit: Passed 100 to 6 in the House

To authorize a $100 refundable tax exemption against the state income tax for individuals aged 62 and above. “Refundable” means the state will send the individual a check for the amount that the credit exceeds his or her tax liability.

Who Voted "Yes" and Who Voted "No"

House Bill 5420, Increase personal exemption in state income tax: Passed 105 to 1 in the House

To increase the $4,000 personal exemption that is currently allowed under the Michigan state income tax. The bill would immediately increase it to $4,300 and then gradually to $4,800 in 2021. Taxpayers can claim a personal exemption for themselves, their spouse and each dependent, and these are subtracted from the amount of income that is subject to income tax. The Senate has passed a version that increases the exemption to $4,700 by 2020.

Who Voted "Yes" and Who Voted "No"

SOURCE:, 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

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Renewable Energy is Not Cheaper After All

Popular measurement of renewable energy's cost ignores its unpredictable nature

In her Jan. 21, 2018, critique of my Detroit News op-ed, “State Needs Sound Energy Regulations,” Liesl Clark, president of the Michigan Energy Innovation Business Council, attempted to justify keeping Michigan’s recently expanded renewable portfolio standard. Her critique misrepresented my basic claims and wrongly argued that renewable energy is competitive, yet still deserves special government favors to force people to choose it over other options.

My article called out renewable energy advocates who claim wind energy is an obvious, market-based energy choice. I argued that, if wind is as affordable as they claim, removing targeted subsidies and mandates should cause them no distress. Ostensibly, low-cost renewables sources would be built without protective government policies like the RPS.

Clark also argued that Michigan’s electric utilities are regulated monopolies and will, therefore, follow incentives, “which might encourage them to stick with fossil fuels.” So, “strong policies” must force them to “invest in the lowest cost energy for their customers.” But, if correct, she would be making a strong argument for expanding competition, and returning choice to Michigan’s electricity markets. Her words certainly do not justify forcing further expensive and market-distorting policies onto Michigan’s residents.

In truth, regulated utilities are primarily concerned with selling a product – electricity – to their customers at a government-approved rate that will bring a healthy return to their investors. So, Clark’s concerns notwithstanding, if renewable energy can provide electricity at a rate that will ensure a profit for utility investors, it will be built and used.

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But, short-term prospects for renewable energy in Michigan could soon be waning, as generous federal tax provisions and subsidies for renewable energy, like the production tax credit, are being phased out. And changes in federal tax incentives could make investing in renewables a much less attractive strategy for reducing corporate tax obligations. Pairing those challenges with the public’s increasingly pronounced distaste for living next to wind farms means arguments for building more renewable generation in Michigan are rapidly losing strength.

It is precisely those market and political signals that drive renewable advocates to push for special market carve-outs for wind and solar. With a 15 percent RPS in place, state law requires new wind and solar be built, period. Until that state mandate is met, the views of investors, markets, customers and Michigan’s residents really don’t matter.

Clark closes out her letter by referring to Lazard Investment Bank’s analysis of energy markets, and its preferred metric for measuring the relative costs of energy options, the LCOE (levelized cost of electricity). Of course, she claims that “the lowest-cost energy” just happens to be the sources she wants built – wind and solar. While Lazard’s metric has some uses, it is also widely recognized as a confusing, or incomplete, method of comparing renewable energy, an intermittent energy resource, with more predictable and reliable generation sources.

For example, a November 2017 Berkeley Labs study on the “Impacts of Variable Renewable Energy (VRE) on Bulk Power System Assets, Pricing, and Costs,” says that “comparing the LCOE of different technologies that provide varying services is misleading.” For example, you can’t use the same measure to weigh the value of a small natural gas turbine to a large nuclear facility, or renewable energy – a variable resource – to more reliable coal plants. Doing so gives the perception that they are able to provide the same service. The study goes on to explain that the more renewable generation facilities you build, the more it costs the system to make up for their variability, and the less value they provide to electricity markets.

To determine the real price of renewable energy, or its ability to replace nuclear or fossil fuels, you must account for the high costs imposed by its variable nature. One example is the cost of many new transmission lines that link distant renewable generation installations to the electrical grid. You also need to include the construction of “fast ramping” natural gas plants, battery storage units or pumped hydroelectric facilities that can come online quickly to supply electricity when variable renewables suddenly cut out, as when the wind stops blowing or the sun stops shining.

Instead of a mandate requiring electricity from renewable sources, state legislators should remove special favors, crony capitalist subsidies, protective market carve-outs and any other form of unique help to politically favored industries or market sectors.

Remove all of them – whether they are aimed at renewable energy, fossil fuels, nuclear energy or some other energy source – and allow all energy producers to compete on an open, level and transparent playing field. Doing that will provide the best means of ensuring competition and choice, which will lead to reliable, affordable electricity for the people of Michigan.

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