Michigan's Earned Income Tax Credit is a welfare-like program that transfers income from taxpayers to low-income wage earners who have little or no state tax liability. The costs vs. benefits of the program are hotly debated, but no one disputes that it does provide a real if modest benefit to working poor families.

In contrast, there are heated disputes about the value of the even larger amounts this state spends on corporate welfare programs administered by the Michigan Economic Development Corporation — and there are good reasons to believe they are a waste of money. Lawmakers should keep this contrast in mind as they wrestle with the still-simmering road funding issue.

The House has passed a road funding plan that eliminates the state EITC and redirects $117 million currently spent on it to road repairs. The Senate is poised to do the same, with an EITC repeal bill reported from committee and pending on the floor.

The House plan also transfers $187 million from the MEDC's corporate welfare programs to road repairs. The Senate plan, however, does not touch MEDC funding.

Leaders in both bodies are seeking a compromise plan, and a good starting point would be to embrace the MEDC cuts of the House plan.

“Michigan shouldn’t cut social welfare to pay for roads until every possible dollar has been wrung from corporate welfare programs,” said Joe Lehman, president of Mackinac Center for Public Policy. “The MEDC consumes hundreds of millions of dollars but almost never meets its lofty job claims. The deals are cloaked in secrecy and mainly benefit a few favored recipients. Shifting that money to roads would do far more for economic development than most of what they’re doing now.”

Not surprisingly, House Democrats voted against the part of the road package that cuts the EITC. They also voted against the corporate welfare cuts, which is less surprising than many might imagine. However, while the EITC is a core issue for Democrats upon which they're unlikely to budge, cutting MEDC subsidies might be another matter.

Michigan Capitol Confidential recently asked House Democratic Leader Tim Greimel, D-Auburn Hills, about a potential road funding deal in which the EITC would not be cut in exchange for Democratic votes on significant MEDC cuts.

“I don’t want to dive into hypotheticals, but House Democrats have been clear that Michigan needs a long-term solution that dedicates real dollars to roads, and doesn’t rely on smoke-and-mirrors trickery,” Greimel said. “Savings from reforms and cuts at the MEDC can be a part of that solution, and it is imperative that we preserve the EITC and not unduly burden low- to middle-income families.”

“The Republican plan to gut the EITC in order to generate a small fraction of the funding needed for roads is shortsighted,” Greimel continued. “According to the Michigan League for Public Policy, the state’s earned income tax credit lifts 7,000 working families above the poverty line and brings tax relief to 820,000 working families statewide. We believe that major reforms are needed at the MEDC to ensure transparency and accountability and to rein in corporate welfare.

“Retaining the Earned Income Tax Credit is a top priority for our caucus,” Greimel concluded. “The EITC has long had bipartisan support across the country due to its proven effectiveness as an alternative to welfare that rewards low- to middle-income individuals who choose to work.”

For now it appears that legislative Democrats are on the outside looking in regarding road funding negotiations. If that changes, the distinction between their stances on protecting the EITC and cutting MEDC subsidies could become critical to striking a deal.

Editor's note: This story originally reported the Senate passed a road funding plan that eliminated the Earned Income Tax Credit. The Senate did pass a road funding plan but didn't eliminate the EITC.

State Rep. Amanda Price has prepared legislation with bipartisan support that among other things would hold more students back a grade if they have not attained grade-level proficiency in reading — but only after repeated “intervention” efforts starting as early as kindergarten. The bill has numerous exemptions, including one for special education students. If passed, it would go into effect in the 2016-17 school year.

Rep. Adam Zemke, D-Ann Arbor, co-sponsored what will be read in as House Bill 4822 when the House returns from a summer break on Aug. 18.

“Early literacy is the foundation of a strong education and a successful future,” Zemke said in a news release. “That is why this legislation, coupled with the recommendations of the governor’s task force and budgetary support, prioritizes literacy to help ensure that every young Michigander has an excellent opportunity to learn to read.”

Price, R-Park Township, said in a news release that the intervention programs begin at kindergarten and continue in first, second and third grades. An intervention would devote extra reading time for struggling students, assigning them to teachers who have been given the highest performance evaluations. It would also provide parents with a read-at-home plan, Price said.

Thirty percent of fourth graders were not proficient at reading in the fall of 2013 according to the Michigan Education Assessment Program (MEAP) test results. The fourth-grade tests indicate how well students are reading at the end of third grade.

Gary Naeyaert, the executive director of the Great Lakes Education Project, said the bill should not be characterized as “read or flunk.”

“That is not the focus of the bill,” he said.

Instead, Naeyaert said the focus is early intervention with schoolchildren as young as kindergarten age.

He said the bill allows for student to retake the state test, take an alternative test, or show proficiency through a portfolio of successful work. He added that it has provisions for English language learners, and special education students wouldn’t be subject to being held back.

“This is early screening, strategic intervention and parental notification and involvement,” Naeyaert said.

HB 4822 is expected to be referred to the House Committee on Education, Price said.

In 2013, a similar bill received a lot of reaction because it called for some students to be held back in third grade if they weren’t reading proficiently.