Yesterday, the Bureau of Labor Statistics released the most recent quarter of its Business Employment Dynamics statistics[*] showing the level of private-sector "job churn" in each state, which is the number of jobs that disappear and the number that are created. They show that from the third quarter of 2008 through the second quarter of 2009, 778,025 jobs were created in Michigan and 1,144,655 jobs disappeared. Among other things, the figures starkly illustrate just how ineffective the state's economic incentive programs are.
From MichiganVotes.org:
2009 House Bill 5567 (Grant property tax breaks to a particular subdivision)
As is the case with most, if not all, state spending, current resources should be spent more wisely before looking at raising taxes.
That is especially true of the gas tax, which Senior Legislative Analyst Jack McHugh wrote about in an Op-Ed for the Cadillac News. (Scroll to the bottom.)
From MichiganVotes.org:
2010 House Bill 5784 (Mandate "in person" accident and ticket reporting to Secretary of State)
Introduced by Rep. Matt Lori (R) on Feb. 9, 2010, to require individuals involved in a car crash or who get a ticket to report this "in person" within seven days to the Secretary of State, subject to a $500 fine and 93 days in jail for not doing so. The person would have to bring in proof of insurance at the time of the incident, and if the vehicle wasn't insured the Secretary of State would report this to the local police or sheriff.
One can’t help but wonder why they do it. Every couple of weeks, The Detroit News will run some tedious recitation of organized labor’s talking points on its Op-Ed page. The article will be completely predictable: It will not diverge from standard union rhetoric in the slightest, nor will it contain any new information. It will say the most outrageous things, but the outrages will be old outrages that we’ve heard a dozen times before. It will not really address anything pressing. It will read like something from a mediocre union newsletter. In short, it will be a waste of space.
The Michigan Senate Fiscal Agency has performed an initial review of Jennifer Granholm's executive budget recommendation, which reveals that the proposed service tax would increase sales tax revenues by more than $900 million when fully implemented. The revenue would (eventually) be offset by a reduction in business taxes.
On his Facebook page, State Rep. Justin Amash, R-Kentwood, has posted the text of an e-mail sent by MEA school employees union Communications Director Doug Pratt to Rep. Tim Melton, D-Pontiac, chair of the Education Committee:
Put in a graduated income tax...I can afford to pay to have good schools for my kid and others in my community. And put a tax on services...it is ridiculous that I pay a tax on clothes for my son or a night out at a restaurant (pretty normal middle class things) and I don't pay tax on my landscaping bills, my snow removal, my season tickets, my golf rounds, or my dry cleaning (all things that I and any other family in Michigan could do without if we chose). And don't feed me the line that it'll hurt our economy. I was just in Chicago over the weekend and bought a book at a Borders on Michigan Ave that had a 10.25% sales tax on it. That's almost double what we charge here...and I didn't wait until I came home to buy the book...
The term "Detroitification" — which I first coined in 2007 to describe the process by which the private sector is hollowed out to prop up an unsustainable government establishment — has been catching on in various places around the country.
The term generally implicates government employee unions that use their political muscle to keep the loot flowing to members in the form of outsized compensation and benefits, and to bitterly resist reforms like privatization. In the term's namesake city it also refers to patronage and corruption, with members of the local political class funneling boodle to their friends, relatives and key campaign supporters.
Overtime costs for municipal employees can quickly mount and therefore deserve special consideration.
"Overtime is typically an area for abuse," Mike LaFaive, director of the Morey Fiscal Policy Initiative, told the Erie (Pa.) Times-News for a story about that city's costs. Although such expenses can be legitimate in some cases, LaFaive said, such as for police officers and firefighters, civil service rules and union protections can provide "ample opportunities" for overtime for municipal employees.
Gov. Jennifer Granholm argues (with some remorse) that during her seven-year tenure, Michigan has cut more from its budget than any other state. The claim is dubious, but another milestone about which she does not boast is verifiable: Since Gov. Granholm's first inauguration in January 2003, Michigan has led the nation in tax increases.
Michigan boasts the longest coastline in the United States, has more than 12,000 inland lakes, hundreds of golf courses, state parks, camping facilities, snowmobile and hiking trails, wonderful towns and cities and a great human capital base. We enjoy four seasons and a temperate climate, and have very few natural disasters: no hurricanes, mudslides, earthquakes, wildfires. Our road system, power grid and access to unlimited supplies of fresh water are superb — all critical elements for business expansion. Our universities compete head to head with other institutions in the United States and attract students from all over the world.
Had Joe Biden's stimulus-boosting, damage-control visit to mid-Michigan this week been made open to the public rather than just a few hand-picked visitors, maybe someone could have asked him why a 4-year-old "taxpayer" received a "first-time homebuyer" tax credit of $8,000.
In presenting her executive budget, Gov. Jennifer Granholm stated, "I have cut more state spending than any governor in Michigan history, having resolved more than $10 billion in deficits since 2003." It's unnecessary to state that one of those budgets was "resolved" with a $1.4 billion tax hike — not exactly cutting more than anyone — but even the $10 billion is an overstatement.
While states are fighting for an ever larger share of the so-called stimulus money, Michigan should be glad it did not receive more than it did for a Detroit-to-Chicago high-speed rail corridor.
Randal O'Toole, a senior fellow at the Cato Institute and an adjunct scholar with the Mackinac Center, explains why in this Detroit Free Press Op-Ed. This is the second time O'Toole has written about this issue for the Free Press since August. The first can be read here. You can also read a review of his recent book, "The Best Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future," here.
Recent news reports that the Canadian premier of Newfoundland and Labrador would obtain heart surgery at an American hospital occasioned teeth-grinding by supporters of a government-run health care system like Canada's, and snickers from those opposed to the Congressional plan to impose a system with many of the same features here.
Flags are everywhere at the Olympics, but the games are not about international strife. There, patriotism trumps nationalism, and performance eclipses politics. The Olympics highlight the fact that individuals, not governments, make countries great.
During the games, governments are no longer the faces of their countries. We care more about what a 16-year-old girl is doing on the ice than that the vice president is in the stands. In fact, the only spectators we care about are the very ordinary families of the competitors.
Last week, Gov. Jennifer Granholm introduced the final budget of her tenure. She proposes spending $2.1 billion more than the current year, and requests a $554 million net tax increase for fiscal 2011. The tax hike comes from immediately increasing the tax burden on consumers by expanding the sales tax to services, while gradually implementing a reduction in business taxes.
Today marks one year since President Obama signed the American Recovery and Reinvestment Act of 2009 into law.
Below is a sampling of what Mackinac Center analysts and scholars have written in the past year about the so-called stimulus bill.
A new study claiming that charter public schools are segregated should be ignored according to comments by Mike Van Beek, the Center's director of education policy, in the Chicago Tribune.
Van Beek easily dissected the flaws in the study. He also writes about charter schools here and here.
Tax breaks, subsidies, credits and other forms of corporate welfare must be addressed in Michigan's fiscal 2011 budget.
The Detroit News editorial today says this issue "has received scant attention from anyone" other than the Mackinac Center.
Here is just a sampling of the work Center analysts have done on this front:
Cutting corporate taxes, not "punitive" actions, are the best way to revive American industry, according to David Littmann, senior economist for the Center.
Littmann told Industry Week magazine that calls from labor for a national industrial policy will result in special interests, not the marketplace, coming out ahead.
"Recently the Mackinac Center using this kind of flawed logic took Governor Granholm to task for saying that Michigan didn't want to become Mississippi. Mississippi is the poorest state in the country, with high poverty rates and low education attainment. The Governor is right. Who wants to be like them? What an awful vision for Michigan: one of the poorest states in the country." Lou Glazer
A few days ago on the Facebook page of one of Michigan's Tea Party leaders (Wendy Day of "Common Sense in Government"), some reader comments were posted revealing confusion regarding the purpose and composition of that movement. I took the opportunity to expand on an answer from the Mackinac Center's "Tea Party Activist Toolbox," as follows:
Radio talk show host Rush Limbaugh on Friday spent several minutes talking about the lawsuit filed by the Mackinac Center Legal Foundation against the Michigan Department of Human Services over the forced unionization of tens of thousands of home-based day care providers.
Henry Payne, editorial cartoonist for The Detroit News and contributor to The MC, wrote recently at National Review Online about what he sees as the "green indoctrination" of public school students.
CapCon Daily also examined this issue recently.
