News Story

Court of Claims Tosses MEA's Right-to-Work Lawsuit

State Capitol was closed when union protesters pushed past guards, impeded medical workers

The Michigan Court of Claims dismissed a lawsuit by the Michigan Education Association that claimed the State Legislature violated the Open Meetings Act when they passed the right-to-work law in 2012 while the Capitol building had been closed for a time due to protesters.

Judge Deborah A. Servitto made the ruling Friday.

The judge’s ruling stated: “The temporary cessation of admission to the Capitol building did not impair the rights of the public as a whole. The public and the media were present in spite of the closure and were able to observe directly and through media coverage.” The ruling also stated that the right-to-work bill was not passed while the Capitol building was closed.

“It is amazing what Steve Cook of the MEA and the other labor unions tried to do,” said Derk Wilcox, an attorney for the Mackinac Center for Public Policy. “What the court found was that the union protesters pushed past guards, trespassed through windows, and impeded the evacuation of someone who needed medical attention. Because of this the state police closed the Capitol building once it was already full. That the protesters did this to block legislation that they didn't like was bad enough, but then trying to invalidate the legislation because of the problems they caused is even worse. They tried to exercise a ‘rioters' veto’ over the legislative process. The court saw through this and summarily dismissed the unions' claims.”

The Michigan Education Association didn’t respond to a request for comment. The Michigan State AFL-CIO, Michigan Building & Construction Trades Council, AFL-CIO and Change To Win were also plaintiffs.

The court found that on Dec. 6 at about 12:05 p.m., the state police ordered the Capitol building closed. A group of protesters had pushed past uniformed state police officers and Capitol security. Troopers used pepper spray to try to keep control. Eight people were arrested. The state police were worried people could get trampled, or fall over the railing in the rotunda or the protesters would forcibly take control of the House and Senate chambers. At 12:30 p.m. the state police received more reports of protesters trying to rush the Senate chamber. At 1 p.m., there was a medical emergency involving a woman outside the Senate chamber. But access to her was impeded by protesters, the court found. The woman was transported across the Senate floor because a large number of people were blocking access to the Senate chamber. At 2:45 p.m., police were told that protesters were trying to get into the Capitol from the ground-floor windows. At 4:38 p.m, the Capitol was reopened. The right-to-work law was passed at 7:30 p.m.

"This frivolous waste of union members' hard-earned dues money was a futile attempt to turn back the clock to the now-discredited practice of discriminating against and firing employees who choose not to join or financially support a private labor organization,” said Rep. Gary Glenn, R-Midland, in a press release. “Hopefully, the judge's dismissal puts an end to union officials' misguided attempt to strip employees of their individual freedom and rights of conscience on the job."

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.

News Story

The Myth of a Spreading ‘Tax Cut Fever’

There are allegations that Michigan lawmakers are suffering a bout of “tax cut fever” that has slashed taxes over the decade. These accusations are a way of degrading the intentions of people who would rather keep more of their money than be forced to give it to Lansing. Considering the state’s financial situation, there is more of an outbreak of tax cut phobia than fever.

The state is on its fifth year of an economic recovery that drove up tax revenue. Income tax revenues are collecting $3 billion more than they did just four years ago. Preliminary revenue estimates show another $1.4 billion in tax revenue for the upcoming fiscal year above fiscal year 2014.

Moreover, to say that policymakers have been cutting taxes like it’s going out of style relies on a bad definition over what constitutes a tax cut.

Some say it includes subsidies to selected businesses in the form of refundable tax credits. The treasury will have less net revenue because of these incentives. But in order to give out money in these tax credits, government must raise tax money elsewhere.

By increasing a tax credit somewhere, the state would still be extracting just as much revenue from the general taxpayer. Giving out subsidies through film credits, for instance, may mean less revenue for Lansing, but it matters little to taxpayers who still have to finance those expenditures.

The most extreme example is in the Michigan Business Tax. This “tax” is only filed by companies that have received special tax credits. Because of this, it does not raise revenue — it pays it out. The state expects that it will have paid out $734 million to those tax filers in fiscal year 2014. In order to pay out these credits, this money has to come from other taxpayers.

The difference will be important in the upcoming sales tax ballot proposal. Part of the package will ask voters to increase in the Earned Income Tax Credit. This has been promoted as “tax relief.” The credit will deliver cash from general taxpayers to those filers who have low incomes and children, regardless of their tax burdens.  Often, these credits deliver more cash than the recipients’ tax liabilities. This is taxpayer-financed assistance and qualitatively different from easing tax burdens.

Moreover, allegations that legislators have “tax cut fever” ignore the state’s tax increases from the past decade.

The state increased its personal income taxes in 2007 from 3.9 percent to 4.35 percent. This was initially a temporary tax increase that was made perpetual in 2012 after phasing down to 4.25 percent.

The state also increased its business taxes by 22 percent in 2007.

When it comes to easing the burden of taxation, only the move from the Michigan Business Tax to the Corporate Income Tax applies.

So over the decade, it’s 2-1 in favor of tax rate hikes. It is strange to say that Michigan legislators have been suffering from a tax cut fever.

But the state has also changed some of its broad-based exemptions over the period that some may consider tax cuts and tax hikes.

The 2011 tax reforms took away exemptions for pension income, and reduced and eliminated a number of smaller exemptions.

Proposal 1 of 2014 eliminated personal property taxes on small business establishments and will phase out these taxes on industrial businesses. These taxes will still remain unmitigated for larger commercial entities and utility providers, and even industrial businesses benefiting from these reductions will still pay some taxes on their business equipment.

Even including these changes for exemptions, the story of Michigan’s past decade is one of tax increases and not “tax cut fever.”

Yet calling it an illness denigrates the intentions of the people who support lower taxes. Finding ways for governments to spend less and let people keep more of their earnings is a noble cause. Those who want this ought not to have their intentions written off as pathological. Especially when reducing taxes is an affordable option.

#####

James Hohman is assistant director of fiscal policy at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

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.