Michigan’s business subsidies are unfair, ineffective and expensive. Lawmakers should stop spending taxpayer dollars on them.
They are unfair because they reward some businesses at others’ expense. The new apartment complex in town gets a favor, while the old ones paying their share of taxes do not. One auto supplier gets money while another doesn’t. They’re all paying taxes, but some collect tax dollars, too, and state policymakers should not be picking winners and losers like this.
On June 14, the Mackinac Center for Public Policy submitted the following letter to the editors of The New Yorker, which they opted not to publish:
I enjoyed reading your story “The Rise of Black Homeschooling,” featuring the families of Engaged Detroit and the move to greater educational empowerment that has found a strong footing in Michigan’s largest city. Bernita Bradley is a true champion for students and parents in her community.
After spending almost half a billion dollars with little to show for it, the Michigan Legislature ended the state’s film subsidy program in 2015. Now, some are calling for these incentives to be brought back.
To bring awareness to these misguided policy efforts, Pat Garofalo, the director of state and local policy at the American Economic Liberties Project, and Michael LaFaive, senior director of the Morey Fiscal Policy Initiative for the Mackinac Center for Public Policy, teamed up to write an op-ed that was recently published in The Wall Street Journal. The piece noted the ineffectiveness of film subsidies, saying:
There are a lot of new drones on the market, and people are creating new businesses that use them. But should there be limits on their use? For instance, if a company flies one over someone’s house, is it trespassing? I spoke with Brent Skorup, a senior research fellow at the Mercatus Center, about what sets the Overton Window for regulating drone activities.
Gov. Gretchen Whitmer announced yesterday that the state would be lifting restrictions currently in place to fight COVID-19. Starting next Tuesday, the state will no longer limit gatherings or impose mask mandates, among other positive changes. More things are going back to normal in Michigan and the state has entered an economic recovery. Lawmakers can help that process by ending special pandemic assistance that provides an extra incentive to stay on unemployment. If the pandemic is over, it’s time to get off special pandemic assistance.
Senate Bill 285: Require ID to vote, authorize exceptions: Passed 19 to 16 in the Senate
To require a person to show an original or a copy of identification when requesting an absentee ballot in person or by mail, with those unable to do so getting a "provisional" ballot. Also passed were Senate Bills 303 and 304 to authorize the provisional ballots, which require a voter to show documents within six days that verify his or her identity and address for the vote to be counted.
For the past few years, Farmington and Farmington Hills have explored ways to expand broadband internet services in their cities. Unfortunately, much of this conversation has centered on starting a government-owned network. Cities do not have a good track record of running financially viable networks, especially those in areas with existing providers.
State legislators have a lot more money to play with this year as they negotiate the budget. If lawmakers cannot use this to improve the state’s long-term financial prospects or improve the quality of public services, they should use the excess to lessen the burdens government places on residents. Unfortunately, lawmakers are under constant pressure to spend more, and they often falsely assume that more money will result in better outcomes.
Michigan is spending more on roads. A lot more. The transportation budget has increased $1.8 billion since 2012, a 32% increase when adjusted for inflation. And yet road conditions have only gotten worse. A broad measure of road quality shows that 66% of roads used to be in good or fair condition in 2012 and 58% are at those levels today.
As of June 1, Consumers Energy has finalized the rollout of their new summer peak rate, which increases electricity rates by 50% during hours of expected peak electricity demand. With this new program, the utility takes another step away from providing reliable, affordable electricity toward an organizational ethic of offering an electricity service that leaves Michigan ratepayers exposed to the whims of weather.
With the state flush in new tax dollars, Michigan’s chief executive has called for a dramatic hike in preschool spending. But the budget request far exceeds the demand for these services.
On June 8, Gov. Gretchen Whitmer proposed spending an extra $405 million over the next three years on the state’s Great Start Readiness Program, “to ensure 22,000 more children can enroll in early education.” The program is geared toward children in households with income at or below 250% of the federal poverty level, which is $66,250 for a family of four. Two-thirds of the 65,000 eligible four-year-olds attend state-subsidized preschool. How many of the rest have parents who want them in?
Senate Bill 393: Give tax break to businesses afflicted by virus lockdowns: 19 to 16 in the Senate
To authorize tax relief for a business that was forced to close for at least six weeks due to an executive or emergency order that cost the business to lose 25% of its gross receipts for the year. The bill would authorize a business income tax credit equal to the business' property tax liability for the year. Businesses that rent would get a comparable credit based on lease costs. This applies to restaurants, taverns, hotels and motels, health clubs, entertainment facilities and other such “public facing” enterprises.
Many questions remain after an investigation by Pulitzer Prize-winning journalist Charlie LeDuff and the Mackinac Center concerning the total number of deaths from COVID-19 at nursing homes. A hearing on June 3 before the Michigan House of Representatives Oversight Committee featured comments from the Mackinac Center and Elizabeth Hertel, the director of the Michigan Department of Health and Human Services.
A new bill would impose additional licensing requirements on people who install solar panels in Michigan. Solar installers have been operating for decades without any apparent problems. Given that, these new licensing mandates are a solution in search of a problem.
Editor's Note: This article first appeared in The Hill on May 15, 2021.
In recent weeks, federal officials have announced policies that are very likely to increase cigarette smuggling into the United States and bring other unintended consequences.
The Tobacco Tax Equity Act of 2021, introduced in Congress on April 22, would both raise federal excise taxes (FET) on each pack of cigarettes and adjust the tax each year for inflation to ensure automatic tax hikes. In addition, the Food and Drug Administration has moved to ban menthol-flavored cigarettes, a popular type of smoke. Taken separately, either proposal would be problematic, but together they may lead to Prohibition-style lawlessness, without big gains for public health.
In 1891, Kansas became the first state to enact a prevailing wage mandate, which generally requires governments to pay a predetermined wage for work it contracts out, rather than use a negotiated or market-based pay rate. Dozens of other states followed suit, with the regulation especially popular during the 1930s. But not all states joined the crowd.
The Overton Window on K-12 education had been firmly set in place in the 1980s. Outside of some students in religious schools, elitist enclaves, and a handful of homeschool households, everyone went to assigned public district schools based on where they lived.
Senate Bill 458: Require governor notify legislature when traveling out of state: Passed 20 to 16 in the Senate
To require that when leaving the state and on return, the governor must notify the lieutenant governor, and require this person to notify legislative leaders in writing within 12 hours.
It is well known that COVID-19 is significantly more dangerous for older populations. Data from Michigan shows that about 83% of the deaths associated with the disease in 2020 were of people 65 or older. But how does the risk of dying from COVID-19 compare with other risks, especially for younger populations? Turns out that this risk is not different from others faced on a regular basis.
The state of Michigan and its local governments are awash in cash – buoyed by a strong economy and an influx of federal funds. Lawmakers are looking to appropriate this money and, unfortunately, many are exploring risky new government-run programs.
Government-owned broadband networks are near the top of the wish list for many cities, counties and schools. There is certainly a need for better high-speed internet in parts of the state. The good news is that the Michigan Legislature passed a bill last year that set some guidelines to ensure those areas are being helped, without resorting to unnecessary overspending or unfair practices. It’s Public Act 166 of 2020, which lays down rules for distributing federal funds meant for broadband deployment. It prohibits government-owned networks from receiving the funding and ensures broadband grants go to private providers expanding in unserved areas, rather than those which already have companies in operation.
In the three decades of the modern school choice movement, 2021 has no rival. This Year of Educational Choice has broadened opportunities for students and families more than any other. But these opportunities have not penetrated everywhere. Without a bold strategy, Michigan is one place where students and families will be left in the dust.
House Bill 4448: Prohibit limiting government open records disclosures during emergency: Passed 21 to 15 in the Senate
To establish that an executive order, proclamation, or directive issued under the law that authorizes the governor to declare an emergency may not lengthen the required government agency response times or otherwise limit the scope of a public body's duties to provide records requested under the state Freedom of Information Act. Such an order was imposed in April 2020 and rescinded that June.