Despite evidence that a majority of union members support the right of a worker to opt out of union membership and dues, a sizable majority of the Michigan House of Representatives recently rejected an amendment that would have turned Michigan into a right-to-work state.

According to the MIRS Capitol Capsule daily newsletter (www.mirsnews.com - subscription required), House Bill 4454, introduced by state Rep. Jack Hoogendyk, R-Portage, would "give workers in a union shop an opt-out of participating or paying dues to a union." Since it was unlikely that this right-to-work bill would be taken up for consideration by the Democratic majority in the state House, state Rep. Arlan Meekof, R-West Olive, on Sept. 16 sponsored an amendment to tie-bar House Bill 4454 to House Bill 6256.

Attaching a tie-bar would have meant that the latter bill would not become law unless the former one was approved as well. Tie-bars are sometimes used as a means of forcing lawmakers to support legislation that they do not want as a condition of getting votes for bills that they do want.

House Bill 6256 was one bill in a larger package of legislation that would "add a number of requirements for nursing home licensees and applicants for nursing home licenses," according to a House Fiscal Agency memo. The Democratic leadership of the House supported passage of the nursing home bills, while the Health Care Association of Michigan and the Michigan Association of Homes and Services for the Aging both opposed them. Michiganvotes.org and MIRS each note that the bills were introduced after the Service Employees International Union opposed a private equity fund's attempt to purchase 28 Michigan nursing homes.

Rep. Meekof's right-to-work tie-bar was defeated on a vote of 69-35. MIRS noted afterward that "Republicans won a chance to vote on a right to work amendment today, but watched 14 of their colleagues vote against the measure and three others not vote one way or the other." With 56 votes needed for a majority in the 110-member chamber, 14 Republicans joined 55 Democrats in opposition. All 35 votes in favor of the right-to-work tie-bar came from Republicans.

One of the 14 Republican opposition votes, Rep. Brian Palmer, R-Bruce Twp., noted later in the House Journal that he had made a mistake:

"I inadvertently cast a vote opposing this amendment. I am a strong supporter of right-to-work, and giving workers choice, and believe that it is one of the cornerstones for an economic turnaround in Michigan. In fact, I am a co-sponsor of HB 4454, which is the subject of this amendment. I give my sincere apology to the maker of this amendment, and for any inconvenience this may have caused."

A 2007 Mackinac Center for Public Policy report on the potential economic impact of a right-to-work law supports the idea that a right-to-work law would benefit the state. Authored by Paul Kersey, the Center's director of labor policy, the report revealed a strong correlation between right-to-work protections and several measures of prosperity. It examines the five-year period between 2001 and 2006 and finds that the average increase in gross state product for right-to-work states was 18.1 percent. The GSP growth over the same years for non-right-to-work states was 13.6 percent, and for Michigan just 3.4 percent. 

Likewise, employment growth for the average right-to-work state during the period was 6.4 percent, compared to just 2.9 percent for non-right-to-work states and an employment decline of 4.8 percent for Michigan.

Along with this contracting employment, the report also observes that Michigan's wages have been declining relative to the right-to-work states. The per-capita disposable personal income of five right-to-work states — Florida, Kansas, Nebraska, South Dakota and Texas — passed that of Michigan during the 2001 through 2006 period. If this pace of decline relative to the right-to-work states continues, Kersey projects that by 2010 the average Michigan resident could also have less disposable income than their fellow Americans in Alabama, Iowa, Louisiana, North Dakota, Oklahoma and Tennessee — all right-to-work states.

Kersey's report is an update on a study done for the Center in 2002 by Dr. William T. Wilson. Wilson examined the period between 1970 and 2000 and found similar trends.

Despite the rejection of a right-to-work law in the Michigan House, public opinion surveys continue to show support for the policy change. A 2002 survey of Michigan voters found a 62 to 22 percent advantage in favor of implementing a statewide right-to-work law. More recently, and tellingly, a 2004 nationwide survey of 703 self-identified union members done by Zogby International revealed that 63 percent believed it was "unfair for a worker to lose their job if he or she refuses to pay dues to, or support, a union." 

The MichiganVotes.org vote tally for Rep. Meekof's right-to-work amendment is below. Contact information can be found here.

For additional information and an opportunity to comment on this issue, please see www.mackinac.org/9955.

On Sept. 18, the Michigan Legislature overwhelmingly approved Senate Bill 213, which mandates that by 2015 electricity suppliers acquire at least 10 percent of their power from "clean" and "renewable" sources and pass along the additional costs to their customers.

In addition to wind and solar, the alternative power sources allowed under the mandate include biomass, geothermal, and more, but not nuclear energy, which already accounts for almost 26 percent of the electricity generated in Michigan and produces none of the carbon emissions that some believe cause a harmful rise in global temperatures. (The new law would also allow for some restricted use of clean coal technology to meet the mandate.)

To offset anticipated cost increases from the alternative energy mandate, the electric utilities, whose prices are regulated by the Michigan Public Service Commission, would be permitted to hike rates by as much as $3 per month on residential customers, $16.58 per month for small businesses and $187.50 per month for larger business customers. Some of the residential customers could take advantage of a temporary and partial income tax credit to help offset these increases. The legislation gives the MPSC the authority to defer the mandate if the commission decides that the cost imposed on the utilities is too high.

Government mandates would not be necessary if renewable energy sources were abundant and cost-effective, according to "Proposals to Further Regulate Michigan's Electricity Market," a policy brief published by the Mackinac Center in May. Co-authored by Center adjunct scholars Diane S. Katz and Dr. Theodore Bolema, J.D., the report quotes an energy industry representative: "Fossil units and nuclear power have a huge inherent cost and deliverability advantage over renewables due to the concentrated energy in the fuel compared to the diffuse and variable energy of wind, solar and hydro."

Quite literally, energy that is 'blowin' in the wind' is much more difficult and expensive to collect and convert into electricity than energy that is already stored in small, dense packages.

Katz and Bolema also point out that economic and energy experts disagree regarding how much electrical generation capacity Michigan is going to need over the coming decade. The brief cites a recent report from the former MPSC chairman that projects a 1.3 percent annual growth in power needs through 2025. This new estimate had been cut 40 percent from what the MPSC projected just one year earlier.

Other observers predict even less usage. The authors note a December 2006 report created for the Michigan House of Representatives by the Anderson Economic Group that projected Michigan's existing capacity would be "adequate" to meet future needs. And Mackinac Center Senior Economist David Littmann, former senior economist for Comerica Bank and a veteran expert on Michigan's economy, is estimating that the state's ongoing loss of jobs, income and population will lead to a net reduction in electricity demand.

Regardless of whether just a little bit of extra power is needed or none at all, Senate Bill 213 may increase the cost of keeping the lights on if government mandates are permitted to replace market decisions regarding electricity generation.

Moreover, if the proponents of the mandate seek a smaller "carbon footprint" for Michigan's electricity industry, then they have excluded one of the most economically viable energy alternatives for bringing about this goal. Nuclear power produces zero carbon emissions and already supplies more than one-quarter of Michigan's electricity with just three power plants. Many developed economies, such as France and Sweden, acquire a substantially larger share of their power from nuclear energy: 77 percent of France's electric power comes from 59 nuclear reactors.

But if more electricity were generated from nuclear fuel, it would not count as part of the 10 percent renewable mandate created by Senate Bill 213.

Senate Bill 213 was tie-barred to House Bill 5524, which mandated additional changes to Michigan's energy laws. A tie-bar means that one bill could not become law without the other. This second bill was a complicated mix of alterations that both reform and restrict market competition. Michiganvotes.org describes the bill as such:

"...would mostly end the state's electric competition law that allows customers to choose an alternative provider; allow the utilities to impose surcharges on customers so they can recoup the 'costs' incurred from Michigan's experiment with competitive electricity markets; and phase out over five years the current cross-subsidization of residential customers by commercial and industrial ones. The bill would guarantee DTE and Consumers Power at least 90 percent of the utility business in the areas they serve, even if other providers offer lower prices."

According to Katz and Bolema, Michigan's "experiment with electricity competition" coincided with substantial cost savings for ratepayers. Four years after other suppliers entered Michigan's consumer electricity market, prices had fallen by 2 percent, even though prices nationwide increased by about 12 percent. The lower rates drove Michigan electricity costs below the national average, saving businesses and schools millions of dollars. The authors recommend that this experiment be continued and that other distortions in the electricity market be removed as well.

Hillsdale College economics professor Gary Wolfram, a spokesperson for the competitive energy providers, asserted that House Bill 5524 is "primarily designed to provide a monopoly of energy production for Detroit Edison and Consumers Energy."

However, there is a pro-market reform contained in the bill that removes the discriminatory practice of forcing artificially higher rates on commercial customers to subsidize artificially low rates for residential customers. The Michigan Chamber of Commerce asserts that this bias had been in place for 30 years and essentially acted as a $350 million tax on Michigan employers. The Mackinac Center report recommended removing this market distortion, pointing out that it not only impeded proper market competition, but also discouraged energy conservation amongst residential customers.

House Bill 5524 ends this policy, known as "rate-skewing," over a five-year period, and is thus one reason why the Michigan Chamber, some other business groups and perhaps some lawmakers supported passage of this bill.

Senate Bill 213-the renewable energy mandate-was supported by 28 Republicans and 55 Democrats in the House of Representatives. Twenty-four House lawmakers, all Republicans, voted in opposition.

In the Senate, all 17 Democrats voted for the renewable energy mandate, along with 12 Republicans. Ten Republicans voted against the bill.

The renewable energy mandate became Public Act 295 of 2008 when it was signed into law by Gov. Jennifer Granholm on Oct. 6.

The Michiganvotes.org vote tally for Senate Bill 213 is below. The contact information for all lawmakers can be found here.

For additional information and an opportunity to comment on this issue, please see www.mackinac.org/9955.