State lawmakers have a lot of money at their disposal, and legislators voted to use some of it to lower taxes. This would make Michigan more competitive, encourage small business, lower the burden of government and help Michigan’s economy recover. The rapid growth of state spending called for in the governor’s executive budget also shows that it’s important to cut taxes just to ensure that budget growth is sustainable.
By Ben DeGrow
The effect of lost learning from COVID school policies has impaired many high school students’ abilities to chart a path to productive futures. Though many have struggled in recent years, lawmakers have tools to enlist students directly in support of their own future professional attainment. They should use those tools.
Michigan made a promise to taxpayers in 2007 that a hike in income taxes would be just temporary. It was not. Now that the state is awash in cash, policymakers ought to consider making good on the old promise. Restoring the income tax to its 3.9% rate will make Michigan more competitive, encourage job growth, and attract more people to the state.
Last year, 14 states cut their taxes. On this week’s Overton Window podcast, I talk about why they did so with long-term taxpayers advocate and strategist Grover Norquist, president of Americans for Tax Reform.
Tax cuts are not only popular, Norquist says, but helpful to a state that seeks to attract more people. States with low — or no — income taxes tend to attract people from high-tax states.
Some bad ideas just won’t die.
Legislators introduced a pair of bills in the Michigan House and Senate earlier this month aimed at bringing back the state’s corporate tax incentive for the entertainment industry. If enacted into law, taxpayers would reimburse 20 to 30 percent of in-state spending on film, television, and commercial productions for the next decade. The program would cost taxpayers up to $50 million annually to start and $100 million annually ten years from now.
Gov. Gretchen Whitmer on Wednesday derisively dismissed a tax cut proposal passed by the Senate. Her argument against a cut was supported by a Lansing group that argued wealthy taxpayers would enjoy the largest share of the tax relief. Such an analysis is overly simplistic and lacks basic but vital context.
Editor’s Note: To read the Spanish-language version of this blog post, click here.
Nota del editor: para leer la versión en espanol de este blog, haga clic aquí
The economies of most Midwestern states have not performed particularly well over the years, as indicated by many objectively measurable categories. The Michigan-based Mackinac Center for Public Policy and Mexico-based Caminos de la Libertad use these categories, as well as data about income, migration and related indicators, to find the best policies for human well-being.
Editor's Note: This piece first appeared on January 27, 2022, in the Oakland Press.
My high school-aged boys were on a non- stop merry-go-round: Hybrid. Virtual. In-person. Quarantine.
As our sons headed into the 2020-2021 school year, these were just a few of Michigan’s new public school policies. We were hopeful, because the Michigan Department of Education and our school districts had had five months to figure out a plan for education during a pandemic. Unfortunately, as the school year went on, our hopes began to diminish.
By Ben DeGrow
Michigan’s governor wants another major infusion of extra tax dollars into the state’s public schools. The predictable approach has been rewarded with approving media headlines. But one troubling aspect of her proposed spending has received little attention: the extent to which it picks winners and losers.
"Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves."
-- Ronald Reagan
Can students, and the public, ever move beyond the sentiment that “there oughta be a law”? Is it possible to break that easy and unfortunately comfortable habit of demanding increased regulation at the first sign of any environmental problem?
The first food delivery services began in the 1700s. Pizza delivery took off in the 1960s and has been a staple of the industry ever since. Teenagers have done it for decades. There has largely been limited, or zero, government regulation of these services across the United States. But a proposed bill in Michigan would change that by requiring people who deliver food to get a certification.
The Overton Window for cigarette policy is narrow. Cigarettes are highly regulated and highly taxed. To the extent that there is a policy debate, it tends center around whether to ban menthol cigarettes and whether to raise taxes. Yet the popularity of new nicotine products like e-cigarettes has changed the policy debate, and to talk about this, I spoke with Michelle Minton, a senior fellow at the Competitive Enterprise Institute.
When state lawmakers approved $1 billion in new selective business subsidies, they didn’t specify what companies would need to do to receive payments. What administrators came up with may not be what legislators intended.
Some programs give companies money based on the wages they pay for new jobs. Others give out money based on how much the companies spend on buildings and equipment. And some offer tax credits to companies when they spend money on favored activities like research and development. For this latest program, policymakers did not specify how recipients would qualify for cash. Instead, they let administrators fill in the details.
By Ben DeGrow
Flint schools are open at last. The heavily funded but troubled Flint Community Schools reopened classrooms Monday, becoming one of the state’s last holdouts to return to in-person instruction.
The district is flush with cash, but its commitment to keeping classes open has been weak. More than 90% of Flint students come from low-income families. While remote instruction typically lowers achievement for all, economically disadvantaged students stand at even greater risk of losing ground.
State lawmakers in December 2021 approved a new $1 billion corporate handout program called SOAR, or Strategic Outreach and Attraction Reserve. General Motors was quickly approved by the state’s “jobs” fund to receive the bulk of the fund’s first appropriation. All that’s left now to complete the deal is a final sign-off of the state’s appropriations committees. The members should reject this deal.
While Michigan employs 205,200 fewer people than in February 2020, a 4.6% decrease, the state government’s budget continues to grow.
To keep the government from spending more and further crowding out the productive private sector, the Mackinac Center has created the Sustainable Michigan Budget. This plan would set a maximum limit on what lawmakers can spend, based on changes in population and inflation. The next state budget would be allowed to grow by 3.15% under this formula, limiting spending of revenue from state taxes and fees to $39.1 billion.
The Michigan Senate Finance committee passed a bill to the full senate that would lower the income tax rate, the corporate income tax rate, and to give families a $500 tax credit for each of their dependent children. It’s good to see that lawmakers are interested in lowering taxes. It improves state competitiveness and creates jobs. It’s also a good time to consider tax cuts, since strong revenue growth ensures that the state can afford to reduce tax rates.
Michigan lawmakers approved $1 billion worth of subsidies in December, driven by requests from unnamed companies for special treatment. More handouts to corporations are being considered. What is remarkable about the debate around the spending is how little of it occurred. Supporters refused even to acknowledge criticisms.
By Jack McHugh
Senate Bill 642: End competitive bidding on state engineering contracts: Passed 37 to 0 in the Senate
To no longer seek competitive bids for state architectural, engineering or land surveying service contracts, and instead let officials assess and rank vendors according to specified (and potentially subjective) criteria, and then try to negotiate a “fair and reasonable” contract with the “highest ranking” firm. The bill does not define “fair and reasonable,” and in the absence of competitive bidding it is not clear how a state department could know that amount. If officials don’t get the price they want they would repeat the process with the next firm on their list.
One of the long-standing strategies to get long-term political change is through youth engagement, especially on college campuses. Jarrett Skorup spoke with Tori Aultman for the Overton Window podcast about her experience launching a school debate and activism club at her university.
By Jason Hayes
“Free enterprise, personal responsibility, free markets, limited government, rule of law and, of course, freedom are fundamental tenets to democracy and human progress,” Northwood University President Kent MacDonald wrote in a recent post to the university’s website. These tenets form what MacDonald calls the “Northwood Idea,” and for 60 years they “have guided Northwood in our belief that liberty is the greatest determinant of one’s success in life and of prosperity in the communities where we live.”
Three state universities in Michigan have eliminated in-state tuition rates. Some lawmakers may be concerned that residents no longer get special treatment, but this is a good move for the schools and for the state.
Eastern Michigan University began charging the same tuition for residents and nonresidents for the 2016-17 year. Ferris State University and Lake Superior State University made the move in 2018-19.
By Ben DeGrow
The 12th and latest edition of National School Choice Week (January 23-29) arrives in Michigan at a time when demand for education options has reached an all-time high. Out of appreciation for the benefits many students and families already enjoy, state officials should work to further expand access to needed options.
Editor's Note: This article was first published in The Detroit News on Jan. 17, 2022.
Last week, Michigan Department of Health and Human Services Director Elizabeth Hertel aired her grievances with an auditor general’s review of how her department tracked COVID-19 deaths in long-term care facilities, such as nursing homes. The auditor general released the anticipated report Monday, and the results reveal that the state failed to accurately track and report these deaths.
Editor’s Note: This is an updated version of a blog that was first published one year ago today.
Gov. Gretchen Whitmer announced a $5.6 billion pandemic recovery plan for Michigan 12 months ago, and she included in her proposal a call for more corporate handouts. Chief among her ideas is renewing the so-called Good Jobs for Michigan program. Legislation to do just that — but under a new name — is up before a state House committee in Lansing at 9 a.m. Tuesday.
