Legislators approved a bill in September to spend an extra $1 billion, and the package includes $596.1 million in new business subsidies.
The money goes into a program created in 2021 that hands out money to select companies. The amount a company can receive is not subject to any limit other than what legislators have allocated into the fund. Legislators also required any deal to be confirmed by the legislature’s appropriations committees.
Shifting the Overton Window can take a lot. It can take important research to answer vital questions. Digging deep to tell the stories about the people harmed by the status quo, clever marketing and careful outreach. And lots of patience. Jarrett Skorup helped put all of these together for his work to change Michigan’s civil asset forfeiture laws, and I speak with him about it for this week’s Overton Window podcast.
The Michigan legislature approved almost $850 million for new corporate handout deals last week. Research shows that these types of subsidies are ineffective and expensive, but there was a silver lining. It was an appropriation made in a very public way and thanks to a law that demands modestly more transparency and accountability than past business subsidy dealings.
Michigan needs more people working as nurses, but it’s become harder to find them. This has led to an increase in hospitals using travel nurses and the companies who staff them.
Because of the increase in demand, staffing companies can charge high prices and travel nurses are making a lot of money. Hospitals and nursing homes would prefer to pay less money for this service, so they are supporting House Bill 6364 which would limit how much these temp agencies can charge.
Michigan has just over 32,000 prisoners and spent $1.4 billion on them in the latest fiscal year. That’s more than $40,000 per prisoner. This hefty price tag is often compared to school funding, which amounts to “just” $17,000 per student.
A union-backed school board candidate cites this difference in spending as a reason Michigan schools need more money. The ratio of student-to-inmate spending has been made into popular memes and gifs. The Washington Post says we need to redirect money from prisons to schools. The Daily Mail contrasts this as “incarceration vs. education.”
Michigan’s Strategic Fund awarded $25.5 million this week to a project at the former General Motors steering division plant in Saginaw. The deal promises to “retain 1,100 jobs” while helping what sounds like a market innovator: Motion control technology company Nexteer boasts the power to accelerate mobility in order to make it “safe, green and exciting,” according to Gov. Gretchen Whitmer’s announcement of the payment.
The Mackinac Center for Public Policy recommends a NO vote on the conference report for Senate Bill 844, the budget supplemental expected to be considered in both houses later today. We specifically oppose the $846.1 million line item for deposit into the Strategic Outreach and Attraction Reserve Fund.
Elected officials want to pass popular legislation. They have to rely upon their senses to figure it out when they deal with complicated issues. One way politicians make sense of what voters want is to listen to the conversation going on across the country and the reaction to laws that are passed in other states. Jonathan Williams, the chief economist and executive vice president of policy at the American Legislative Exchange Council, helps legislators hear what is going on in other states at the conventions his organization hosts. I speak with him about it for this week’s Overton Window podcast.
Just over 10 years ago, the Hoosier State adopted a powerful economic development tool in the form of a right-to-work law. This law simply states that workers need not be required to financially support or join a union to keep their jobs. Scholarship generally shows right-to-work laws are beneficial to workers and to job providers in states that adopt them. Our new research shows this as well.
Companies lobby state governments for grants, loans, tax breaks and other favors. Greg LeRoy at Good Jobs First wants state lawmakers to deny those requests. And I speak with him about it for this week’s Overton Window podcast.
“The things that benefit all employers — a good school system, efficient infrastructure, public safety, public health, the lowest tax rate and the broadest tax base to allow for efficient fair government and public services — all those suffer because now you’re hoarding and putting a lot of eggs in a few baskets,” LeRoy says.
Michigan’s balanced budget requirements allow legislators to spend as much money as they get in revenue, plus anything they’ve saved, but no more. Lawmakers practiced a remarkable level of restraint this year by not spending $7 billion in available revenue. There is a dispute among elected officials about whether to spend this money or use it to reduce taxes. The spenders have been winning the debate, though, since spending has increased a lot during the last three years.
Determinants of economic and other measures of well-being have been debated for hundreds of years. Adam Smith — the grandfather of modern economics — wrote his magnum opus, “An Inquiry into the Nature and Causes of the Wealth of Nations” on the subject.
People are worrying about whether job cuts at their workplace are around the corner. Inflation-adjusted Gross Domestic Product declined for six months, after all, and this is a conventional measure for when the economy is in a recession. But so far, the economy has been adding jobs. The number of jobs in the United States went up in July, making it back to where it was before the pandemic. But Michigan hasn’t made it back. And that’s why Gov. Gretchen Whitmer ought to stop vetoing tax cuts.
Regardless of which party controls Congress or the White House, the one thing that Washington politicians seem to agree on is the desire to spend more. Michigan’s state government has been a beneficiary of Washington’s excess.
The federal government showered states with money since the beginning of the COVID-19 pandemic, both with special spending bills and by increasing spending through the normal federal budget process. State officials in Michigan expected to receive $23.1 billion from the federal government when they enacted the 2019-20 fiscal year budget.
Ryan Green and Austin Berg work at Iron Light and consult with advocates around the country to help them persuade people on policy issues. In 2020 they opposed a constitutional amendment to install a progressive income tax in Illinois, which voters rejected 53 to 47. Green also has a paper out, Using Persuasion to Win the Culture War, that lays out his approach. Green and Berg join me to discuss communications strategy on this week’s Overton Window podcast.
Using private companies to provide municipal water service is dangerous, claims progressive professor and author Robert Kuttner. “Privatized systems are typically less reliable, far more expensive, and prone to corrupt deal-making,” Kuttner writes in The American Prospect.
Gov. Gretchen Whitmer has made clear her commitment to imposing electric vehicles on the state as part of her Mi Healthy Climate Plan pledge to “electrify vehicles and increase public transit.” The next step in her plan is to spend your tax dollars on electric vehicle chargers, whether you want them or not.
A campaign ad from U.S. Rep. Elissa Slotkin criticizes her opponent Tom Barrett, a state senator from Potterville, for voting against a $1 billion corporate welfare slush fund. “Thousands of jobs, gone,” is what she assumes would happen without the subsidies. She’s putting too much faith in this kind of favoritism, as many lawmakers do. Lawmakers should vote against ineffective and wasteful programs, and politicians stop confusing selective business subsidies with jobs.
Politicians promised Flint would be a one-time mistake, but similar concerns have appeared in Benton Harbor only a few years later.
The challenges of managing aging infrastructure led, in the words of one journal, to “oversights and missteps combined with inherent chemical conditions” that allowed a “historic water crisis” in Flint. Has government oversight now also failed the people of Benton Harbor?
Editor’s Note: This piece was first published in The Detroit News on Aug. 3, 2022.
Should higher education dollars be given to universities or to students?
Michigan lawmakers are thinking about doing both. It might sound like the kind of strategy that can make college more affordable for Michigan families. Don’t be fooled, though. In reality, student scholarships for higher education will do little good if lawmakers also fail to remedy the nonsensical and muddled way they give universities money.
Editor’s Note: This piece was first published in The Detroit News on June 23, 2022.
Michigan was embroiled in not one, but two emergencies in 2020: the COVID-19 pandemic, and the legal controversy over the governor’s use of executive power. Residents were subjected to legally questionable mandates and rules that were unprecedented, contentious and everchanging.
Politicians are sensitive to what people think about them, and they pay attention to what people say. Newspapers remain the place where people talk about state policy the most, and editorialists and columnists have a prominent platform to talk about state policy. I spoke with Ingrid Jacques about it for the Overton Window podcast. Jacques is a columnist at USA Today and a former editorialist at The Detroit News.
(This opinion piece was originally published in Bridge Michigan on Aug. 4, 2022.)
When plying for more money to hand out to a favored few businesses, supporters say that Michigan needs to catch up with the profligacy of other states.
“We know that Michigan is in competition with other states. We all know that,” Lansing Mayor Andy Schor told a committee hearing on corporate subsidies earlier this summer. “We know that there are other states out there that give direct dollars to local companies that go there. They will give out cash up front. We know that in the ideal world, we wouldn’t have to do any of this. But we are in competition and we have to win that competition for jobs and for investments.”
The advantage of serving many years in one position is having experience and perspective. One can draw on a reservoir of past events and look for themes. One recurring storyline in my nearly 30-year association with the Mackinac Center is that of tax cuts not delivered.
The U.S. Supreme Court ruled, in one of the most important cases of its latest term, that presidents do not have the authority to address major questions not given to them by Congress. I spoke with Rich Samp, senior litigation counsel of the New Civil Liberties Alliance, about it for the Overton Window podcast. We covered what was going on in the case and how the court ruled. We also talked about what he and his colleagues are doing to reinstate the separation of powers doctrine to American politics.