The MC: The Mackinac Center Blog

Happy Constitution Day

Recognizing the importance of Sept. 17

Today, Sept. 17, is Constitution Day, which the Mackinac Center commemorates in this piece by President Emeritus Lawrence W. Reed.

Michigan Education Digest

How many districts have self-created overspending crises?

This week’s Michigan Education Digest is now available online. Topics include the retirement of the Detroit Federation of Teachers president, a school district saving $737,000 by dropping union insurance and the number of districts that have self-created overspending crises.

Government Transparency Bill Stalled in Senate

Michigan House passed bill six months ago

It’s been six months since the Michigan House passed House Bill 4001, but the Senate has taken no action on it apart from referring the bill to the Government Operations Committee.

The bill, which drew bipartisan support in the House, promotes government transparency and accountability by modernizing the state’s Freedom of Information Act. This law enables residents and journalists to request and obtain government records. The Mackinac Center relies on FOIA to conduct its public policy research and to promote government accountability; each year we file hundreds of FOIA requests.

A common complaint about the public records law is the cost imposed on individuals who request records. Agencies charge a per-page copying fee, as well as a search fee for a public employee to locate and copy the record. Stories of agencies charging exorbitant fees are common; the Mackinac Center holds the distinction of receiving a $6.8 million bill from the Michigan State Police for one FOIA request. (We chose to forego obtaining the records in order to avoid incurring a cost that exceeds our annual budget.)

Introduced by Rep. Mike Shirkey, R-Clarklake, HB 4001 received careful consideration in the House and incorporated feedback from multiple organizations. The version passed by the House is designed to control how much agencies can charge the public for turning over public records. The bill also increases penalties that can be imposed on agencies that improperly withhold records.

Transparency shouldn’t be viewed as an extra cost or burden borne by public agencies; rather, it should be seen as a vital function of government. HB 4001 helps accomplish this worthy priority.  

CapCon Takes Former Clinton Official to Task

Robert Reich ignores facts in Free Press op-ed

Michigan Capitol Confidential today exposes several flaws in a Detroit Free Press opinion piece written by former U.S. Secretary of Labor Robert Reich that accuses “mostly white” Oakland County for Detroit’s financial problems.

Grasping At Taxes to Pay for Pensions

Schools, municipalities get creative

Steve Malanga at Public Sector Inc. reports on Pennsylvania governments increasing taxes in order to pay increased pension requirements.

Malanga follows tax increases in Scranton, York City, and in a number of school districts. He also notes that districts are looking to challenge property assessments in search of more revenue.

The Warrior Run School District in Union and Northumberland counties has a different idea on how to raise revenues. Last week the school district sent registered letters to dozens of property owners advising them that it is challenging the assessments of their properties, asking for a higher value and tax bill. With health and pension costs creating a $1 million deficit, the district is looking to generate $600,000 from the unusual reassessment move.

Some of this is happening in Michigan. New assessing rules have meant more inspections and after the housing bubble, cities are desperate to recognize increasing home values. Cities are also challenging previously exempt nonprofits to pay property taxes.

While Michigan has not seen the volume of tax hikes that Pennsylvania has, it may be around the corner. Allen Park, currently in emergency management, passed a public safety millage that will partially go to shore up underfunded police and fire pension systems. The increased contributions required by the pension system is one of the reasons that the city is under emergency management in the first place.

We are not likely to see such tactics in Michigan school districts, however. Most districts already charge the maximum amounts they can for operating purposes. So the increased retirement contributions must come out of their additional state contributions, through operating efficiencies, or through reductions.

The need for operating efficiencies is one reason why so many districts have contracted out support services.

September 12, 2014, MichiganVotes Weekly Report

Business tax, "bad driver" tax & more "shadow government"

Senate Bill 156, Reverse effect of Supreme Court business tax ruling: Passed 34 to 3 in the Senate

To clarify the intent of provisions in the Michigan Business Tax enacted in 2007, so as to reverse the effect of a recent state Supreme Court ruling (IBM v. Treasury) that reportedly would force the state to refund more than $1 billion to many companies headquartered outside this state. The case involved the interaction of MBT provisions with a separate multistate Tax Compact entered in 2006. (The MBT was repealed in 2011 but is still in effect for certain companies awarded state subsidies and tax breaks under its provisions).

Who Voted "Yes" and Who Voted "No"

Senate Bill 633, Allow community service to cover some “bad driver” fees: Passed 110 to 0 in the House

To allow a person to do 10 hours of “community service” in lieu of paying a state “bad driver fee” for certain offences, including driving without a license and failing to have or produce proof of insurance. The fees for these particular offences were repealed by a 2011 law, so the bill would apply only to individuals who incurred and failed to pay them in the past. These very high, revenue-raising fees were originally imposed in 2003 to avoid spending cuts in that year’s and subsequent state government budgets. A law enacted earlier in 2014 would gradually phase out the fees imposed for additional offenses.

Who Voted "Yes" and Who Voted "No"

Senate Bill 758, Authorize more stringent sanctions for delinquent hotel tax: Passed 97 to 13 in the House

To empower counties that choose to impose a tax of up to 5 percent on hotel and motel room charges to enforce the tax with the more stringent sanctions authorized for delinquent “special assessment” levies, which include forfeiture and foreclosure. Under current law, a delinquent owner is liable for a penalty of 25 percent of the amount in arrears plus interest, and up to 90 days in jail.

Who Voted "Yes" and Who Voted "No"

House Bill 4783, Expand a corporate/developer subsidy regime: Passed 83 to 27 in the House

To authorize creation of a seventh “Next Michigan Development Corporation,” which is a government agency that gives tax breaks and subsidies to particular corporations or developers selected by political appointees on the entity's board, for projects meeting extremely broad "multi-modal commerce" criteria (basically, any form of goods-related commerce). Reportedly the new entity will probably be in Detroit. In December, 2013 the legislature enacted a law authorizing a sixth such entity, this in the Upper Peninsula.

Who Voted "Yes" and Who Voted "No"

Senate Bill 156, Reverse effect of Supreme Court business tax ruling: Passed 100 to 10 in the House

The House vote on the bill described above.

Who Voted "Yes" and Who Voted "No"

SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

Economic Freedom and Prosperity

Mackinac Center speaker in Oakland Press

Dean Stansel, an economics professor at Florida Gulf Coast University will give a speech on behalf of the Mackinac Center titled “Economic Freedom: What It Is and Why It Matters” at noon on Sept. 16 in Troy. The event is free and open to the public — more information can be found here.

He writes about the topic in the Oakland Press.

Americans’ satisfaction with their freedom to choose what they do in their lives has been on a steady decline in recent years, according to a recent Gallup poll.

Perhaps we feel less free because we are less free: economic freedom across the U.S. has been eroding since 2000, when we ranked second in the Economic Freedom of the World index. We now rank 17th. And, this decline has a huge negative impact on economic prosperity among all income levels — contributing to those feelings of lack of control that the surveys found among Americans.

The financial burden of supporting our government has skyrocketed, saddling taxpayers with the bill. While federal government spending has doubled since 2000 and tripled since 1990, the growth of personal income has lagged, rising by less than half since 2000. Making matters worse, 10 million Americans are unemployed and another 8 million are involuntarily working part-time.

Wright on Sunday Morning Program Talking RTW

Recent decision gives workers greater freedom

Patrick J. Wright, the Mackinac Center’s vice president for legal affairs, was a guest on “Let it Rip” on WJBK-TV2 in Detroit Sunday, discussing a labor law judge’s decision last week that, if upheld, will allow public-sector union members to leave their union at any time. Currently, several unions have arbitrary ‘windows’ that limit members’ freedom to certain times of the year.

September 5, 2014, MichiganVotes Weekly Report

Wolf hunts, golf carts and more licensure

Initiated Legislation 2, Preempt referendum banning wolf hunt: Passed 65 to 43 in the House

To preempt the effect of a referendum placed on the November ballot by interests opposed to wolf hunting. Specifically, this measure (Initiated Legislation 2) - which was sponsored by groups in favor of a wolf hunt - would make “referendum-proof” a 2013 law giving the legislature and Natural Resources Commission exclusive authority to decide which species may be hunted in Michigan. It would do so by making a small change to that law and adding a modest appropriation, which under a 2001 Supreme Court ruling makes the law not subject to referendum. The Senate passed this measure (Initiated Legislation 2) on Aug. 13, and with this House vote the no-wolf hunt measure on the November 2014 ballot will not go into effect, even if a majority of voters approve it.

Who Voted "Yes" and Who Voted "No"

House Bill 5045, Allow local governments to permit golf carts on streets: Passed 103 to 5 in the House

To allow cities, villages and townships with fewer than 30,000 residents to permit the daytime operation of golf carts on streets. A local government could require registration but could not charge a fee for this. However, a county commission could override a municipality's decision and prohibit golf carts on streets.

Who Voted "Yes" and Who Voted "No"

Senate Bill 92, Impose licensure on pharmacy assistants: Passed 101 to 7 in the House

To impose licensure and regulation on "pharmacy technicians" (assistants), with license fees, continuing education requirements, test-taking mandates and more.

Who Voted "Yes" and Who Voted "No"

SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

Disdain for Politics Gov. Snyder's Undoing?

An analysis of the gubernatorial race

It is time to reassess Michigan’s gubernatorial race; and flipping a coin might be the best approach to picking the winner. Polls show Gov. Rick Snyder and Democratic challenger former Congressman Mark Schauer neck and neck with Gov. Snyder’s momentum heading downward.

Maybe Gov. Snyder – said by some to be the smartest man in the room – knows precisely what he’s doing. Maybe his advisers have spotted something encouraging in the polling numbers others have missed, but the governor has slipped into a dead heat after being the favorite to win re-election only a few weeks ago.

Gov. Snyder’s problems appear to be multiplying and to a large extent self-inflicted. He has always displayed contempt for letting political expediency impact his decisions. Now, after repeatedly ignoring time-tested political considerations, his re-election is in jeopardy.

When asked if leaders should allow political factors to influence policy, most voters would reply with a resounding “no.” But in reality their assessment of leaders who pay no attention to politics depends on whether they agree or disagree with the result. If they disagree with the policy decision, they’ll usually argue that the leader has defied the will of the voters, or at least an important segment of voters. In other words, voters often want and expect their leaders to consider the political ramifications of their actions.

Upon taking office Gov. Snyder claimed he wanted to change the culture in Lansing. At first, it looked like he was setting about doing so. As time passed, however, his decisions increasingly reflected the very culture he had said needed to be changed. This alone probably wouldn’t have threatened his re-election. But his neglect of the counterweight that traditionally keeps that culture in check just might.

The culture of Lansing is a deeply imbedded government-centric perspective pervading the 10-block radius of the Capitol. From this perspective, the well-being of government and the special interests attached to government is the overriding priority. One element alone mitigates and disciplines this government-centered culture, and that is a healthy fear of voters’ reactions. Leaders must balance the political impact of their decisions along with other considerations; repeatedly failing to do so shuts the voters out of the process. Gov. Snyder may have crossed this line once or twice too often.

During his first year in office, Gov. Snyder rearranged Michigan’s tax and revenue structure. This included the elimination of the tax exemption for pensions – or as it was called “the pension tax.” When the change occurred, many assumed Gov. Snyder would eventually follow up with some kind of general tax cut to remedy any negative long-term political impact. He never did this and is suffering the consequences.

Polling now shows the “pension tax” cutting into his support among senior citizens, a large number of which were not affected by the change, but mistakenly believe they were.

In 2013, Gov. Snyder wanted Medicaid expansion. Polls showed that a majority of Republican voters opposed it. His message could have been that President Barack Obama left him with two bad choices and he’d decided Medicaid expansion was the lesser evil of the two.

Rather than adopting this message, the one chosen was a virtual mirror image of the president’s Obamacare rhetoric. Use of this message was like rubbing salt in the wounds of the political right; unnecessarily intensifying bitterness over the issue.

In June, Gov. Snyder sought to double the state’s fuel tax to create a new revenue stream for fixing and maintaining the roads. The impetus for this came from a coalition of nearly every special interest group in Lansing. Most of these groups had just had their individual priorities taken care of with passage of a $52 billion budget.

Common political sense would advise against attempting to double the fuel tax six months prior to a general election. Taking at least some of the sought-after funds from the budget first might have been politically advisable as well. But the culture in Lansing said: “damn the torpedoes, we want it all now.” Apparently throwing political considerations to the wind, the governor pursued the doomed effort. In the end, all that was accomplished was a magnification of his inability to find a more politically acceptable approach.

In the spring of this election year a group of large businesses and business groups joined in urging the Legislature to expand Michigan’s anti-discrimination Elliott-Larsen Civil Rights Act to include sexual orientation. To many social conservatives, that is a step toward recognition of gay marriage. With friends like these business interests, Gov. Snyder has no need of enemies.

Reluctantly drawn into the debate, he lent his support to adding sexual orientation to the law, risking alienation of an important voting block he might otherwise have counted on. Suggesting the possible change to the Act be placed on the ballot and decided by the voters would have been a politically safer position for him to have taken.

Recent polling shows Gov. Snyder’s support among Republicans has slipped to just 82 percent. Meanwhile, Schauer is undoubtedly beginning to convince potential financial supporters that his gubernatorial bid is worth backing.

(Editor’s note: Jack Spencer is Capitol Affairs Specialist for Michigan Capitol Confidential and a veteran Lansing-based journalist. His columns do not necessarily represent the views of the Mackinac Center for Public Policy or Michigan Capitol Confidential.)