MICHIGAN NEWS

NOVEMBER 2011

MICHIGAN SHOULD LOWER ITS RENEWABLE STANDARD REQUIREMENTS TO ZERO
By Daniel Hager, Sept. 9, 2011

Clean, renewable energy will power America’s future. Or so we’ve been told. If such is the case, personal investing in the production of clean, renewable energy should be a sound wealth-enhancing strategy. Can we clean up on solar?

The recent bankruptcy of Massachusetts-based Evergreen Solar and the closing of its Midland, Mich., plant raise a cautionary flag. Subsequently a California company, Solyndra LLC, shut down with bankruptcy intentions and a reported job loss of 1,100. SunPower Corp., another California company, tallied a net loss of nearly $150 million for its latest quarter.

Let’s look instead at Energy Conversion Devices of Auburn Hills, a respected half-century-old pioneer in solar-based electricity generation. It is famed for its numerous breakthroughs in the field.

ECD’s stock price has fluctuated widely over the years, but recent history is more revealing as momentum has built for clean, renewable energy. The price was below $9 a share in early 2004 after being buffeted down from plus-$30 highs by the recession of a decade ago. Good time to buy? In early 2006 the price was above $50. But a slump followed and brought it down to about $23 in early 2008.

Perhaps a new rush was due by then. States were mandating renewable portfolio standards, forcing electricity providers to generate specified percentages of their total output from renewable energy sources. The Michigan RPS, enacted three years ago, is 10 percent by 2015.

ECD did well in 2008. By late summer its stock price was above $75 — more than a tripling in value in little more than half a year. Sky’s the limit, ride the wave up on renewable hope and hype?

Not so fast. The 70s were still pertinent in the ECD price through much of this past August — 70 cents. More tumbling has occurred since, down to 62 cents on Sept. 6. For ECD, the radiant solar future has yielded a present that makes it a penny stock.

Part of ECD’s problem appears to be unique; a slippage in competitiveness. The research firm Morningstar Inc. notes that ECD “has gone from an industry cost leader to inefficient laggard.”

The larger problem is the solar industry’s “global oversupply,” as a Solyndra press release put it. Several European nations have caused demand to slump by reducing solar subsidies because they realized such subsidies are unaffordable.

The core issue is that renewable energy is an unnatural, forced and politicized market. Politics is fickle and unpredictable. The government subsidies that may make an industry possible can vanish.

The subsidies are in place because renewable energy is so inefficient. Our ancestors grasped that shortcoming and abandoned renewables like wind and biomass at the first opportunity. The economic planning lobby has resurrected these outmoded forms in a highly questionable strategy. The capstone is the law authorizing the Michigan RPS, Public Act 295 of 2008. It is titled, with an exquisite touch of irony, “The Clean, Renewable and Efficient Energy Act.” The law promotes wind-based energy, which is a parody of efficiency. A wind turbine spends most of its working life as vibrant as a corpse.

The question arises why P.A. 295 provided for an RPS of 10 percent. Why not 8 percent, or 6 percent or 4.34 percent? The act presupposes that economic planners are wise enough to know what kind of energy future we must have. If so, the planners should have sufficient knowledge to guide us in the minutest detail to that future. The 10 percent figure suggests they simply landed on a convenient, round number. The conclusion to be drawn is that the economic planners are without sufficient knowledge to be economic planners.

The RPS, rooted in subsidized inefficiencies, is a sideshow that detracts from Michigan’s main mission of working to efficiently move back into prosperity. The smart thing for Michigan legislators to do is reduce the RPS to zero.

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Daniel Hager is an adjunct scholar with 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.

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AUGUST 2011

MICHIGAN PRESIDENTIAL PRIMARY SELECTION PROCESS

This year lays the foundation for one of the next fights for the future of our country with the election of a new president. In 2012 we have the opportunity to take our country back. The presidential election process is starting now with the determination of the primary selection process. Michigan needs to determine its selection process and the Michigan State Republican Party (MSRP) is set to vote on the process at the August 13-14 State Committee meeting.

The options are (summary provided to Policy Committee):

1. Open Primary. Election officials conduct elections according to the Michigan Election Code. No declaration of party preference required. No cost to the MRP.

2. Closed Primary. Election officials conduct elections according to the Michigan Election Code. Declaration of party preference required. Must confirm ability to conduct closed primary with Secretary of State and Attorney General. No cost to the MRP.

3. Caucus Site Elections. Local parties conduct election at political party - operating polling locations. Elections are conducted according to state party rule. 2012 presidential preference primary would become a beauty contest. Very costly to MRP.

4. State Convention. State convention delegates only vote for presidential candidates. Election is conducted according to state party rule. 2012 presidential preference primary would become a beauty contest. Some cost to MRP.

5. State Committee. State Committee elects presidential candidates. Election is conducted according to state party rule. 2012 presidential preference primary would become a beauty contest. Some cost to MRP.

6. Congressional District Committees. Congressional district committees elect presidential candidate. Election is conducted according to state party rule. 2012 presidential preference primary would become a beauty contest. Some cost to MRP.

7. County Executive Committees. County executive committees elect presidential candidate. Election is conducted according to state party rule. 2012 presidential preference primary would become a beauty contest. Some cost to MRP.

Based on current Michigan law, there will be an open primary at the end of February 2012. If the State Committee takes no action, this open primary will take place and Michigan Republicans will lose half of its votes at the national convention, in addition to other penalties. There can still be a primary but it must move to March, which requires the Michigan legislature to change the date. State Party must take action if we don’t want the RNC penalties applied to our delegation.

Each option has a cost, which are paid for by the state, the state party or local party organizations. Each process can be more favorable to one Presidential candidate over another, as a well funded candidate may favor a one method versus a candidate with less funding may favor a different one. There may be other benefits or consequences, including having Democrats influence our selection process.

These options have been described by the State Party to a member of the Policy Committee, which voted on July 12th to make a recommendation to the State Party Committee, on which Adam Hume is a member, and will be voting on August 13-14.

IOSCO COUNTY REPUBLICANS VOTE ON THEIR PREFERENCE

At the monthly meeting of the Iosco County Republicans on July 8, we considered the alternative methods of choosing our presidential nominee.

Both the open primary and closed primary would allow snowbirds to vote by absentee ballot and participate in the selection.  They would also allow Democrats to vote in the Republican primary.  Even under the the "closed" primary, the Democrats might have to register as a Republican for the primary, vote for the Republican nominee and vote Democrat for president.

While the caucus option was not discussed, these can be very complicated and involve a great deal of work to make certain that the caucus sites are staffed, the results tabulated and forwarded to the County and then State Parties.

The choice unanimously adopted at our meeting was to use county conventions as we now do to choose our lieutenant governor, secretary of state, attorney general, state department of education and university board candidates.

In this process, a county convention would be held in which people could run for delegate or alternate.  Preference, by State Party rules goes to precinct delegates and those who are present at the convention.  If more people wish to be delegates that slots that are available, attendees at the  county convention will vote for those that will be elected.  This has the benefit of helping develop county parties and getting people involved in their activities.  Our county has never filled all of its precinct delegate spots.  Giving them a preference in delegate selection would encourage people to run.  Once the County Party selects its delegates and alternates, they attend the State Convention.

The delegates to the State Convention will then select the presidential nominee.  It would probably take more than one ballot because of the number of candidates who seek nomination.  At the end, however, Michigan will have selected its presidential nominee and will choose delegates from the State Convention who will attend the National Republican Convention.

Adam Hume, our county chair will make our preference known at the next 1st District meeting.  He believes that quite a number of counties in the 1st District also favor the Convention route.

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JULY 2011

FLOOD INSURANCE MAY LEAVE YOU HIGH AND DRY

By Russ Harding, 5/25/2011

Property owners in the state may be in for an expensive surprise due to a federal government initiative they have probably never heard of, called the National Flood Insurance Program Map Modernization Initiative. The Federal Emergency Management Agency, in conjunction with the Michigan Department of Environmental Quality and county floodplain managers, are developing new floodplain maps.

If the community you live in is participating in the NFIP and if the map indicates that your property is located in a floodplain, expect to pay hundreds of dollars more per year for insurance if you have a federally insured mortgage. As with many government programs you have no choice as your lender will require the insurance.

The FEMA maps are supposed to indicate if your property is in a 100-year floodplain (a flood so severe that it occurs on average only once in 100 years). The problem is that the maps are usually constructed by a technician sitting in an office and looking at a contour map. For floodplain maps to be accurate they should be checked in the field.

A federal government that has spent itself broke is looking for more revenue; requiring more people to buy flood insurance seems like an easy way to generate more money for the government.

Property owners who believe their land has been inaccurately included in a floodplain will have to hire a licensed professional surveyor or engineer to accurately locate your property on the map and do an elevation survey. It’s not cheap, but will most likely save the property owner money in the long run compared to years of paying for flood insurance. It is important that property owners look out after their own interests as they should not rely on the government to have their best interest in mind.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.  http://www.mackinac.org

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JULY 2011

REAPPORTIONMENT MAPS

The Republican plans which will be submitted for approval for Congressional and State Senate and House Districts are shown.  They are expected to be adopted and signed into law.  From there, the Democrats will probably appeal.  Since Michigan is losing a Congressional seat, the districts in southern Michigan were redrawn to place Democrats Sander Levin and Gary Peters in the same District.  Iosco moves to the 5th District, which is represented by Democrat Dale Kildee. Iosco stays in the 36th Senate District.  Iosco also moves to the 106th House District which is now represented by Pete Pettalia.

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JUNE 2011

TRUST FUND BABY
By Russ Harding, 5/4/2011

The Michigan Natural Resources Trust Fund is funded from oil and gas royalties that have provided millions of dollars the state has used to purchase large tracts of lands. Those purchases have provided untold outdoor recreation opportunities for residents and visitors. A significant downside, however, is that public ownership effectively takes these lands off tax rolls. Traditionally, the state reimburses local units of government for the lost revenue using general fund money, even though Article IX of the state Constitution allows interest and earnings of the Natural Resource Trust Fund to be used to for these “payments in lieu of taxes” to local government.

Rep. Joel Johnson, R-Clare, has introduced House Bill 4577, which would direct that PILT money come from interest and earnings of the Natural Resource Trust Fund as provided for in the Constitution. One has to wonder why legislators have not already availed themselves of this opportunity to save money that can be used to help close the state’s budget deficit.

When state officials and lawmakers place more private land in public ownership, there is a cost to the taxpayers for that action. HB 4577 is a good start in addressing the consequences of the use of trust fund dollars to buy state land. This is just a start, however, and more will need to be done.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.

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MAY 2011

STATE DEBT ALERT! BEWARE MASSIVE BORROWING DISGUISED AS "LOTTERY PRIVATIZATION"
By Jack McHugh, April 23, 2011

In the past few days, politicians in the Republican-controlled Michigan Legislature have begun murmuring about “lottery privatization.” Don’t be misled, however – this has nothing to do with saving money by contracting out operation of the Michigan lottery to a private company.

The fact that the talk is coming from appropriations committee members angsting over spending cuts is suggestive of what’s really being contemplated:

Debt. Hundreds of millions or even billions of dollars of new borrowing that future Michigan taxpayers will have to repay.

The borrowing would be done by pledging to lenders some or all of the lottery revenue for years or even decades into the future. In return, the lenders would write up-front checks that the politicians could start spending right now.

As part of the scheme, a lender would also operate the lottery, just as in good-faith privatization programs, but that’s just cover. You can tell because, depending on the size of the loan, rather than flowing into the state Treasury, some or all of the future lottery revenue would go into the pockets of the operator to repay the interest and principle on the debt. Depending on the size of the loan, the amounts would be tens or hundreds of times more than the few millions a private company would earn each year for just managing the lottery.

The clincher is when the arrangement also involves turning over the operation for decades into the future. Hardly any legitimate management outsourcing contracts extend more than five years or so, at the end of which the state can choose to renew or not depending on the manager’s performance. Because of the debt owed in these loan-masquerading-as-privatization deals, the state has essentially no recourse if the lender/operator causes problems.

As for future taxpayers deprived of up to $700 million in annual lottery revenue that currently supports public schools — too bad: They have no representation in these borrow-and-spend discussions.

To be sure, the politicians will swear on stacks of Bibles that those big up-front loan proceeds will go right into an airtight “lockbox,” with ironclad guarantees to spend the money gradually and only for specified Really Important Things (specifically, educational things, since the state constitution earmarks lottery profits to schools). Many lawmakers will even believe it themselves as they assure taxpayers that this money will never be tapped for any other purpose. Unless, that is, during some future budget “crisis” a simple majority of lawmakers plus the governor agree that dipping in is easier than finding more spending cuts.

There are already quite a few such ‘lockboxes” enshrined in state statutes, called “restricted funds.” The Legislature never, ever taps these funds to cover other spending … never more than a few times a year, that is. (See also “How Fees Fuel Big Government.”)

Handing politicians pools containing hundreds of millions or billions of dollars is never a good idea. When the cost of doing so is massive interest and debt service payments imposed on taxpayers for decades to come, plus the loss of ongoing revenue from a lucrative source like the lottery, it's an even worse one.

Permission to reprint this article in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited. http://www.mackinac.org.

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MARCH 2011

GOV. SNYDER TO BREAK MICHIGAN'S MEGA HABIT
By Michael D. LaFaive, 1/28/2011

Although details are not yet clear, according to early reports Gov. Rick Snyder’s proposed Michigan Business Tax replacement appears to be good news for advocates of sound economic policy. Whatever the final details, lowering the tax burden on job providers and making the system much less complex will surely provide a boost for commerce in the Great Lakes State.

Arguably of equal importance, press reports are saying the governor’s proposal would also end the Michigan Economic Growth Authority’s selective corporate tax break and subsidy program, and the state film subsidies as well. Research by Mackinac Center analysts shows that, at best, MEGA creates no new net jobs, and it may actually destroy them.

Specifically, Mackinac Center scholars have performed two separate statistical analyses of MEGA, using different methodologies and time periods. A 2005 study found that for every $123,000 in tax credits offered by the program, just one construction job was created, all of which had disappeared after two years.

In 2009, the Center zeroed in on MEGA’s effect on manufacturing jobs, and discovered an apparent link — a negative one. That is, for every $1 million in tax credits actually earned by MEGA companies, 95 manufacturing jobs were lost in the counties where the recipient firms were located.

Two other organizations have performed detailed reviews of MEGA program. One also found it to be a job killer, at least relative to an alternative tax regime of lower overall taxes, and the other found modestly positive job creation, but with overall fiscal effects that were still negative.

If the early reports hold up, Gov. Snyder’s proposal appears to be a bold and fresh approach to tax policy in Michigan. Responding to the news, Mackinac Center President Joseph Lehman posed a regretful question: “Imagine how many of Michigan’s 858,800 lost jobs could have been saved if Gov. Snyder’s predecessors had done what he is doing now?”

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited. http://www.mackinac.org.

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SEPTEMBER 2010

 CONSTITUTIONAL CONVENTION WON'T FIX MICHIGAN'S PROBLEMS
By Joseph G. Lehman, April 13, 2010

On Nov. 2, Michigan voters will face Proposal 1, which will ask whether a convention should be held to rewrite Michigan's constitution. Although we can certainly improve that foundational document, most of Michigan's problems could be solved without rewriting it. Furthermore, there is no guarantee that a constitutional convention would fix, or even address, whatever problems might prompt voters to call the convention in the first place.

Proposal 1 will be on the ballot because the current constitution, passed in 1963, requires the question to appear automatically every 16 years, starting in 1978. That year, 77 percent of voters rejected the constitutional convention and 72 percent did likewise in 1994. Recent polling indicates voters may be more open to the idea this year, but they disapprove by more than 2-to-1 when told the cost could be as much as $45 million.

The fundamental purpose of the state constitution is to limit government’s ability to infringe on people’s rights.

Nevertheless, a few convention proponents have organized around specific reform ideas. Examples include lengthening legislative term limits, converting to a part-time Legislature, modifying selection of judges, altering the budget process, expanding water regulation, increasing taxation and more.

Others who have long sought specific changes in Michigan law are considering supporting a convention for the sake of their single issue. Some in the highly energized Tea Party movement wonder if a constitutional convention might let them effectively open the hood of state government and fix what's broken at a time when the state seems unable to cope with its alarming economic decline.

The problem is, that's not the way it would likely work. A constitutional convention is not like handing your car to a certified mechanic; it's more like giving it to 148 trained and untrained mechanics and letting them do anything a majority of them can agree to, including replacing your car with something much worse. After a lot of time, trouble and expense, you and fellow voters collectively choose between the mechanics' handiwork and exactly what you started with.

The passage of Proposal 1 would set a process in motion. Two elections — a partisan primary and a general — would be held by May 2011 to elect the 148 convention delegates, one from each state House and Senate district. They would convene by October, select their own officers and create their own rules. They'd meet in Lansing and could continue through July 2012. Whatever they produced would go to voters for approval within 90 days. If it passed by a simple majority, the new constitution would take effect.

Nothing about this process would address our problems any better than the current legislative system. Our most serious economic problems involve chronic overspending in the face of weakening state revenue, which is worsened by rising levels of taxation and regulation that drive people and businesses from the state.

If our current lawmakers can't fix that, it's not because the constitution prevents them from doing so. More likely it's because voters haven't yet held individual lawmakers responsible for reckless spending (although this may be changing). If voters aren't yet holding legislators accountable for spending, it's not clear how they would hold convention delegates accountable for potentially bigger decisions. The fundamental purpose of the state constitution is to limit government's ability to infringe on people's rights. Where constitutional changes are needed, the voter initiative process is a better alternative than a convention, which could be unlimited in scope and cost millions of taxpayer dollars.

Neither is there a convincing reason to believe convention delegates would be more capable than current legislators. Delegate elections would be highly partisan and influenced by the same special interests that dominate regular elections.

The prospect of rewriting a constitution could attract some truly exceptional, public-service minded candidates, but it would probably attract even more of those who would typically run for the Legislature, along with term-limited former lawmakers. It might especially draw highly charged, single-issue candidates whose priorities could make the convention agenda read like the contents of Pandora's box.

Michigan has serious problems, but they should be fixed without a constitutional convention. The problem with Michigan government isn't so much what's under the hood, it's what we're letting the driver get away with. If your teenage driver is irresponsible, no mechanic can change that. Instead, you need better control and accountability of the driver.

Joseph G. Lehman is president of 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.  http://www.mackinac.org

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JULY 2010

MICHIGAN TAXPAYERS HAVE ALREADY MADE COMPROMISES
By James M. Hohman | June 7, 2010

The Michigan Legislature recently passed reforms that slightly lower the cost of employing state and public school workers by requiring modest employee contributions for future retiree benefits. The reforms may be cited by legislators who want to enact a service tax, describing it as a "grand bargain" wherein both taxpayers and spending interests give a little and get a little. Unfortunately, the "grand bargain" is a lopsided compromise that will further burden taxpayers.

Since 2002, Michigan residents have seen four different tax increases: Hikes in income and business tax rates in 2007, and cigarette tax hikes in 2002 and 2004. These are in addition to other revenue enhancements, such as adding "driver responsibility fees" to traffic tickets and selling off future tobacco settlement revenues. Legislators have also reneged on promised phase-downs and phase-outs of income and business taxes. In return, the state received balanced budgets and not a whole lot else.

To the taxpayers, the only issue is the amount they are required to contribute. The state’s current policies make them pay more each year. The cost of government employees, however, keeps increasing. In fiscal 2002, state government spent $3.9 billion in wages and benefits for 60,000 employees. In fiscal 2008, the last year for which data is available, that cost had grown to $4.7 billion despite employing 9,300 fewer full-time equivalent employees.

On average, Michigan spends $93,039 per FTE state employee, up from $65,176 in 2002. State fiscal strains resulted in cuts to other areas of the budget, including university appropriations and local government revenue sharing, even as taxes were raised. But the level of pay and benefits of Michigan's government work force has only increased.

Few state employees receive a $93,039 salary, though. Insurance benefits and retirement costs require 30.5 cents of every dollar in state compensation, and they have grown substantially. Since fiscal 2002, the state's payments for retirement have nearly doubled (state retirement includes generous health benefits), while payments for health insurance have increased by 48 percent. Protecting the wages and benefits received by the state government work force has clearly been a priority for policymakers.

Public school budgets have been even more sheltered than have the state's employees from Michigan's decade-long economic downturn. From 2002 to 2008, cumulative revenues to school districts increased by 2.3 percent, adjusting for inflation. That may not sound like much, but at the same time, total private-sector earnings in Michigan — every private-sector paycheck, employer-paid benefit and dollar earned by a private business — fell 11.5 percent, adjusted for inflation. Public school enrollment over this time fell 3.4 percent. School spending has been detached from declines in both the student population and the economy.

If state and local governments (including school districts) were to bring the fringe benefits received by public-sector employees in line with those of the private sector, our calculations show the savings would equal $5.7 billion annually. This is more than enough to repeal all of the recent state tax hikes, eliminate the Michigan Business Tax and substantially lower any other state tax.

The differences between the compensation for Michigan's government employee and its private-sector taxpayers are unsustainable. Reform is critical. Policymakers are beginning to address the problem, but the current proposals fix only a fraction of the problem.

The savings from the proposals to require employee contributions to state pension systems are difficult to project. At best, the bills would save $400 million annually, which is substantial, but a far cry from the $5.7 billion gap now in place. At worst, the bills may actually cost taxpayers more through provisions that multiply pension benefits and mandate other retiree benefits.

There is constant talk in Lansing about the structure of public-employee benefits: what insurance coverage to offer, whether to pool benefits among various levels of government and whether government workers should be in a "defined-contribution" or a "defined-benefit" retirement system. But to the taxpayers, the only issue is the amount they are required to contribute. The state's current policies make them pay more each year.

Lately, those costs of compensation have increased without any votes from Lansing and with no public discussion. Public-employee expenses are treated as just another cost that taxpayers must bear. But taxpayers have given up much over the past eight years to shore up a broken system. Any public policy "bargain" appealing to "fairness" needs to address the unsustainable growth of public compensation. Addressing these costs would make a service tax unnecessary.

James M. Hohman is a fiscal policy analyst 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. www.mackinac.org

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JULY 2010

MICHIGAN DEPT. OF ED. MISCALCULATES AVERAGE TEACHER SALARY
Department corrects its error; revised figures available
By Michael Van Beek, June 2, 2010

The Michigan Department of Education improperly calculated the average public school teacher salary in the state for the last six years, reporting figures significantly lower than what is correct. Corrected figures for the past two years were recently released.

The teacher salary averages are published in MDE's "Bulletin 1014" report, which divides the total amount paid in salary to all teachers in the state by the number of teachers. The department, however, had included some charter school teachers in the second figure without adding their pay to the total salary amount. The math error produced a deflated average teacher salary from 2004 to 2009.

In 2004 the difference between the average salary reported by the MDE ($52,161) and the correct figure ($54,088) was $1,927, or 3.7 percent. The most recent 2009 report understates the correct salary amount by $3,551, or 6.1 percent.

Charter school teachers generally earn salaries that are considerably lower than those in conventional schools. When they are not included in the calculations the average salary for teachers in conventional districts is $62,556.

The MDE has issued a revised version of the 2009 report that correctly states that the average teacher salary for all teachers that year (conventional and charter) was $62,272, or $3,551 more than the $58,721 originally reported. The 2008 report has also been corrected.

The figures are important because they may be used to inform important policy decisions. For example, the Legislature recently debated a modest school employee pension reform proposed by Gov. Jennifer Granholm, and pensions are based on a teacher's final salary.

Michigan teachers command the highest salaries in the nation when taking into account state per capita personal income.

Reprinted by permission from Michigan Capitol Confidential, a publication of the Mackinac Center, www.mackinac.org.

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APRIL 2010

MICHIGAN'S COSTLY TAB FOR 'CAP-AND-TRADE'

By Tom Gantert, March 18, 2010

Rep. Henry Waxman, D-Calif.Cap-and-trade legislation will hit Michigan hard by 2030 if passed, costing the state as many as 91,000 jobs while raising residential energy costs as much as 60 percent and cutting a family's disposable income by as much as $1,400 a year, according to a new study.

The study was done by the American Council for Capital Formation, a Washington-based public policy research think tank. It analyzed the impact of the Waxman-Markey HR 2545 bill. That bill contains the "cap-and-trade" language. Cap-and-trade puts a cap on emissions — and energy consumption. Sources either lower their emissions, with the ability to trade any excess allowance not used, or they can exceed the cap and purchase more credits to cover that over usage.

"It's really all pain and no gain as far as our study shows," said Margo Thorning, one of the study's two authors and the senior vice president and chief economist of the ACCF.

The ACCF did a baseline study on Michigan without a cap-and-trade bill, and then compared that to what would happen if the climate legislation were passed.

The study's findings:

Michigan will have between 66,600 and 90,800 fewer jobs by 2030 if cap-and-trade legislation is passed. The job losses will be from lower industrial output due to higher energy prices, the high cost of complying with required emission cuts and greater competition from overseas manufacturers with lower energy costs.

Michigan's energy costs will go up by 2030. Gasoline prices will increase by 20 to 26 percent, electricity prices will increase up to 60 percent and natural gas prices will increase up to 79 percent.

Disposable income for families will be reduced between $883 and $1,435 per year by 2030.

Thorning is coming to Lansing on April 29 to give a more in-depth presentation on the study.

According to the study, cap-and-trade will slow Michigan's economic growth because the state's energy users will have to subsidize more expensive energy sources such as wind and solar power to quickly meet federal mandates.

Thorning said the negative impact economically will not result in any clear environmental benefit because larger developing countries aren't on the same cap-and-trade energy diet.

"The environment doesn't benefit unless China and India take on targets, and they haven't taken on targets," Thorning said. "Our small change will be swamped by the emerging countries who are growing and dependent upon fossil fuels."

The study is available at http://www.accf.org/media/docs/nam/2009/Michigan.pdf

Permission to reprint in whole or in part is hereby granted, provided that the Mackinac Center and the author are properly cited. http://www.mackinac.org/

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OCTOBER 2009

MACKINAC CENTER PUBLIC-INTEREST LAW FIRM FILES SUIT
Sept. 16, 2009
Contact: Patrick Wright Director, Mackinac Center Legal Foundation, or
Michael Jahr, Director of Communications 989-631-0900

LANSING — The Mackinac Center Legal Foundation, a newly created public-interest law firm, today filed suit against the Michigan Department of Human Services in a case where a “shell corporation” was established to shanghai more than 40,000 home-based day care business owners into a government employees union. On behalf of two owners, Sherry Loar and Dawn Ives, the MCLF filed an action at the Michigan Court of Appeals seeking to stop the DHS from improperly siphoning “union dues” out of state subsidy checks meant to provide assistance to low-income parents.

“The DHS, UAW and AFSCME have devised a scheme to siphon $3.7 million into union bank accounts,” said Wright. “They’ve done this by concocting a new government entity that they allege transforms 40,000 home-based private contractors into government employees and union members. If Sherry and Dawn are government employees simply because a few of their customers receive government aid, then doctors, landlords and independent grocers can’t be far behind.”

To achieve this massive increase in government employees, the DHS and unions appear to have created a shell corporation using an interlocal agreement between the agency and Mott Community College, a move that Wright criticized as extraconstitutional.

“If the state is determined to place these day care providers in a union, it needs an act of the Legislature,” said Wright. “Two government agencies cannot conjure up the power to change the law simply because they are working together.”

Both plaintiffs enjoy running their own businesses, and both provide an important service to parents and children in their community. They do not work for the state of Michigan, and aside from the parents who hire them, they do not work for an employer. Although they describe themselves as long-time union supporters, Loar and Ives were shocked last year when they received notification in the mail that they were considered dues-paying members of the Child Care Providers Together Michigan union.

“I’m not opposed to unions; everything has a place,” said Loar. “But when we enter my door, this is my home.”

A video that tells Loar and Ives’ story, as well as the complaint, legal brief, a backgrounder and other information related to the case, can be found at www.mackinac.org/9051.

The Mackinac Center Legal Foundation is a public-interest law firm that advances individual freedom and the rule of law in Michigan. Wright, who will continue as the Center’s senior legal analyst, explained that the Legal Foundation “will build upon the Center’s prior work of filing amicus briefs in strategic cases that allow the Mackinac Center to directly fight improper and illegal government activity.”

Reprinted by permission from the Mackinac Center.

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OCTOBER 2009

RELIANCE ON RENEWABLE MANDATES WILL COST, NOT CREATE JOBS
Russ Harding, Mackinac Center Senior Environmental Policy Analyst, August 31, 2009

MIDLAND - The adoption of "green energy" policy recommendations made in a recent report by the National Resources Defense Council would push Michigan's economy into a freefall, according to Mackinac Center for Public Policy energy analysts Russ Harding and Tom Tanton. The report, "Energy Future: A Green Energy Alternative for Michigan," claims that the state's future energy needs can simply and quickly be met through renewable sources that could save $3 billion in electricity costs over 20 years.

"The NRDC report has the luxury of avoiding the empirical evidence that renewable mandates and rejection of clean-coal energy strategies kill industry, cost jobs and wreak economic havoc," said Harding, referring to a March 2009 study released by Spain's Universidad Rey Juan Carlos. "The Energy Future report describes one side of a two-sided equation. We are promised green jobs if we rely solely on alternative energy to power our homes and factories. What we are not told is that for every green job created, we could lose at least two or three other jobs because of higher energy costs."

The URJC study reported that Spain's $36 billion renewable energy portfolio created only $10 billion of energy, effectively raising the country's comprehensive energy prices by 31 percent. Citing additional energy costs as high as 55 percent, several of Spain's largest industries subsequently moved operations to other countries.

While agreeing with the NRDC assessment that the Michigan Public Service Commission's predictions of increased power demand in Michigan are overstated, Harding and Tanton disagree with the conclusion that new baseload coal or nuclear power plants are not needed.

"Most of Michigan's large power plants are aging and need to be replaced with new, environmentally clean technology," said Harding. "Trying to keep the older plants running and supplementing them with wind and solar will lead to more pollution, not less."

The Mackinac Center recently contracted with Tanton, president of T2 and Associates and a senior fellow in energy studies at Pacific Research Institute, to research and write an analysis on energy policy for Michigan that will be published in early 2010.

"It's almost funny that NRDC would tout the world's oldest and most-expensive technologies like wind, sun and firewood as solutions to Michigan's 21st century future," said Tanton. "Mankind has advanced over the centuries by moving away from old, tired and diffuse energy forms. States like California that have already tried the NRDC approach continue to have the nation's highest utility rates and the lowest power quality, along with associated disastrous state budgets and economies.

"The NRDC approach has to rely on heavy subsidies and government mandates because the technologies have been left in the dust, not because they are 'infant' industries," Tanton continued. "If NRDC was as concerned about the human resources in Michigan as they are the natural resources, they would focus on technologies like nuclear, clean coal and Michigan's own vast reserves of natural gas, which can pave the way for an economic resurgence in Michigan."

Reprinted by permission from the Mackinac Center, www.mackinac.org, 989-631-0900

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MAY 2009

ATTEMPTS AT GOVERNMENT EFFICIENCY ARE MISGUIDED
By Russ Harding, Apr. 6, 2009

In response to Michigan's depressed economy and sinking state revenues, Gov. Jennifer Granholm announced in the State of the State address her intent to reduce the number of state agencies from 18 to eight. While the governor's goal to make government more efficient through department consolidation is laudable, it is likely to achieve little in savings and may make it more difficult for residents and businesses to benefit from timely decisions. Government reorganization seldom addresses the real issues of what functions government should perform. Rearranging the deck chairs of government functions is not the same as reducing or eliminating programs that are not essential to the safety and welfare of Michigan taxpayers.

I spent much of my career trying to make government more efficient as a manager of state natural resource and environmental programs for 35 years in four different states, culminating as director of the Michigan Department of Environmental Quality from its beginning in 1995 through 2002. I have come to the conclusion that while well-intentioned, most of my efforts to bring efficiencies to state government programs were wasted. My basic premise was wrong. While government certainly could be more efficient, what it needs most is downsizing. Eliminating unnecessary government programs is much harder work than shuffling programs between state departments. Perhaps that is why the governor and the Legislature continue to offer stopgap measures such as reorganization rather than real structural reform of state government.

Expanded and new government programs quickly acquire a political constituency that lobbies for their continued existence and often argues that programs need to be larger. These political constituencies vary from businesses that want incentives or subsidies to groups that want the government to support their particular agenda. Once government programs are in place it's very difficult to get rid of them when they underperform or fail completely to realize their intended goals. That is why as director of a state agency I was often reluctant to accept new federal money that invariably had strings attached to it. The Washington Post reports that a number of banks have refused to accept or are considering giving back federal bailout funds for that very reason.

If the governor wishes to effect meaningful government streamlining and savings, she need look no further than her own stated goal to return the state's wetlands program to the federal government, which is closer to actual government reform than is her plan to reorganize state departments. Wetland permitting is not a function that the state needs to perform. The federal government does wetland permitting in 48 other states and is capable of performing that function in Michigan. Gov. Granholm should stay the course she announced on the wetlands return as she will surely face opposition from special interest groups more interested in their particular cause than the overall good of the state.

Most taxpayers do not care how state government is organized, but they do care about what functions it performs. It is particularly critical that state government lives within its means at all times, but especially during an era of double-digit unemployment (Michigan is now at 12 percent, worst in the nation). It is impossible for Michigan to get its spending in line with projected state revenues without eliminating functions and programs.

While consolidating state departments is not a bad idea, the monetary savings will simply not be enough to balance the books. Relying on one-time federal stimulus dollars that raise expectations will only make the long-term problem worse when those funds disappear.

Gov. Granholm should follow the lead of other state governors who have wisely decided not to accept some federal stimulus funds. The time for substantial state restructuring is now. Lawmakers should review every state program to determine if it is essential to the safety and health of Michigan residents, and eliminate those programs that fail to meet these criteria. The alternative to reduced state spending is additional tax increases, which will only depress the state's economy more. What our byzantine and gargantuan state government needs is a demolition crew, not another interior decorator.

Russ Harding is director of the Property Rights Network 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.

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SEPTEMBER 2008

THE TRUTH BEHIND THE 'GOVERNMENT REFORM PROPOSAL'

Document on UAW Web Site Outlined Strategy for 'Changing the Rules of Politics in Michigan to Help Democrats'

The Mackinac Center for Public Policy has obtained a document outlining details of what would become the "Reform Michigan Government Now" ballot initiative. The document, in the form of a Microsoft PowerPoint presentation, bears the blunt title: "GOVERNMENT REFORM PROPOSAL: Changing the rules of politics in Michigan to help Democrats."

According to the UAW Region 1-C Web site where the document was originally found,[*] this presentation was given to local union officials at a leadership conference in late May or early June. UAW officials have not returned our calls, and both the presentation and a brief article that referred to the presentation have since been removed.

While it’s not clear who delivered the 34-slide presentation, it begins by painting a grim picture for the Democratic Party in Michigan. "Democrats have been reduced to a de-facto permanent legislative minority in Lansing, especially since 1990," the presentation begins. The document indicates that obtaining favorable Democratic districts would require Democratic control of Michigan's House, Senate, governor and Supreme Court. The "problem" is that the Democrats would be unlikely to control future redistricting, and without favorable redistricting another "Engler era" is "quite possible."

After asserting that Democrats are unlikely to achieve control of redistricting through conventional means, i.e. the democratic election of candidates, the presentation outlines a series of changes to remove "structural obstacles to Democratic control of state government." Among the goals are the establishment of a bipartisan commission to redraw legislative boundaries and the removal of two Supreme Court justices and seven Court of Appeals judges with the intent of establishing a partisan advantage.

To make these changes more palatable to the electorate, the presentation calls for them to be combined with other alterations to state government, including a reduction in lawmakers’ salaries, a decrease in legislative seats and reducing the number of executive branch departments, state boards and commissions. The amendments suggested in the PowerPoint presentation match up precisely with the terms of the "Reform Michigan Government Now" submitted for the November ballot and now under review by the State Board of Canvassers.

The document also includes polling data and a $4.9 million budget for passing the initiative, which is described as "less than half the cost of trying to beat an incumbent GOP Supreme Court Justice." The presentation concludes with the prediction that "[i]f the proposal passes, it will reduce the cost and increase the prospects of winning the State Legislature every cycle."

To the extent that this document is what it appears to be, it leaves little doubt that the Reform Michigan Government Now ballot initiative is a partisan power play. The most important features of the scheme are the redistricting commission and the removal of two Republicans from the Michigan Supreme Court. Nearly everything else in the proposal seems to be calculated to make the entire package more attractive to voters.

The Mackinac Center is a nonpartisan policy research organization committed to informing Michigan residents about the content and likely consequences of legislation and ballot proposals. While we have no objections to partisan politics as such, it is essential to call attention to partisan ploys that are presented as neutral good-government reforms.

The PowerPoint file also gives a troubling glimpse into the thinking of UAW officials. Rather than working to guide their members through a difficult economy, they appear to be pursuing a crassly partisan and breathtakingly cynical political maneuver. At a time when the auto industry in Michigan is undergoing difficult changes, the UAW would be well-advised to focus on its members and leave politics to the politicians.
 --------------------------------------------------------------------------------
[*] The PowerPoint presentation was originally discovered by Mackinac Center Labor Research Intern Jim Vote. That story is told in more detail in "An Intern's Service to Michigan."

Paul Kersey is director of labor policy for 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.

Note:  The Court of Appeals has taken the proposal off the ballot, but the sponsors of the proposal intend to appeal to the Supreme Court.

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MAY 2006

MICHIGAN IS A HIGH TAX STATE

                                     States Ranked by Total Taxes and Per Capita Amount: 2005

  
 Amounts in thousands.

Per capita amounts in dollars
Total tax      Total tax per capita
Rank State Amount Rank State Amount
           
  United States….. 648,606,245   United States…..             2,192.27
           
1 California….. 98,434,685 1 Vermont…..             3,600.16
2 New York….. 50,190,396 2 Hawaii…..             3,477.93
3 Florida….. 33,894,971 3 Wyoming…..             3,417.77
4 Texas….. 32,784,942 4 Connecticut…..             3,300.49
5 Pennsylvania….. 27,262,969 5 Delaware…..             3,228.79
6 Illinois….. 26,411,689 6 Minnesota…..             3,093.93
7 Michigan….. 24,340,487 7 Massachusetts…..             2,815.23
8 Ohio….. 24,006,560 8 Alaska…..             2,786.90
9 New Jersey….. 22,933,999 9 California…..             2,724.31
10 North Carolina….. 18,639,618 10 New Jersey…..             2,630.65
11 Massachusetts….. 18,014,681 11 New York…..             2,606.62
12 Virginia….. 15,918,847 12 Rhode Island…..             2,443.07
13 Minnesota….. 15,881,131 13 Wisconsin…..             2,429.96
14 Georgia….. 15,675,655 14 Maryland…..             2,410.23
15 Washington….. 14,839,634 15 Michigan…..             2,404.95
16 Maryland….. 13,497,281 16 West Virginia…..             2,367.17
17 Wisconsin….. 13,452,250 17 Washington…..             2,359.99
18 Indiana….. 12,853,976 18 Arkansas…..             2,357.84
19 Connecticut….. 11,584,728 19 Maine…..             2,323.12
20 Arizona….. 11,008,428 20 New Mexico…..             2,319.23
21 Tennessee….. 10,007,292 21 North Dakota…..             2,202.97
22 Missouri….. 9,543,814 22 Pennsylvania…..             2,193.32
23 Kentucky….. 9,090,882 23 Kentucky…..             2,178.50
24 Louisiana….. 8,638,674 24 Nebraska…..             2,158.36
25 Alabama….. 7,799,948 25 North Carolina…..             2,146.68
26 Colorado….. 7,648,456 26 Virginia…..             2,103.72
27 South Carolina….. 7,318,388 27 Ohio…..             2,094.08
28 Oklahoma….. 6,859,030 28 Nevada…..             2,074.72
29 Arkansas….. 6,552,449 29 Illinois…..             2,069.40
30 Oregon….. 6,522,665 30 Idaho…..             2,053.51
31 Iowa….. 5,750,629 31 Indiana…..             2,049.42
32 Kansas….. 5,598,700 32 Kansas…..             2,039.60
33 Mississippi….. 5,432,152 33 Iowa…..             1,938.85
34 Nevada….. 5,010,443 34 Oklahoma…..             1,933.21
35 Utah….. 4,686,381 35 Montana…..             1,910.14
36 New Mexico….. 4,471,477 36 Louisiana…..             1,909.52
37 Hawaii….. 4,434,356 37 Florida…..             1,905.28
38 West Virginia….. 4,301,156 38 Utah…..             1,897.32
39 Nebraska….. 3,796,551 39 Mississippi…..             1,859.69
40 Maine….. 3,071,161 40 Arizona…..             1,853.58
41 Idaho….. 2,934,459 41 Oregon…..             1,791.45
42 Delaware….. 2,725,095 42 Georgia…..             1,727.73
43 Rhode Island….. 2,628,747 43 South Carolina…..             1,719.95
44 Vermont….. 2,242,902 44 Alabama…..             1,711.27
45 New Hampshire….. 2,022,146 45 Tennessee…..             1,678.23
46 Alaska….. 1,850,502 46 Missouri…..             1,645.49
47 Montana….. 1,787,889 47 Colorado…..             1,639.54
48 Wyoming….. 1,739,646 48 New Hampshire…..             1,543.62
49 North Dakota….. 1,403,293 49 Texas…..             1,434.16
50 South Dakota….. 1,110,035 50 South Dakota…..             1,430.46

__
 
Source: U.S. Census Bureau, Governments Division
Created: March 29 2006
Last Revised: March 30 2006

Do we really need to make sure that we continue to be overtaxed?

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AUGUST 2005

HELP STOP UNJUST FORFEITURES

Leonard Schwartz, in the July edition of Michigan Libertarian, seeks the support of Michigan residents to support Senate Bills 138-143. 

Michigan law allows the police to confiscate a motor vehicle if they suspect that anyone used the vehicle for an illegal purpose. It doesn't matter whether the owner gave consent. It doesn't even matter whether someone stole the vehicle.

For example, if the police claim that they found any marijuana in your car, they can seize your car. How the marijuana got there doesn't matter. Maybe it fell out of the pocket of an auto mechanic, valet parking attendant, or auto thief. Or maybe the wind blew a miniscule amount of marijuana through an open window. The police can confiscate your car.

Although the government sometimes is required, and often is willing, to return the vehicle to an innocent owner, the owner must pay a large fee. In Wayne County the fee is $900.

Senate Bills 138-143 will help protect innocent owners from unjust forfeiture. These bills will require the government to return a motor vehicle, without any fee, if (A) the owner is not charged with a crime, civil infraction, or civil violation, or (B) the owner is charged with, but found not guilty of, a crime, civil infraction, or civil violation.

Please ask your state senator and state representative to support Senate Bills 138-143.

SpeakOutMichigan provides an easy way to send e-mail to them. It provides a prewritten letter, to which you can add personal comments. Type in your zip code and SpeakOutMichigan will identify your state legislators and send them the letter. It takes only a minute or two.

SpeakOutMichigan also provides an easy way to send e-mail to your friends, so that they can contact their state legislators. Again there is a prewritten letter.

Help protect yourself and other innocent owners from unjust forfeiture.

Support Senate Bills 138-143.

Reprinted by permission.  For more information see:  www.speakoutmichigan.org.

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MAY 2005

CATO RATES GRANHOLM

The Cato Institute has rated all of the nation's governors.  Here is what they had to say about Jennifer Granholm:

Jennifer Granholm, Democrat     Legislature: Republican
Took Office: January 2003
Grade: D

Jennifer Granholm, former state attorney general, campaigned as a moderate centrist Democrat. She has been advertised nationally as one of the rising stars in the Democratic Party. She began her term in office claiming she had no plans to raise taxes, saying: “I know people think because I’m a Democrat that means automatically that I’m interested in raising taxes. But that’s just not the case.”

She initially started to balance the budget by cutting spending and avoiding tax hikes. However, within two months of taking office, she began to flirt with tax increases. She settled on a 4-cent diesel fuel tax hike and increased corporate taxes by ending certain corporate income tax deductions. The legislature killed the first one but gave her the second.

By November 2003 she had proposed stopping a scheduled income tax cut.

In 2004 Granholm proposed $391 million tax plan, which raised the cigarette tax from $1.25 per pack to $2.00. She also called for replacing the expiring estate tax with a new inheritance tax. The legislature gave her only the cigarette tax increase.

Now Granholm has embarked on a quest to reform the state tax code. Given her recent history of lobbying for higher taxes, there’s a strong likelihood that the reform effort will cascade into a series of tax hikes. Granholm has been a great disappointment in her first two years.

Fiscal Performance Data

n/a         Average Annual Change in Real per Capita Direct General Spending through 2002

n/a         Average Annual Change in Direct General Spending per $1,000 Personal Income through    2002

-4.5%     Average Annual Recommended Change in Real per Capita General Fund Spending through 2005

-4.1%     Average Annual Change in General Fund Spending per $1,000 Personal Income, 2002–2005

n/a         Average Annual Change in Real per Capita Tax Revenue through 2002

n/a         Average Annual Change in Tax Revenue per $1,000 Personal Income through 2002

1.7%     Average Annual Recommended Change in General Fund Revenue per $1,000 Personal Income through 2005

-2.1%     Average Annual Change in Real per Capita General Fund Revenue, 2002–2005

2.0%     Average Annual Recommended Tax Changes as % of Prior Year’s Spending through 2005

0.00     Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

-0.6     Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

5.9     2004 Combined Top Income Tax Rates, personal plus corporate

2.0     Change in Sales Tax Rate, proposed and/or enacted (% points)

4.0     Change in Gas Tax Rate, proposed and/or enacted (cents per gallon)

75.0     Change in Cigarette Tax Rate, proposed and/or enacted (cents per pack)

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SEPTEMBER 2004

CARL LEVIN'S NEPOTISM PRINCIPLE

Shannen W. Coffin, in the August 4, 2004 edition of National Review Online (NRO), noted that Sen. Carl Levin has brought to a grinding halt the judicial-confirmation process for the United States Court of Appeals for the Sixth Circuit, and Senate Democrats have closed rank around him.

The four vacancies on the Sixth Circuit (one-quarter of the bench) have all been designated as "judicial emergencies" by the Administrative Office of the United States Courts.  

President Bush responded to this crisis by nominating four highly qualified Michigan residents to serve on the Sixth Circuit, Henry Saad, Richard Griffin, David McKeague and Susan Neilson.  They have more than 45 years of judicial experience on state and federal benches. They have been approved by the American Bar Association and have been praised by the Michigan Chamber of Commerce, the UAW, past presidents of Trial Lawyers and Local Bar Associations and former President Ford.

After languishing for years, three of these four candidates were recently approved by the Senate Judiciary Committee.  Last week they finally got their vote on the floor of the Senate.  While all three were approved by a majority of the senate, their confirmations were stopped by filibuster.

The problem with these judges is simple.  They are not related to Carl Levin.

Levin complains that, when Bill Clinton was president, some of his nominees to the same court were not confirmed by Senate Republicans.  So he says, unless President Bush re-nominates two of those Clinton nominees to the Sixth Circuit, he will block the vote.  His ire is particularly intense in the case of Michigan Court of Appeals Judge Helene White -- whose nomination was returned without approval at the end of President Clinton's second term.  This is a normal result.  

However, none of the many other nominees who have not been confirmed at the end of presidential terms were Carl Levin's cousin-in-law.  Judge White happens to be married to Levin's cousin.

Senate Democrats have made a mockery of the judicial confirmation process, turning aside any candidate that they would not have chosen.  While Democrats argue that only nine of President Bush's appellate-court nominees have been filibustered, that is nine more that in all of the preceding presidencies combined.

President Bush should not cave in to Levin's demands.  At the beginning of his term President Bush did re-nominate several judges originally nominated by President Clinton, but not confirmed.  It was meant to be a gesture of goodwill.  What he got in return was not just several judges who disagreed with his philosophy of judging but a Senate that treated his nominees with greater hostility than any time in our nation's history.  He shouldn't make the same mistake twice, especially with a senator who puts nepotism before country.

Shannen W. Coffin, a Washington DC attorney, is a former deputy assistant attorney general for the civil division of the US Department of Justice.

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SEPTEMBER 2004

BIG WIN IN MICHIGAN FOR PRIVATE PROPERTY

The Michigan Supreme Court has overturned the case that has allowed cities and local governments to abuse the power of eminent domain for the last twenty years. 

In 1981 the Michigan Supreme Court ruled in favor of the City of Detroit in a lawsuit against the residents of a small community known as Poletown. In that case, the City evicted residents of the Poletown neighborhood and demolished 1,400 homes, 140 businesses, including several churches to make room for a General Motors assembly plant. As the Detroit police yanked the door from the Immaculate Conception Church and arrested the parishioners barricaded inside, Reverend Joseph Karasiesicz told reporters; "This is an evil law and we have to fight it…[T]his has national implications and national scope. It sets a bad precedent." 

The Court unanimously overturned that ruling in a case involving Wayne County's attempt to confiscate 1,300 privately held acres for a "business and technology" park that the County claimed would provide thousands of jobs and "tens of millions in tax revenue." In invalidating the 1981 law the Court said: "Poletown's economic benefit rationale would validate practically any exercise of the power of eminent domain on behalf of a private entity. If one's ownership of private property is forever subject to the government's determination that another private party would put one's land to better use, then the ownership of real property is perpetually threatened."

Reprinted by permission from Liberty Matters News Service, August 11, 2004.  www.libertymatters.org

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MARCH 2004

FROM THE IOSCO COUNTY SPORTMEN'S CLUB

 How about this!!!!!

 1/6/04 Michigan Gov. Granholm appoints Mary Brown to National Resources Commission (NRC).

On the 1/29/2004 show of Practical Sportsman, Fred Trost included a quote from an interview with Mary Brown. Ms. Brown, a retired Democrat State Representative, a preservationist who was voted Conservationist of the Year by the Sierra Club, is Jennie's recent appointment to the NRC. Below is a quote from her.

Brown said, "I’m not a hunter, but I’m not opposed to hunting. We have to manage (our resources) for hunting, but we have to manage them for other reasons, too.

There may be areas that need to be closed to hunting for a period of time because of habitat issues. For instance, what damage is being done to the habitat when you drag a deer out of the woods?"

You heard it right. A newly appointed outdoor politician said that areas might have to be closed to hunting in Michigan because of the habitat damage from dragging deer out of the woods?

Let's hope Jenny doesn't get a chance to appoint any more.

Link to State of Michigan web site announcing appointment: http://www.michigan.gov/gov/0,1607,7-168--83855--,00.html

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NOVEMBER 2003

JENNIFER WANTS TO "TWEAK"

FOR IMMEDIATE RELEASE: Friday, Oct. 10, 2003
Contact: Michael LaFaive, Director of Fiscal Policy, (989) 631-0900

2,948 Jobs Won't Be Created if State Income Tax Cut Delayed, Economic Model Shows

MIDLAND - A widely used economic modeling program shows that delaying the scheduled cut in Michigan's income tax, as reportedly contemplated by Gov. Granholm and state legislators, would thwart the creation of as many as 2,948 jobs in 2004, according to the Mackinac Center for Public Policy, which also uses the model.

The State Tax Analysis Modeling Program (STAMP), produced by the Beacon Hill Institute for Public Policy Research at Suffolk University in Boston, is used to analyze the impact of state tax policy on jobs in states as diverse as California, Ohio, and Virginia, and by the state government of Oklahoma. The Mackinac Center owns and operates a STAMP model tailored to the state of Michigan in order to study the economic impact of changes in Michigan's tax structure.  Michigan's income tax is scheduled to be cut from 4.0 percent to 3.9 percent, effective Jan. 1, 2004.

The STAMP model used by the Mackinac Center also calculates that the business services industries would be hit hardest by a delay in the scheduled income tax cut, with more than 600 jobs not created in that sector.  This forecast comes on the heels of state Senate Fiscal Agency testimony that 23.3 percent of all job losses in the United States since 2001 have come from one state - Michigan.  

"You don't treat a bleeding patient by opening another vein," said Michael LaFaive, director of fiscal policy for the Mackinac Center.  "The state of Michigan can't afford not to cut taxes.  We're bleeding jobs. The prescription is lower state spending and management techniques such as privatization," LaFaive said.  The Mackinac Center is a nonprofit, nonpartisan research and educational institute.

Last March, the Mackinac Center published a 157-page study, "Recommendations to Strengthen Civil Society and Balance Michigan's State Budget," offering more than $2 billion in General Fund savings.  "The first round of budget cuts this year were impressive, but more can certainly be done," said LaFaive.  The study is online at http://www.mackinac.org/5046.

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OCTOBER 2003

HOW MICHIGAN COMPARES

All the talk about California's tax burden leads one to wonder how Michigan compares with other states.  Fortunately, www.taxadmin.org has done a comparison of the 2002 data.  

Michigan was 10th in total taxes at $21,864,000,000.  The per capita tax burden was $2,176. It was 13th in the percentage of personal income at 7.3%.

For the curious, Hawaii was first in both categories at $2,748 per capita and 9.6% of personal income.  California was 8th in per capita at $2,214 and 18th in percentage of personal income at 6.9%.

South Dakota was lowest in per capita taxes at $1,283 and New Hampshire was lowest in percentage of personal income at 4.4%.

Michigan's tax collection by source (percentage of total) was: property 8.6%, sales 35.6%, selective sales 10.5%, individual income 28.0%, corporate income 9.4% and other 7.8%.

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SEPTEMBER 2003

A REPORT FROM THE MICHIGAN FOREST ASSOCIATION

The annual meeting of the Michigan Forest Association was held in Newberry and Naubinway on August 15 and 16, 2003.

Previously, a Department of Natural Resources representative had explained the problem which the State of Michigan had incurred last year in paying taxes on the land that the State owns.  The original idea of lowering the taxes on all State land to the "swamp rate" of approximately $2.00 an acre went nowhere in the legislature.  Now, the State is actually doing an inventory of the property it owns to determine if the State should divest itself of some of its holdings.

The forest policy which is on the books was originally drafted some 30 years ago.  The general feeling is that it should be reviewed to determine any necessary changes.  Rep. Tom Casperson, R-Escanaba, has introduced a package of bills which will deal with a number of issues.  Warren Suchovsky, Menominee County Republican Treasurer, is following the bill on behalf of the Timberman's Association and the Michigan Forest Association.  MFA and Tree Farmers expect to work closely with the Farm Bureau in reviewing this legislation.

One of the objects is to have forest land, which is in timber production, treated as an agricultural product.  Sen. Tony Stamas has introduced SB 166 which would classify timberland of more than 10 acres which is under active management as agricultural property for property tax purposes.  This has been a long-standing goal of MFA, Tree Farm and Farm Bureau.  A similar bill has been introduced in the House under HB 4143.  Rep. Lorence Wenke, R- Richland, the Chairman of the House Committee on Tax Policy has not yet brought the bill up for hearing or action.  If you think that action on this bill is important, you can contact him at lorencewenke@house.mi.gov or call toll-free (877) 686-1787.

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JULY 2003

ECO-TERRORISTS COME TO MICHIGAN

The Associated Press reported on June 4, 2003, that police are searching for members of the radical Earth Liberation Front (ELF) who have been destroying luxury homes under construction in Michigan.  The FBI considers ELF one of the nation's most prolific domestice eco-terrorist organizations, saying it has carried out hundreds of attacks since 1996.

In Washington Township, the nearly completed homes, with a combined value of about $700,000 were burned.  Graffiti reading "Elf" and "stop sprawl" was spraypainted on nearby construction equipment.

The spraypainting found in Washington Township, about 25 miles north of Detroit, was similar to that found in an area near Ann Arbor where two homes under construction were burned in March.  An April 1 notice on the ELF Web site indicated its activists were involved.

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JUNE 2003

STATE LAND AND PROPERTY TAXES

At the May 16, 2003 meeting of the Michigan Forest Association, a representative of the Michigan Department of Natural Resources (MDNR) reported that the agency ran into a real problem last year.

It seems that the MDNR is the only state agency which pays property taxes at the ad valorum rate applicable to the property.  It does not pay the homestead or a lower rate except as to those properties which are escheated to the state when no one will buy the property.  Many abandoned lots in Detroit fall into this category.  On those, the state pays taxes at the rate of $2.50 per acre.

Last year, the MDNR had a very difficult time paying its property taxes.  The only way it was done was to go through every division and scooping up every available dollar.  This was quite stressful.

Therefore, the MDNR has decided that it should push legislation which would lower the rate on all of the property it owns to the $2.50 rate.

At the same time, the MDNR continues to try to acquire MORE property.  When private parties attempt to purchase a piece of state-owned property every single division of the MDNR must approve the sale.  This almost never happens.  Therefore, the State of Michigan owns more and more property every year.

The general reaction of the Board of the Michigan Forest Association (of which your editor is a member) was very negative to the $2.50 proposition.  In counties, such as Iosco, where the State owns a great deal of property, the result would be to push more and more burden of running the county on the private property owners who will own less and less of the land.

At the May 8 meeting of the Iosco County Democrats, county Treasurer, Elite Shellanbarger, made a presentation to the Democrats.  The Republicans, who were meeting at the same time, were invited to attend.  Your editor did so.

Among the subjects discussed was the role of the Treasurer in the collection of property taxes.  If property taxes are not paid in two years, the property involved is subject to sale.  After a payment is in default, the Treasurer "buys" the debt.  He actually writes a check for the taxes due to all of the entities who are entitled to a share of the taxes.  He uses a revolving fund to make these payments.  If the taxes are paid late, the Treasurer collects a 4% handling fee plus 1% per month on the outstanding debt for a total of 16% per year.

If the taxes are not paid for two years, the property is put up for sale.  However, governments get the first crack at all of the properties.  This includes the State of Michigan.  And, in some cases, the State does buy the property for the taxes owed plus the fees due.

If all of the governmental entities decide to by-pass the property, then the property is placed for sale for the taxes and fees and sold at auction.  If the property is sold, the former owner is given a chance to redeem his property during a relatively limited redemption period.

If no one will pay the minimum bid of the taxes and fees, the property goes to another auction where it goes to the highest bidder, regardless of whether or not it covers the amount due.

All of the payments for the property go to the Treasurer who holds the tax deed until the taxes are paid, the property is redeemed or the property is sold.  This is how the revolving fund is reimbursed for the payments it made up front.

If no one will buy the property at any price, its escheats to the State of Michigan, is owned by the MDNR, and it is that property on which the State pays taxes at $2.5 per acre.

These are the properties which blight the inner cities.  They are not maintained, they bring no real income to the cities, they are of no value to the MDNR because they are scattered all over and not in any manageable blocks.

How about this for an idea?  Give the properties away to anyone who will take them and build a home or business on them.

Don't buy any more property in the State.  If the MDNR comes to the conclusion that there is a piece they must have, then they must sell another piece. 

That's what real people do.  Rather than continue to place more productive property under government control and then require more and more money from taxpayers to pay for the State's insatiable appetite, start prioritizing and properly managing the property the MDNR already owns.

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MARCH 2003

RWC LOSES PROGRAM CHAIR

Some people really know how to mess up a retirement.

Recently, Judge J. Richard Ernst retired as Circuit Judge of the 23rd Judicial Circuit.  Rather than sit around the fireplace and read, or fish, hunt, or engage in normal activities, he took another job.

Judge Ernst has accepted an appointment to assist Armenia in the development of their legal system.  His wife, Jan Ernst, has been the program director for the Sunrise Side Republican Women's Club for the last couple of years.  Because the Ernsts will live in Armenia for the duration of the appointment, Jan will not be able to arrange the speakers for lunch at G's in Oscoda.  

The Judge will precede Jan to Armenia, figure out where they will live, and Jan will follow in a month or two.

The program is sponsored by the American Bar Association and funded through USAID and Rural Bank.  It was originally called the Central Eastern Europe Law Initiative and has now been expanded to Asia, operating in the newly established republics which became independent with the demise of the Soviet Union.

Most of these countries are nominally using legal systems based upon Napoleonic Law.  Except for Russia, which just initiated a jury system last fall, legal decisions are made by judges, a panel of judges, or a panel including a judge.  In most of the countries, the major problem is a lack of confidence in the legal system because of the endemic corruption which occurred during the Soviet rule.  Until these countries develop confidence in their police, border guards and courts, they will have difficulties dealing with their other major problems, such as women's rights and human traffickng.

The Judge will receive housing and a modest stipend for the year he and Jan will live in Yerevan, the capitol of Armenia.  While he does not speak Armenian, he hopes to learn enough Russian while there to find his way around.  He will have an interpreter available for his work.

In case you're wondering, there is a nine-hour time difference.  When it is noon here, it is 9:00 p.m. in Armenia.

This promises to be an exciting adventure and may actually force Jan to learn how to use the world wide web.

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JANUARY 2003

MICHIGAN WHALE WATCHING

The Associated Press reported on November 16, 2002 about a 4th grade teacher, Deb Harris, in Muskegon, Michigan who was amazed by an article in "Michigan Studies Weekly" -- a newspaper distributed to 462 teachers statewide.

The article read: "Every spring, the freshwater whales and freshwater dolphins begin their 1,300-mile migration from Hudson Bay to the warmer water of Lake Michigan." 

Harris called the Utah-based Studies Weekly Inc., which put out the teaching aid, to advise that there are no whales in Lake Michigan, but she said an editor stood behind the story.

A retraction was later posted on the company's web site with the explanation that the false information came from a different internet site intended as a joke.

Let's hope that all of our teachers are as diligent in checking the veracity of the information they are asked to teach.

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NOVEMBER 2002

PUT YOUR MONEY WHERE YOUR MOUTH IS

Mary P. Smith, like many other customers of Northland Area Credit Union, received the monthly newsletter from that company.  For the last four months, the Credit Union has used the newsletter to tout Democratic officeholders who are candidates in this year's election.  As a member of NAFCU and a Republican activist, she was greatly disturbed by the blatant campaign activity.  

In writing to Terry Bigda, the president of NAFCU, she stated:

"You have used money earned in part by my deposits with the credit union to campaign for candidates whose political philosophies are diametrically opposed to mine.  The campaign flyer enclosed with my October statement seeking credit union members' votes for Granholm, Levin and Peters was the last straw.

Therefore, I am taking my money elsewhere and am encouraging fellow Republicans to do the same.  I will also discontinue my VISA account through NAFCU."

Mary is not the only one to close her account.  A number of other Republicans have done so as well.  If you are inclined to do likewise, it wouldn't hurt to let Mr. Bigda know why.  His address is 4346 F-41, P.O. Box 519, Oscoda, MI 48750.

In that same vein, NPI Wireless sent out a September flyer urging customers to recycle mobile phones which are no longer in use.  NPI will send from 25 cents to $20 to the Sierra Club for any phones they recycle.  The Sierra Club is one of the most anti-private property rights, socialistic, anti-Republican group out there.  Maureen and Lew Rudel have not renewed their contract with NPI because of this position.  Other cellular companies are available.  If you choose to stop doing business with NPI, be sure to let them know why.  Why not give your functioning phone to someone who does not have one.  Even if you have no provider, 911 is usable on any working cell phone.

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JULY 2002

NOT RAIN OR SLEET, BUREAUCRACY!

For those in Tawas or East Tawas, where local mail stayed in the post office, was cancelled and sorted and delivered -- usually the next day, things have changed.  Now, all mail is sent to Saginaw.  It seems that the post office gurus who can't figure out why they are losing money hand over fist and need the 37 cent stamp to stop the bleeding, decided they had a great big automated sorting machine which was underused in Saginaw.  Therefore, we will have all of our mail sent there to use the sorter.  The automated cancellation machines have been  removed from the local post office to make sure it happens.

This remarkable machine in Saginaw recently gave your editor an example of its efficiency.  A letter was sent by someone in Reno Township on May 13.  On May 13, it was cancelled in Saginaw.  On May 15, it was cancelled in N. Houston, Texas.  It finally arrived at the Tawas City post office box on May 22.  Even the pony express did a better job.

However, you loyal readers can by-pass the bureaucracy.  If you drop your local mail in the drop boxes outside the post office after 5:00 p.m., when poor unfortunate other letters are on the way to their odyssey, the local post office employees will lovingly retrieve them, hand cancel them and sort them for delivery the next day.  Don't tell anyone else the secret. . . 

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OCTOBER 2001

MICHIGAN'S DUMB LAWS

(From www.dumblaws.com)

We often like to take aim at the Federal laws and regulations that make no sense, but it's time to admit that Michigan isn't perfect either.  Under Michigan state statutes:

  • A woman isn't allowed to cut her own hair without her husband's permission.

  • There is a 10 cent bounty for each rat's head  brought into a town office.

  • It is legal for a robber to file a law suit if he or she got hurt in your house.

  • You may not swear in front of women and children in the state of Michigan.

Some of the cities have some doozies, too.

Clawson -- There is a law that makes it legal for a farmer to sleep with his pigs, cows, horses, goats and chickens.

Detroit -- Couples are banned from making love in an automobile unless the act takes place while the vehicle is parked on the couple's own property.  Willfully destroying your old radio is prohibited.  It is illegal for a man to scowl at his wife on Sunday.  Alligators may not be tied to fire hydrants.  It is illegal to let your pig run free unless it has a ring in its nose.  According to history and animal husbandry, it prevents them from rooting in the ground for their food.

Grand Haven -- No person shall throw an abandoned hoop skirt into any street or on any sidewalk, under penalty of a $5 fine for each offense.

Harper Woods -- It is illegal to paint sparrows to sell them as parakeets.

Kalamazoo -- It is against the law to serenade your girlfriend.

Rochester -- All bathing suits must have been inspected by the head of police.

Soo -- Smoking while in bed is illegal.

Wayland -- Anyone can keep their cow on Main Street at a cost of 3 cents a day.

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MAY 2001

WE DON'T GET NO RESPECT

Thanks to Tom Ferguson and Travel News, the magazine of Michigan's Sunrise Side Travel Association, we have a good idea of the problem with Northeast Michigan.

The state publication - Midwest Travel Ideas - published by Midwest Living Magazine not only takes away our beautiful Lake Huron and gives us the much colder Lake Superior, it shows Northeast Michigan as vacant space.  There are no cities shown at all, and the only road is US-23.

Maybe that's why so many visitors to the north pack groceries for their entire trip.  They think they have to shoot, catch or trap anything they might eat.  At least the Lt. Governor knows we're here.

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JULY 1998

ENGLER PRESENTS CRIME VICTIM WARNING SYSTEM

Governor Engler recently announced the creation of the Crime Victim Notification System, a state-of-the-art innovation designed to protect crime victims' rights. Developed and supported by the Department of Community Health in conjunction with Michigan's sheriffs and prosecuting attorneys, the system is essentially a state-wide computed and telephone network that will provide up-to-the-minute information to crime victims on the status of defendants.

Currently, victim notification is done by mailed notice. Under the new system, victims will be instantaniously notified on court schedules, sentencing, and appeals.

The system is presently being tested in Newaygo and Wayne counties. It should be implemented statewide during the 1998-99 fiscal year.

"When the Crime Victim Notification System is up and running, Michigan will be the largest state with a comprehensive victim rights system and one of the first in the nation with a statewide computed system to enhance victims' rights," announced Governor Engler.

Funding for the program will be completely covered by assessments paid by convicted criminal defendants.

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APRIL 1998

MICHIGAN CHANGES MINERAL RIGHTS LAW

Michigan residents will find it easier to obtain clear title to mineral interests under a law recently signed by Governor Engler.

The law changes the Marketable Record Title Act of 1945 by shortening the period required for filing claims of tile from 40 to 20 years for mineral interests other than sand, gravel, limestone, clay and marl. This makes the Marketable Title Act consistent with the Dormant Mineral Act of 1963, which already has a 20-year period for oil and gas minerals.

Owners of mineral rights have to record their interests to protect them from being reunited with the surface rights. If they do not show up in the chain of title for 20 years, they are forfeited to the surface owners.

There is a three year grace period from the date the legislation was signed for those people who fall between the 20 and 40 year time frame which will help preserve an interest, claim or other conveyance or title transaction that may exist on property which could be affected by the law.

The change is most significant in the U.P. where closing mines ofter ceded mineral rights to employees. If these rights are not recorded, it was virtually impossible to obtain clear title and purchase remaining mineral interests because of the difficulty of tracing the title holders.

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