For Immediate Release
Monday, Aug. 8, 2011
Contact: Patrick J. Wright
Director, Mackinac Center Legal Foundation
or
Michael D. Jahr
Vice President for Communications, Mackinac Center for Public Policy
989-631-0900

MIDLAND — The Michigan Employment Relations Commission this morning rejected by a 3-0 vote a petition by the Graduate Employees Organization to unionize graduate student research assistants at the University of Michigan. In delivering the decision, MERC cited a 1981 ruling in which it had already held that these students were not public employees and were therefore outside its jurisdiction.

Mackinac Center Legal Foundation Director Patrick J. Wright praised the decision as “a victory for the rule of law,” remarking: “MERC enforced the law, rather than allowing a politically divided U of M Board of Regents to bypass it through a hasty resolution. This resolution called for a public employee union election for a group of students who weren’t public employees in the first place. The regents have no legal authority to expand the statutory definition of public employees.”

The MCLF, citing the 1981 MERC precedent, had filed a motion with MERC on behalf of U of M graduate student research assistant Melinda Day. The motion sought to allow Day to participate in MERC’s deliberations on the union petition.

Responding to MERC’s ruling, Day said: “This is a welcome sign that not everyone is willing to toss aside the rights of students in order to appease special interests. The Board of Regents betrayed me and the rest of the graduate students they were supposed to defend, and our concerns were treated as either trivial or extremist. Now, both of the major Detroit newspapers and the Michigan Employment Relations Commission have agreed with U of M’s president: We’re not public employees, and we’re not subject to forced unionization.”

Wright noted that MERC, while upholding the MCLF’s primary argument, rejected the MCLF’s motion to participate in the deliberations. “But the ability to intervene is crucial,” he added. “As I told the commission at the hearing today, in some cases the public employer may choose to champion unionization when in fact the unionization is illegal, as we see here with the U of M Board of Regents or with the Granholm administration in the home-based day care union case. Individuals whose rights are about to be violated should have some platform at MERC to voice their objections and protect their rights before an illegal unionization takes place.”

Wright said he expects the union to file a motion for reconsideration at MERC or possibly to take the case to court. “If so,” he said, “the MCLF will continue the fight.”

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The Michigan Education Association has put up billboards criticizing Gov. Rick Snyder’s tax reform saying it created a “$1.8 billion tax break for rich CEOs.”

While it is true that all businesses will likely benefit from Snyder’s dumping of the much maligned Michigan Business Tax and the switchover to a Corporate Income Tax, those who lobby for Michigan’s small businesses at the state capitol say it is small businesses that are the biggest winners with the change. Furthermore, they argue that the bigger businesses are the ones targeted with the new 6-percent Corporate Income Tax.

The Michigan Business Tax, which will be replaced in January, would have raised $1.99 billion in 2012-13. The new Corporate Income Tax is expected to raise $780 million in 2012-13, according to James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

But C-Corporations, or those larger businesses that typically have stock and a board of directors, are the only businesses paying the Corporate Income Tax. C-Corps with gross receipts totaling $350,000 or less are exempt from the new tax.

“Small businesses are probably the biggest winners here,” Hohman said.

Two lobbyists who represent small businesses in Michigan agree.

“That’s a lie from the Left – ‘big, corporate CEOs are making out like bandits’,” said Charles Owens, state director of the National Federation of Independent Businesses, referencing the MEA billboards. “They actually aren’t. It is the small mom-and-pop and mid-sized businesses that are being incentivized. … If you look at the job creation numbers, that’s where all the jobs are coming from.”

The Small Business Association of Michigan considers the Corporate Income Tax to be the “one of the most significant tax reform efforts in this state in decades” because it creates relief for small businesses, said Dave Jessup, the director of government relations for SBAM.

“It doesn’t give preferential treatment to the large companies,” Jessup said.

Jessup said large businesses could be hurt by Snyder’s tax reform because a lot of the tax credits they received have been eliminated.

“In fact, if it hurts anyone, it’s the large C-Corps,” he said.

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See also:

Michigan Business Owner: Tax Reform Means 'Our Company Will Create Jobs'

Commentary: Courage, Cuts, K-12 and the Snyder Business Tax

Gov. Snyder v. Rachel Maddow