One Step Toward 'Reinventing' Michigan

Governor, Legislature can embrace innovation

By Michael Van Beek | December 9, 2014

Over the past four years, there’s been a lot of talk about “reinventing” Michigan. Gov. Rick Snyder and this Legislature have made significant strides toward that goal by improving the state’s tax structure, modernizing education policies and beginning to revamp the state’s regulatory regime. On that last item there is more to be done. House Bill 5951 would embrace innovative ride-sharing technologies used by companies such as Uber and Lyft.

HB 5951, introduced by Rep. Tim Kelly, R-Saginaw Twp., would create a state-based regulatory framework for these so-called transportation network companies. The version of the bill passed out of a House committee last week would create reasonable requirements that strive to uphold the safety of drivers and riders. For instance, all drivers would need to be at least 21, undergo a thorough background check and be covered by a $1 million insurance policy. Additionally, all vehicles would need to get annual inspections by a Michigan-licensed auto mechanic.

Although statewide regulations can sometimes thwart disruptive innovations such as these, the proposed rules appear to be an improvement over the ones developed at the local level. For instance, Ann Arbor and Detroit do not appear to have figured out how to handle Uber and Lyft yet, with Ann Arbor trying to shut them down this past summer and Detroit threatening to do likewise. Rep. Kelly’s bill would prevent local governments from further overregulating ride-sharing companies, creating an opportunity for all Michiganders to benefit from these car services.

Establishing a welcoming environment for ride-sharing companies would position Michigan uniquely as a national leader in embracing technological innovations and investments. Unfortunately, the state recently took a step backward when it created new barriers for innovative automobile companies to do business here. Some car manufacturers, such as Tesla, would like to sell directly to consumers, but a recently passed state law jeopardizes its ability to do so. It’s obvious how this benefits car dealerships but unclear how it helps consumers.

If this state really is going to be “reinvented” and become “Michigan 3.0,” it will need to embrace disruptive change and the technological innovations that drive it. The state swung and missed on Tesla, surrendering to entrenched special interests and raising the cost of Michiganders enjoying the benefits of electric cars. But Gov. Snyder and the Legislature have another at bat. Here’s hoping for a different outcome this time around.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

State School Board President Cites Funding 'Facts' That Ignore Billions in Spending

John Austin says board will rely on other information if disputed study is not 'most accurate'

By Tom Gantert | December 9, 2014

A Nov. 12 memo by State Board of Education President John Austin cited a report issued by a liberal think tank to support the claim that Michigan schools are receiving less money. Austin now says he will "take a look at” the report he cited, which fails to account for billions of dollars that Michigan schools receive.

The analysis from the Center on Budget and Policy Priorities failed to include about $10 billion of the $19.6 billion from different revenue sources that comprise the annual public school budget. The report also ignores several billion dollars directly from state sources.

In an email, Austin said his memo was only a draft, not final, and hadn’t been approved by the board. He said he would examine the CBPP’s report and would not rely on it if it was found to not be the most accurate.

In the draft memo, Austin began, “Some facts may be agreed upon:”

Then, in his second bullet-point Austin wrote, “In real-inflation dollars Michigan is spending 9% less in state dollars on public education than in 2008,” with a footnote citing the CPBB report as his authority for the claim.

Audrey Spalding, education policy director at the Mackinac Center for Public Policy, said Austin had cited an incomplete study “that has been repeatedly debunked as a poor source of information for Michigan school spending information – because it ignores billions of dollars. The Citizens Research Council, in its presentation to the State Board, noted that inflation-adjusted state funding for schools has continued to increase over time.”

Austin said in his email that the draft memo had acknowledged there are contentious debates over school funding, and the board would rely on analysis from organizations “that critics would have a hard time disputing” like the Citizens Research Council and The Center for Michigan.

Referring to a very similar CBPP report issued in 2012, spokeswoman Shannon Spillane said their analysis focused only on the state formula funding because it was the dominant stream of state funding for local districts, and it also allowed for consistent comparisons across states. But the Michigan’s per-pupil “foundation allowance” referred to in their report does not include certain local and state funding streams, and does not include any federal dollars.

A 2013 Michigan Capitol Confidential commentary by Spalding exposed these and other serious flaws in the CBPP’s reports on school funding.