On Aug. 5, 2009, Sen. Jason Allen, R-Traverse City, introduced Senate Bill 731, which would give statutory cover to a scheme transferring approximately $6.6 million in taxpayer money annually to the SEIU government employee union, one of the parents of ACORN. This is accomplished by creating a shell government "employer" for some 42,000 individuals who are actually hired by elderly or disabled Medicaid recipients to provide personal care services in their homes. A Mackinac Center lawsuit is pending regarding a similar arrangement imposed on home day care providers.

Wendy Day of Common Sense in Government has reported on Facebook that Allen was the recipient of a $2,000 campaign contribution from the SEIU on June 22, six weeks before SB 731 was introduced. In another post she hints that introducing and passing the bill was part of a quid-pro-quo between Senate Republicans and the SEIU for union support of former state representative Mike Nofs in a November 2009 special election, which state Republican Party Chair Ron Weiser had characterized as among the party's top priorities. Day observes that the SEIU endorsed Nofs on August 22nd, two weeks after SB 731 was introduced, and sent four full-time workers to help on his campaign.

The predecessor organization of Common Sense in Government had organized volunteers for a door-to-door "lit drop" focused on Nofs in July, when he faced a challenger in the Republican primary election. They distributed flyers describing his voting record on fiscal issues, in particular his votes against measures opposed by the MEA teachers union.

Senate Bill 731 was co-sponsored by these Republican Senators:

Roger Kahn, Bruce Patterson, Valde Garcia, Tony Stamas, Judson Gilbert, Mark Jansen, Randy Richardville, and Patricia Birkholz.

It was also co-sponsored by the following Democratic Senators:

Raymond Basham, Martha Scott, Dennis Olshove, Irma Clark-Coleman, Michael Switalski, Gilda Jacobs, Deborah Cherry and Gretchen Whitmer.

SB 731's primary sponsor Sen. Jason Allen is more commonly identified as a leading promoter of a massive expansion in Michigan's corporate welfare empire (see his "economic development" bills, amendments and votes here).

Wendy Day and others have reported that Allen wants to bring SB 731 to a vote in the Senate Senior Citizens and Veterans Affairs Committee to which it was referred, and which he chairs. On Dec. 8, National Federation of Independent Business state Director Charles S. Owens circulated a letter that he had sent to Sen. Allen asking that he reconsider his support for the bill. Owens wrote, "We fail to understand why, in the midst of record unemployment and a dismal economy; anyone would seek to pursue policies of this nature that are anti-small business and anti-free enterprise.

Allen's desire to vote out SB 731 from his committee transforms it into a "really might pass" bill, rather than the much more common "Dead On Arrival" ones introduced merely to pander or posture for a particular special interest or group. If the bill passes the Republican Senate it will almost certainly be quickly endorsed by the Democratic House and signed into law by Gov. Jennifer Granholm.

That would make this the second transfer of taxpayer dollars to the SEIU to receive official blessing in recent weeks. In November the Michigan Economic Growth Authority approved a questionable $2 million subsidy to a for-profit subsidiary of the union, to be located in the House district represented by Speaker of the Michigan House Andy Dillon, D-Redford Township. (The $3.7 million taxpayer wealth transfer that's the subject of the Mackinac Center lawsuit benefits the UAW and AFSCME, two other politically powerful government employee unions.)

In an October press conference, Gov. Jennifer Granholm argued that tax hikes are necessary. "What we're fighting for is Michigan not becoming Mississippi," she said. (See related story, "Mississippi Not Burning.")

The rhetorical flourish is undermined by the reality that Mississippi is no longer the "small government = high poverty" foil that Michigan's political class has often used to justify keeping their government employee constituencies well-fed with more tax dollars.

Plus, Mississippi has a growing economy — a concept that has begun to seem exotic in this state.

The evidence on Mississippi's changing fortunes is complicated, but tells the tale nevertheless. Whether its relative tax burden can be considered low depends on what exactly is compared.

For example, because Mississippi has been relatively a poor state going all the way back to colonial times, its per capita tax burden remains relatively low today.

However, its tax burden per unit of economic output (as measured by state Gross Domestic Product) is the 13th highest (Michigan is 18th).

Also, it's the 12th highest in terms of total state and local government revenue as a percent of personal income (Michigan is 15th).

Overall, a ranking of the structure of state taxes by the Tax Foundation places Mississippi in 21st place (Michigan is in 17th place, thanks largely to its flat income tax and lack of local government sales taxes). In general, Mississippi has a moderate tax environment, and is hardly the epitome of small-government.

That said, unlike Michigan, Mississippi has experienced some growth in this decade:

Over the last five years, Mississippi ranked 18th in per capita personal income growth. Michigan was dead last.

Mississippi's real (inflation adjusted) Gross Domestic Product rose by 5 percent over the last five years. Michigan's lost 4 percent.

Mississippi payrolls grew by 2.9 percent between 2003 and 2008. Michigan's declined by 5.8 percent.

While Michigan's poverty rate increased by 9 percent since 2005, Mississippi's has stayed about the same. Mississippi still has the highest poverty rate, but unlike Michigan, it's not getting worse.

If Michigan's political class is worried that failing to impose higher tax burdens on residents will make us "like Mississippi," they can relax. On the other hand, if finding new ways to deliver more for less tax dollars helps Michigan rediscover something Mississippi has been enjoying — economic growth — they'll actually have something to boast about. 

James M. Hohman is the fiscal policy analyst at the Mackinac Center for public policy. He may be reached at hohman@mackinac.org.