Blog

Contracting out with private companies to provide support services has been a time-tested way for school districts to save money and improve their operations. The Mackinac Center has surveyed districts going back to 2001 to find out just how many contract out for food, custodial and transportation services. We found that contracting increased from 31.0% of school districts in 2001 to 69.6% in 2021.

Senate Bill 85: Authorize spending $1 billion on new corporate subsidy program: Passed 25 to 11 in the Senate

To appropriate $1 billion for a new corporate subsidy scheme. The money would pay for a “Critical Industry Fund” to give grants and loans to certain companies to create jobs or job training, and a “Strategic Site Readiness Fund” to give others money to create “investment-ready sites” for new plants and facilities. The bill also appropriates $409 million for relief to businesses "afflicted" by the coronavirus epidemic and responses, and $75 million to reduce personal property taxes levied on business tools and equipment.

Late 19th-century America has the reputation as operating under free-market policies — not because of anything that went on in the federal government, but because of a bottom-up citizen reaction to failed policies in the states. It put in place important limitations on state governments’ ability to support private business with tax money. The limitations stand in the law even today, but courts have, in various opinions, reduced them to near-irrelevance. I spoke about these laws, and their changing role, with Matthew D. Mitchell and Jonathan Riches, co-authors of the report, Outlawing Favoritism: The Economics, History, and Law of Anti-Aid Provisions in State Constitutions, published by the Mercatus Center.

Editor's Note: This article first appeared in The Hill on November 6, 2021.

New research shows a key part of Democrats’ education agenda would deeply discriminate against thousands of Detroit students.

Back in the summer, the Democratic-majority U.S. House of Representatives narrowly passed legislation to continue funding the U.S. Department of Education. As approved, House Resolution 4502 would deny all federal funding to any charter school that “contracts with a for-profit entity to operate, oversee or manage” its activities. These entities are commonly known as education management organizations, or EMOs.

Editor's Note: This article first appeared in The Detroit News on December 10, 2021.

Gov. Gretchen Whitmer claims she wants to limit the costs that ever-changing energy policies impose on Michigan residents. We’re interested to see if she’s really serious about helping lower energy costs.

An ongoing legal case raises the question: Who owns public school students?

Earlier this month, the Michigan Court of Appeals weighed in on a longstanding legal tussle between two metro Detroit school districts. The proceedings date back a decade, when Warren Consolidated School District first sued the School District of the City of Hazel Park. Warren argues that Hazel Park was “wrongfully depriving [it] of students.”

Senate Bill 770: Create new corporate subsidy program: Passed 27 to 10 in the Senate

To create one of the corporate subsidy accounts Senate Bill 769 would authorize, to be called the “Strategic Site Readiness Fund,” which would give grants and loans to certain companies to create “investment-ready sites” for new job producing plants and facilities.

If the leaders of Michigan school districts have one wish this holiday season, many might ask for more qualified teacher candidates. To the extent this need is real, there are policy changes the state Legislature can adopt to grant their request.

Demand for teachers in Michigan public schools has risen, at least relative to the number of students in classrooms. State Superintendent Michael Rice has sounded the alarm, declaring a “teacher shortage crisis” and touting a goal for the state to certify more instructors for K-12 classrooms.

The costs of college seem to be spiraling upwards endlessly. Jenna Ashley Robinson, president of the James G. Martin Center for Academic Renewal, has a simple solution: Make schools responsible when their students default on their debt. I spoke with her about her idea for the Overton Window podcast.

Editor's Note: This piece first appeared in The Detroit News on November 22, 2021. 

Some Michigan lawmakers want to hand out $300 million in taxpayer support to select businesses. States all over the country have tried to improve their economy with business subsidies, but with little success. They’re ineffective at creating jobs, expensive to the state budget and unfair to the businesses that don’t get them.

To hear politicians talk, you’d think that landing big business projects with taxpayer spending would make them Prometheus incarnate, bringing fire to man.

In a recent announcement that the state had approved a $250,000 payment toward a company’s expansion, Gov. Gretchen Whitmer pledged that she would “continue building up Michigan's economy and usher in a new era of prosperity together."

Flint Community Schools is on its third superintendent in two years. The previous superintendent abruptly resigned and is suing the district, amid in-fighting on the board. In short, the school system is a mess.

The district’s enrollment has fallen for decades and is now in a state of collapse. In 2002, about 21,000 students were enrolled, a number which dropped to about 11,500 in 2010. As of last year, the district was down to about 3,000 students, and it has been approved for more than $156 million in federal COVID relief money. That’s more than $50,000 per student, by far the most for any school in Michigan.

The U.S. House of Representatives has narrowly passed the “Build Back Better” plan. This is the latest of several federal spending bills that have added trillions of dollars in debt in just the past two years.

All Michigan congressional Democrats supported it: Reps. Dan Kildee, Elissa Slotkin, Andy Levin, Haley Stevens, Debbie Dingell, Rashida Tlaib and Brenda Lawrence.

The House and Senate are on break until Nov. 30, so rather than votes, this report describes some of the many “economic development” bills introduced this year to give selective subsidies and tax breaks to certain corporations and developers.Around 20 such bills have been introduced in 2021, with two already signed into law and several others passed by either the House or Senate (but not both). This report describes some of those that have not yet received a vote.

Leon Drolet had a very good 2006. That year, voters approved two initiatives to amend the state constitution, and he had worked on both. I spoke with him for the Overton Window podcast about his different roles in those campaigns.

The first initiative banned the use of race preferences in state government, including for university admissions. The other prohibited the use of eminent domain to take a person’s property for economic development purposes. And though both wound up on the ballot in 2006, he played very different roles in each.

The Canada-based Fraser Institute has released its annual Economic Freedom of North America report, and Michigan is ranked at an uninspiring 34th among the states for economic liberty. This reveals a relatively poor set of policy choices that limit opportunity for our citizens.

Adapt or falter: That may be the choice facing Michigan’s local K-12 public school systems in the wake of prolonged disruptions brought on by COVID. One area where schools and families need more flexibility is transportation.

As is the case in so many activities these days, the task of getting children to and from schools is afflicted by a tight labor market. Bus drivers, whether employed in-house or contracted through a private business, are widely reported to be in short supply. Fewer drivers are coming back to work after pandemic-induced school closures sidelined their services. The situation is so bad that the superintendent of one small mid-Michigan district earned a commercial driver’s license so he could pitch in on some bus routes.

State lawmakers are sitting on an extraordinary amount of cash right now. Between federal government transfers to the state budget — financed by the national debt — and unexpectedly strong state tax collections, policymakers have at least $11 billion sitting around. That’s the equivalent of 34% of all of the money the state collected from its taxes and fees prior to the COVID-19 pandemic.

Legislation being considered in Michigan would prevent municipalities from banning short-term rentals. Local government officials and the taxpayer-funded groups that represent them in Lansing are fighting against the bill. But their arguments are shallow and sometimes nonsensical.

Senate Bill 671: Repeal requirement that corporate subsidy scheme benefit state economy: Passed 28 to 7 in the Senate

To revise 2017 “Good Jobs For Michigan” law that authorized the state to give ongoing cash subsidies to Detroit developer Dan Gilbert and potentially other business owners, by stripping-out provisions requiring that the transfer of state revenue “result in an overall positive fiscal impact to this state.” Unlike the other corporate and developer subsidy schemes enacted by the legislature in the name of “economic development,” this law’s revenue transfers appeared designed to incentivize existing businesses moving from other Michigan communities to Detroit, without regard for whether this had any positive impact on the state as a whole. The bill would also increase an annual cap on how much a subsidized company could get.

The recent gubernatorial election in Virginia should capture the attention of Michigan policymakers. A surprising victory by the Republican candidate was “powered by parents,” according to University of Virginia professor Brad Wilcox and American Enterprise Institute researcher Max Eden. Parents here are hoping for someone to champion their cause.

As lawmakers consider bills to spend more on selective business subsidy programs, they ought to question whether this is the right strategy. If they want to win the war for jobs, they should look to the states that have added the most jobs. That’s Utah and Idaho. They’ve added the most jobs over the past decade, and they’re the first states which now have more jobs than they did when the pandemic started.

House Bill 5097: Ban "Critical Race Theory" curriculum in public schools: Passed 55 to 0 in the House

To prohibit public schools from teaching 'critical race theory." Specifically, the bill prohibits instructing children that because of their race or gender individuals comprising a racial or ethnic group or gender all act in certain ways, hold certain opinions, are born racist or sexist, bear collective guilt for historical wrongs, or regard race or gender as a better predictor of outcome than character, work ethic, or skills. Also, to ban teaching that the cultural norms or practices of a racial or ethnic group or gender are flawed and must be eliminated or changed to conform; that racism (or sexism) is inherent in individuals from a particular race or ethnic group (or gender); that a racial or ethnic group or gender is in need of deconstruction, elimination, or criticism; or that the actions of some individuals serve as an indictment against their race or gender. Democrats abstained from voting on the bill.

Policy advocates know a little bit more about some things than most people. One of those is that shipping from American port to American port is a highly regulated business, with restrictions that cause unintended harms. When I mentioned the policy — the Jones Act — to my friend Alisha, she wanted to know more. We spoke with Colin Grabow about it for the Overton Window podcast. He’s a policy analyst at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.

The Mackinac Center’s Business Subsidy Scorecard has been updated to include Public Act 93 of 2021, which authorizes one particular company to receive refundable tax credits beyond what it was eligible for. Introduced by Rep. Ryan Berman, R-Commerce Township, the law will allow the company to collect $12.8 million in further credits, which transfers from other taxpayers to the company when its credits exceed its tax obligations.