How much background research does Michigan's corporate welfare bureaucracy actually perform on the potential recipients of its selective tax breaks and subsidies? Due to recent embarrassments the amount may be increasing, but until now the answer appears to be, "Not much at all."
The lead investor in a Grand Rapids-area film studio was in court Tuesday after being charged by the Michigan Attorney General's office with a felony relating to the deal.
As WZZM TV13 in Grand Rapids reports, the Mackinac Center "was the first to question the deal."
Most school districts are putting the finishing touches on next year's budget and anxiously awaiting word from Lansing about the exact dollar amount they'll get per pupil. While they're waiting, districts would be wise to give their teachers union contract a close look, since the bulk of school spending is absorbed by these employees.
The Michigan Attorney General's Office has filed a criminal charge against Joseph Peters, the primary investor in the Hangar42 film infrastructure tax credit/subsidy deal. The Mackinac Center in May was the first to raise questions about this deal after an investigation lasting several months. In June the Center was also first to call for a formal investigation. It must be noted that the filing of a criminal charge does not imply guilt.
While recently walking along the beach at the Traverse City State Park, I was appalled at how dirty the beach was. Among the litter and discarded cigarette buts it was difficult to find clean sand to sit on and enjoy the view of the bay. Perhaps part of the problem is there were no trash receptacles to be found anywhere in the area. What has happened to our state parks? The Lansing political class will claim it is a "lack of funding." In my observation, having worked in senior state park management positions in three different states - including a short stint as chief of Michigan State Parks - limited funds to manage state parks is a fact of life. Michigan doesn't need more funds for state parks, just better management of them.
(Editor's note: The following is an edited version of a letter to the editor first sent to The Grand Rapids Press by Mike LaFaive, director of the Morey Fiscal Policy Initiative.)
The Grand Rapids Press on July 27 published an editorial defending state business tax incentives ("Michigan needs to keep offering business tax breaks to create jobs," July 27) that fails to recognize one vital argument: They don't work.
The main investor in a Grand Rapids movie studio that applied for state film subsidy money has been charged with attempted felony false pretenses over $20,000, according to The Grand Rapids Press.
Attention was first drawn to this issue after the Mackinac Center broke the story following a months-long investigation by Center analysts, including a call for the Michigan Attorney General to investigate the Hangar42 deal. Fiscal Policy Director Mike LaFaive and Communications Specialist Kathy Hoekstra raised several questions about the matter with an essay and investigative video posted May 20. At issue was the value of the proposed film studio, which those involved said was worth $40 million, even though it had been listed by a real estate agent for $10 million shortly before the deal was announced.
Paul W. Smith, who hosts a talk show from 5:30 a.m. to 9 a.m. weekdays on WJR 760AM, cited a commentary on school funding by Education Policy Director Mike Van Beek in his Detroit News column Saturday.
Van Beek wrote that despite spending some $20 billion in local, state and federal taxes on public education in Michigan each year, the myth that schools are "underfunded" persists. The piece is part of an ongoing series examining school funding myths. As Michigan Capitol Confidential reports, Michigan spent a record amount on public schools in 2008-2009, the last year for which complete data is available.
With Tea Party organizer Jason Gillman breaking the news and Michigan Capitol Confidential reporting on it, the faux-"Michigan Tea Party" political party appears to be a dirty trick created by Democratic Party operatives. It's worth noting who comprises the real Tea Party movement in this state.
Oklahoma's state affiliate of the National Education Association only has 23,451 members, but has nevertheless launched a revenue-grabbing initiative, SQ 744, that will be on the ballot in November. The NEA is giving the local $3 million to promote the measure. Mike Antonucci wrote about it in his Education Intelligence Agency newsletter:
Stories in Michigan Capitol Confidential were the subject of recent radio interviews.
Senior Correspondent Tom Gantert, who wrote about the city of Ann Arbor spending $850,000 on a sculpture while laying off firefighters, was interviewed on The Lucy Ann Lance Show on WLBY AM1290 in Ann Arbor. You can listen to the interview here.
Some economic development officials are complaining of “collateral damage” from candidates and others who publicly discuss reining in Michigan’s generous array of targeted business subsidies and incentives. Last Saturday the Grand Rapids Press covered a roundtable discussion among four of the planners in an article titled "Politicians talk of killing tax incentives is hurting Michigan, economic developers say."
An article in Saturday's Grand Rapids Press contains one of the most troubling quotes from an economic development official we have ever read. It comes from Ron Kitchens of Kalamazoo's Southwest Michigan First and it continues a "stop picking on us" theme first advanced by Michigan Economic Development Corp. officials in a May letter.
A recent Michigan Capitol Confidential story about driver license renewal for people with outstanding parking tickets was cited as the source of information for two different newspaper editorials.
The Macomb Daily and Midland Daily News, which took opposite stances on the issue, both indicated the Michigan Capitol Confidential story was the source for their respective editorial boards.
According to the 2010 Index of Economic Freedom published by The Heritage Foundation and The Wall Street Journal, there are 16 countries that do a better job of protecting private property rights than the United States.
A dismal international ranking of 17 in protecting private property rights should serve as a wake up call to Americans concerned about individual freedom and liberty. It is impossible for a people to remain free without respect for the rule of law and protection of private property rights.
A recent blog post by Michael Jahr, senior director of communications, about Michael Moore accepting a Michigan film subsidy for a movie of his that railed against government subsidies was quickly picked up by other media, including The Michigan View at The Detroit News and The Houghton Lake Resorter.
"Cry me a future/Where the revelations run amok/Ladies and gentlemen/Lions and tigers come running/Just to steal your luck." — From "Especially in Michigan," by Red Hot Chili Peppers.
United Van Lines has released mid-year data on where it takes its clients to and from in the 48 contiguous states. Once again, Michigan finds itself in the number one position. That is, 61.6 percent of all Michigan-specific UVL traffic is outbound. Fortunately, this is down from 70 percent during the same the same time frame last year. Unfortunately, that drop may be a function of having nowhere to go.
The New York Times reported yesterday that "the oil spill in the Gulf of Mexico appears to be dissolving far more rapidly than expected" and that "the immense patches of surface oil that covered thousands of square miles of the gulf are largely gone."
Donald J. Kochan, an adjunct scholar with the Mackinac Center and an associate professor at Chapman University School of Law in Orange, Calif., wrote Monday in the Los Angeles Times about Ben Franklin's views on "luxury" and how they apply to today's society.
The Traverse City Record-Eagle yesterday reported that filmmaker Michael Moore expects to receive between $650,000 and $1 million in state film subsidies for producing part of "Capitalism: A Love Story" in Michigan.
Actually, the Record-Eagle reported that Moore has "a new project - revitalizing derelict, depressed downtown theaters in communities across Michigan." The fact that he would use taxpayers' money to pay for his philanthropy was barely noted. The irony that Moore might receive state funds for a film that denounced government handouts to the wealthy and politically favored went completely unremarked.
A Dearborn Times-Herald Op-Ed by Mike LaFaive, director of the Morey Fiscal Policy Initiative, points out the obvious: tax hikes kill jobs and tax cuts create them.
LaFaive's Viewpoint on the same topic is highlighted at "The Corner" on National Review Online today.
Michigan public schools received and spent more money per pupil in 2008-2009 than in any previous year for which figures are available, according to new data from the Michigan Department of Education.
Combined taxes from local, state and federal sources pumped $19.59 billion in the public school system last year. This gross receipts figure was actually down $200 million from the previous year, but since the number of students dropped by an unprecedented 31,000 from 2007-2008, the amount of money spent per student increased by $200, to just over $13,000.
Every week, MichiganVotes.org sends a report to newspapers and TV stations showing how just the state legislators in each publication's service area voted on the most important and interesting bills and amendments of the past seven days. The Legislature did not meet this week, so instead of votes this report contains eight newly introduced bills of interest:
It is good news that cap-and-trade legislation passed by the U.S. House will not be taken up by the Senate as announced by Senate leader Harry Reid yesterday. However, it is too early to celebrate the death of this job-killing legislation that would increase the cost of energy for American consumers and businesses. As Mark Twain famously quipped: "The reports of my death are greatly exaggerated." Bad ideas coming out of Washington die only to be resurrected in another form.
The Tuesday, July 22, Michigan Capitol Confidential story "The Art of the Ann Arbor City Budget" reached millions of readers, starting with an appearance on national news aggregator, the Drudge Report. The American Spectator quickly followed with a column expanding on similiar "creative" arts funding in other states. USA Today, Instapundit and Neal Boortz picked up the story as well.
