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The Newsletter of the Mackinac Center for Public Policy • www.mackinac.org • Fall 2004 Business “Who’s Who” Endorses Center’s State Budget Study

n May, with the Granholm representatives from the state’s business orga- Iadministration facing a pro- nizations: the Michigan Chamber of Commerce, jected $1.3 billion budget deficit National Federation of Independent Business for fiscal 2004, the Mackinac (Michigan), Small Business Association of Michi- Center went to Lansing to release gan, Michigan Association of Home Builders, Auto an updated version of its 2003 Dealers of Michigan, Michigan Bankers Associa- budget study, “Recommenda- tion, Michigan Grocers Association and Michigan tions to Strengthen Civil Society Restaurant Association. and Balance Michigan’s State “The Mackinac Center’s study provides a broad Michael LaFaive, director of fiscal policy, presented his updated Michigan budget Budget.” The Center kicked off range of recommendations that we believe have study to lawmakers at a Michigan State the release in a Capitol Rotunda not been fully considered by the Legislature and Capitol news conference. news conference with eight key administration,” said Tricia Kinley, director of tax members of the state’s business community, each policy and economic development for the Michi- of whom promptly endorsed the study. gan Chamber of Commerce. “Some have claimed Mackinac Director of Fiscal Policy Michael that state government has ‘cut to the bone.’ This LaFaive began the conference by speaking in favor document demonstrates that this is not the case.” of less state spending and against new tax hikes. Matt Hanley, Director of Government Rela- CONTENTS He was followed by a virtual “Who’s Who” of see “State Budget Study,” p. 4 Executive Vice President’s Message 2 Electric Gridiron 3 Telecom Connection 3 Media Impact 5 School Choice: Not Whether, But Which xecutive Vice President Joseph Lehman is the clear: “A major debate is over, and we have won. Labor Dispute 6 Elast one to assume that talking at a confer- School choice has become a permanent fixture of Communications Team 6 ence constitutes “impact.” But when he was the legislative landscape.” “Worldwide Vineyard” 7 asked to participate in a July 20 And an important fixture, as Harding Hire 7 school reform panel at the National well. Although the panel discus- Freeing to Learn 8 Conference of State Legislatures, he sion ran concurrently with some of found himself struck by the magni- the conference’s other meetings, it Bequeathing Liberty 10 tude of the moment. turned into a standing-room-only Legacy Society 10 “Here I was, being invited to event attended by nearly two hun- MEA Pays 11 join a school-choice panel not by a dred state legislators. Defending the Center 11 free-market organization or even by The forum, which was covered Free-Market a group of conservative officehold- in the July 21 Salt Lake Tribune, Fundamentals 12 ers, but by a conference of mostly addressed the specific question of Joseph Overton’s Legacy 13 liberal and moderate legislators,” which of two programs, vouchers Lehman explained. “And what was or tuition tax credits, was a better Free-Market Library 14 Tuition tax credits were the topic? Not whether we should have part of the agenda at the approach to school reform. In his Porkies II 16 National Conference of school choice — which I still might have State Legislatures. analysis, Lehman referred to “Forg- considered a victory — but what form ing Consensus,” the groundbreaking of school choice would work best.” study written by Mackinac Center Senior Fellow in For Lehman, the meaning of the event was see “School Choice,” p. 4

“I want to thank you for all you’ve done for our nation’s children. The Mackinac Center and institutions like it have helped blaze a trail of education reform in Michigan and across the nation.” — U.S. Education Secretary Rod Paige,

addressingwww.mackinac.org Mackinac Center advisors,| Fall 2004directors 1 andMackinac guests in CenterJune IMPACT EXECUTIVE VICE PRESIDENT’S MESSAGE BOARD OF DIRECTORS D. Joseph Olson, Chairman Rodney M. Lockwood Jr. Senior Vice President and General President, Lockwood Construction Courts Limit Selective Counsel, Amerisure Companies Company, Inc. Lawrence W. Reed, President Joseph P. Maguire BoardMackinac Center forof Public PolicyDirectorsPresident, Wolverine Hon. Paul V. Gadola Development Corporation “Economic Development” U.S. District Court Judge Richard D. McLellan Richard G. Haworth Attorney, Dykema Gossett or years Mackinac Center economists have identified Chairman of the Board, James M. Rodney Haworth, Inc. Chairman of the Board, Detroit Fpoliticized economic development schemes as one of Forming Inc. Mara M. Letica the reasons jobs flee the state. Two recent, wide-reaching Executive Vice President, Linda K. Rodney General Counsel and Secretary, Attorney at Law, Law Offices of court decisions suggest new legal boundaries for government Letica Corp. Linda K. Rodney, P.C. industrial policy — good news for the people of Michigan. Edward C. Levy Jr. President, Edw. C. Levy Co. The first decision, by a unanimous Michigan Supreme Court in July, was an unqualified victory for property rights and a renunciation of more than two decades of government BOARD OF SCHOLARS Dr. Donald Alexander Dr. David Janda Joseph G. Lehman takings of private land for “economic development.” The Western Michigan University Institute for Preventative Sports Medicine Executive court had ruled in 1981 that it was a permissible “public use” Dr. William Allen Vice President Michigan State University Annette Kirk for government to exercise its powers of eminent domain Russell Kirk Center BoardDr. John Attarian of Scholarsfor Cultural Renewal Freelance Writer to condemn private homes, businesses and churches in Detroit’s “Poletown” Dr. Robert Kleiman Dr. Thomas Bertonneau Oakland University neighborhood for the benefit of General Motors. Writer and Independent Scholar Dr. Dale Matcheck Officials in other states began citing the Poletown precedent, taking property Dr. Brad Birzer Northwood University Hillsdale College from their citizens to give it to more powerful ones. But the economic results Dr. Paul McCracken Dr. Peter Boettke University of Michigan George Mason University were usually poor. The Poletown plant never lived up to its promises of eco- Charles Meiser Dr. William Browne Lake Superior State University nomic growth, and the former residents remained permanently dispossessed. Central Michigan University Glenn Moots The most obvious problem with Poletown was that it invited abuses, justify- Dr. Stephen Colarelli Northwood University Central Michigan University ing practically any taking of private property if government could posit some Dr. George Nastas III Andrew Coulson Marketing Consultants economic benefit. Supreme Court Justice Robert P. Young Jr. wrote, refreshingly, Mackinac Center for Public Policy Dr. John Pafford “We must overrule ‘Poletown’ in order to vindicate our constitution, protect the Dr. Keith Crocker Northwood University University of Michigan Dr. Mark Perry people’s property rights and preserve the legitimacy of the judicial branch. …” Robert Crowner University of Michigan - Flint Eastern Michigan University (ret.) The Mackinac Center, in a brief submitted to the court with the Washington, Dr. Leonard Plachta Dr. Richard Cutler Central Michigan University (ret.) D.C.-based Institute for Justice, argued for precisely this outcome. University of Michigan (ret.) Gregory Rehmke In the second decision, the U.S. 6th Circuit Court of Appeals in September Robert Daddow Economic Thinking/ Oakland County Executive ruled that Ohio’s targeted business tax credit program violates the “commerce E Pluribus Unum Films Dr. Stephen Dresch Dr. Steve Safranek clause” of the U.S. Constitution, a point of view elaborated earlier on the Jhéön & Associates Ave Maria School of Law Dr. Richard Ebeling Louis Schimmel Jr. Center’s Web site (see “Are Targeted Tax Incen- Hillsdale College Schimmel Municipal The Mackinac tives Constitutional?”). The decision opens similar Dr. Jefferson Edgens Consultants, LLC University of Kentucky Dr. Howard Schwartz Center, in a brief programs in Michigan and other states to legal Dr. David Felbeck Oakland University submitted to the challenge. University of Michigan (ret.) James Sheehan The Michigan Economic Growth Authority is Dr. Burton Folsom Deutsche Bank Securities court, argued Hillsdale College Rev. Robert Sirico our state’s version of the imperiled Ohio program. Dr. Wayland Gardner Acton Institute for the Study of Religion and Liberty for precisely this Set up in 1995, MEGA has granted more than Western Michigan University (ret.) Dr. Wolfgang Grassl Dr. John Taylor outcome. $1.7 billion in Single Business Tax credits for over Hillsdale College Wayne State University John Grether Dr. Richard K. Vedder 200 select firms that promised to create jobs. Northwood University Ohio University As Mackinac Center Fiscal Policy Director Michael LaFaive has carefully Dr. Robert C. Hanna Prof. Harry Veryser Jr. documented, MEGA has not made Michigan a jobs magnet. MEGA’s cost has Hillsdale College Walsh College Dr. Dale Haywood John Walter, Jr. made broad-based tax cuts more difficult to enact, and MEGA is unfair to the Northwood University Dow Corning Corporation (ret.) thousands of businesses that do not receive tax breaks, but must compete with Dr. Michael Heberling Dr. William Wilson Baker College Economic Consultant companies that do. Dr. Ormand Hook Dr. Martin Wing When our friends ask why a Mackinac Center economist would oppose Mecosta-Osceola Kettering University Intermediate School District Dr. Gary Wolfram MEGA tax breaks, we explain we’re for tax breaks for everyone, not just the few Robert Hunter Hillsdale College firms chosen by bureaucrats. No company can be blamed for pursuing every Mackinac Center for Public Policy Prof. Harry Hutchison legal tax advantage, but we have yet to talk to a CEO who would not prefer pre- University of Detroit Law School dictable, lower taxes across-the-board, with no special favors for anyone. It’s a shame that it took court action, rather than legislative review, to rein in clearly flawed economic development schemes. But these decisions give Mackinac Center scholars new opportunities to remind lawmakers that Mackinac Center for Public Policy economic growth is a result of government performing limited functions well 140 West Main Street • P.O. Box 568 Midland, Michigan 48640 — and not the product of ever-more ambitious government economic develop- (989) 631-0900 • Fax (989) 631-0964 ment schemes. www.mackinac.org • [email protected]

Mackinac Center IMPACT is a quarterly publication of the Mackinac Center for Public Policy, a nonprofit, nonpartisan, tax-exempt research and educational organization classified under section 501(c)(3) of the IRS code. Christopher F. Bachelder Daniel E. Montgomery Thomas A. Shull Editor Graphic Designer Associate Editor Mackinac Center IMPACT 2 2 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 3 Mackinac Center IMPACT New Electricity Study Shifts Burden of Proof Back to Regulators ichigan’s electricity regulations are some- study, “Assessing Electric Choice in Michigan,” Mwhat arcane, but they directly impact every was released on July 21 in Lansing at a Mackinac household and business in the state. With the Center “Issues and Ideas” forum that featured publication of a new study on the state’s electric- Theodore Bolema, Ph.D., J.D., the study’s author ity market, the Mackinac Center remains at the and a Center Adjunct Scholar. leading edge of a shifting debate over this funda- Bolema pointed out that in addition to mental energy supply, helping solidify consumer benefits, the 2000 deregulation has support for consumer choice. increased generating capacity for electricity in This support has become vital. the state. While recognizing that proponents of Although the state Legislature in May restructuring have raised some legitimate issues, 2000 approved new competition in retail Bolema concluded that none warrant new limits power supplies — a deregulation prefig- on competition. ured by the Center’s 1997 study “Ener- Giving new meaning to the phrase “power gizing Michigan’s Electricity Market” — a lunch,” the presentation drew a critical mass of package of six bills recently emerged in more than 80 forum participants, including law- the state Senate that would once again makers, legislative staff, media and industry rep- restrict competition among electricity resentatives, most of them intimately involved in Mackinac Center Adjunct Scholar Theodore retailers. Introduction of the package the state’s electricity policy struggles. The turnout Bolema, Ph.D, J.D., presents the key findings of his electricity policy study to lawmakers follows an aggressive media campaign and the spirited debate that followed Bolema’s and their staffs. engineered by one of Michigan’s two remarks underscored the cogency and timeliness historic monopolies to convince the public that of his insights, which clearly force the burden of the state faces a power market meltdown unless proof back on those who would re-regulate. The the Legislature restricts consumer choices. Lansing State Journal published a summary of But ending the regional monopoly structure the study’s findings on Aug. 15, further ensuring in electricity four years ago has provided custom- they will remain front-and-center in the ongoing ers with lower rates and improved service quality, legislative debate. I a new Mackinac Center policy study shows. The Telecom Research Intensifies Drumbeat for Regulatory Reform in State, Nation ichigan’s regulation of telecommunications help restore rationality in telecom policy. Mranks among the most draconian in the To further educate lawmakers and policy- nation, raising costs and strangling innovation makers, the Center recently published Katz’s while Michigan’s economy stagnates. Promoting seminal study “A Telecommunications Policy market-based telecom reforms is a top priority of Primer: 20 Comprehensive Answers to 20 Basic the Mackinac Center’s Science, Environment and Questions.” Both publications are poised for Technology Initiative. nationwide impact; the State Policy Network is A stream of Mackinac Center reports and offering grants to other research institutes to analyses now sets the stage for reform as the state adapt both the “Primer” and “Crossed Lines” for Legislature eyes the Michigan Telecommunica- use in their states. tions Act, slated to sunset on Dec. 31, 2005. Two A greater understanding of telecommuni- major Mackinac telecom studies released in the cations among lawmakers, the media and the past year, along with numerous commentaries public is sorely needed. Despite its central penned by Diane Katz, the Center’s SET director, importance to the nation, telecommunications are proving instrumental in shaping the debate policy has largely been crafted by unseen hands over rewriting the legislation. in ineffective ways. Consequently, America now The first study, “Crossed Lines: Regulatory Mis- trails a number of Asian and European nations in steps in Telecom Policy,” documents the regula- deployment of the most advanced wireless and tory blunders that have cost workers their jobs, broadband technologies. investors their savings and consumers the choices Transforming telecom policies will demand found in a robust telecom market. The study, public outreach, as well as aggressive oversight of issued in December, also provides recommenda- regulators — tasks for which the Mackinac Center tions grounded in sound economic principles to is uniquely qualified. I

Mackinac Center IMPACT 2 2 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 3 Mackinac Center IMPACT State Budget Study from page 1 tions for the Michigan Bankers Association was lan hotel/conference center on Higgins also quick to praise the study’s recommendations. Lake; “In bringing a market-based framework to the • saving $327 million by stopping the general discussion, the Mackinac Center has identified fund subsidy to the school aid fund entirely; state services that the private sector is better able and to provide, as well as opportunities to introduce • saving $150 million to $400 million by market mechanisms to improve programs that repealing the state’s “prevailing wage act,” only state government can provide,” he said. which increases construction costs on public The Center’s budget study was updated to projects. help lawmakers in several ways. First, it excluded Perhaps the most notable observation of many budget items that rely solely on federal the press conference came from Keith Carey of or restricted revenues. The Center wanted to Michigan’s chapter of the National Federation of make a leaner document for legislators to ana- Independent Business. Carey said, “When gov- lyze in caucus, on the floor of the Legislature ernment raises taxes on business, they don’t ask and with their staff. Second, it incorporated the the owner where they are going to get the extra most current “as passed” budget data from fiscal money to pay the taxes.” 2003. Third, the study noted whether gross Mackinac Center analysts have made precisely appropriations increased, decreased or remained this point for 17 years, and LaFaive concluded the unchanged from the previous year, and it pro- conference by asking a series of rhetorical ques- vided commentary on changes that deserved tions: “Where do lawmakers think the people additional explanation. should cut their spending to pay for a tax hike? The study included more than 90 ideas to Should they buy less food? Move to lower-cost reduce general fund spending by a total of more neighborhoods? Purchase fewer books? than $1.6 billion, while gaining the state hundreds “Should businesses raise prices for their prod- of millions of dollars in new revenue through ucts, or hire fewer workers?” asset sales. Ideas for new revenue and savings After the news conference, LaFaive was invited included the following: to address members of the Legislature’s “Taxpayer • saving $313 million by reducing state rev- Caucus.” “It was clear to me that there is a core enue sharing to within $313 million of its group of legislators who want to avoid burden- constitutionally established level; ing Michigan with more taxes,” LaFaive said. “It is • saving $282 million by redirecting tobacco my hope that this study will provide intellectual settlement revenue to the general fund; firepower for their position.” I • gaining $10 million by selling the MacMul-

School Choice from page 1 Education Policy Andrew Coulson, and published observed that schools of choice were in fact in April by the Mackinac Center and the nonprofit accountable to parents, who were more likely LEAD Foundation, which researches existing than a bureaucracy to care about education school-choice programs. Lehman observed that outcomes, as opposed to administrative process. the report performed a comprehensive compari- When the specter of fraud in school choice was son of all existing choice programs in the United raised, Lehman noted that there is no reason to States (and several international efforts), and he assume K-12 school administrators would be detailed three conclusions: more prone to corruption than the thousands of • well-crafted tax credit programs are gener- preschool and college administrators who respon- ally preferable to voucher programs; sibly manage existing school-choice aid programs. • school-choice programs should include all And while teachers union officials will no doubt schoolchildren, not just specially targeted continue to question the very idea of school groups; and choice, Lehman commented, “It is less and less • school choice can be designed to save state politically viable to oppose all forms of choice.” governments money, rather than cost more. By the end of the forum, legislators had taken The panel discussion included a representa- all 125 copies of Coulson’s 80-page study. It was a tive of the Florida Education Association, which final sign, if another was needed, that the ground opposes that state’s variety of choice programs, has shifted. The important debate over what kind including education tax credits and vouchers for of school choice will help children most has finally students in failing schools. moved into the legislative mainstream — and the When these programs were criticized as lack- Mackinac Center is already helping lead the way. I ing “accountability” and “oversight,” Lehman

Mackinac Center IMPACT 4 4 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 5 Mackinac Center IMPACT MEDIA IMPACT Defending Free Speech and Firing on All Cylinders: Education, Fiscal Policy, the Environment and Technology

• A Wall Street Journal editorial on abusive student enrollment in the district had fallen wetlands laws cited Senior Environmental every year for seven years, during which time Policy Analyst Russ Harding regarding the case the school system had added 1,700 employees of John Rapanos, a Bay City man convicted of to its payroll. moving sand on his property, which the gov- • Mackinac Center President Lawrence Reed ernment has designated a wetland. As Harding appeared in a news report by WOOD-TV in noted, it was wrong to call it a wetland: a drain- Grand Rapids covering the 10th anniversary age ditch was constructed there by the county of the passage of Proposal A by Michigan government about 100 years earlier, and it voters. Reed called the proposal, which was working as intended. The absurdity of the dramatically reduced Michigan’s property case has led the federal judge overseeing it to taxes and restructured the funding sources postpone sentencing. for Michigan’s schools, a “big step in the right direction” and added, “Proposal A hasn’t shortchanged anybody.” When the Michigan Education Association sued the Mackinac Center for publish- • An editorial in The Oakland Press stated ing a fundraising letter that quoted MEA President Luigi Battaglieri’s comments that the Legislature should end the MESSA about the Center, the union was not only routed in court (see page 11), but monopoly over the provision of health insur- firmly defeated in the court of public opinion, with numerous editorial pages ance benefits for public school employees, endorsing the verdict in the case. citing Mackinac Center analysts’ estimates • The Detroit Free Press commented, “The usual response to such an that $400 million could be saved annually by exercise of free speech is free speech back. … The MEA chose, instead, such a step. The editorial pointed out that to take it to court, which seems a questionable use of union resources.” other unions, such as the UAW, had agreed to • The Lansing State Journal editorialized that the MEA gave “new meaning similar reforms. to the term ‘frivolous lawsuit.’ ” • An editorial in the Detroit News cited research • The Oakland Press remarked, “Why the MEA would file such a suit by Director of Science, Environment and remains a mystery. Americans are free to say what they like, and others Technology Policy Diane Katz and Adjunct are free to publicly quote them.” Scholar Theodore Bolema calling for the • The Monroe Evening News stated, “Give the appeals court credit for its Federal Communications Commission to resounding judgment in favor of free speech.” eliminate unnecessary and obsolete regulations of telecommunications. The regulations • The Traverse City Record-Eagle observed, “There’s no place for intimida- tion tactics like these in public policy issues.” require, in part, that established telephone companies rent their wireline networks to • Detroit News columnist Thomas Bray wrote that the MEA “took a much- competitors at below-market prices, violat- deserved punch to the solar plexus.” ing their property rights and inhibiting new investment and job creation. • An editorial in The Detroit News endorsed the • Education Policy Research Associate Jon Mackinac Center’s idea of auctioning off state Perdue authored an op-ed in the Oakland licenses for slot machines, rather than grant- Press suggesting ways that Michigan can ing them outright to 12 racetracks around the improve teacher certification to encourage state, as was being proposed in the Legisla- skilled people with nontraditional experi- ture. The editorial quoted a Mackinac Center ence to enter the teaching profession. Perdue analysis suggesting that the state could raise as noted the success of states that have imple- much as $1.6 billion by opening the process mented similar reforms. to competitive bidding, thereby erasing the • The Detroit Free Press published an op-ed budget deficit. Gov. Granholm was quoted in by Senior Environmental Policy Analyst Russ a Saginaw News editorial as calling the idea Harding on the likely adverse consequences “interesting.” of Gov. Granholm’s proposed Water Legacy • The Detroit Free Press published an op-ed Act. Harding pointed out that the act would by Senior Fellow in Education Policy Andrew do little to lessen the already low likelihood Coulson that exposed a major omission in the of Michigan facing significant withdrawals of ongoing media coverage of the budget deficits water from the Great Lakes, but would con- of the Detroit Public Schools. As the projected stitute an enormous expansion of the state’s shortfall reached $250 million, the deficit bureaucratic power, while decreasing the seemed inexplicable. But as Coulson revealed, property rights of landowners. I

Mackinac Center IMPACT 4 4 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 5 Mackinac Center IMPACT Zogby-Mackinac Center Labor Survey: Gut Check on “Card Check” nion officials commonly claim that they involved 703 randomly selected union members Uspeak for the rank-and-file. But when union nationwide, majorities would keep the current organizers began using a controversial new “card secret-ballot process (78 percent); agree that the check” strategy to unionize workers, the Mackinac current government-supervised, secret-ballot Center decided to put that claim to the test. process is fair (71 percent); do not think their Under “card check,” a union can represent a company and union organizers should be able to workplace after union organizers gather signatures bypass secret-ballot elections (66 percent); believe from a majority of employees stating that they want stronger laws are needed to ensure members to be represented by the union. The traditional make their decisions about forming a union in private-ballot election is bypassed entirely. private (63 percent); and favor a government- Union organizers prefer the strategy because it supervised, secret-ballot election to a card-check has raised their success rate, but card check invites system (53 percent). abuses. In public, people can feel pressured “The data indicates that union leaders’ tactics to sign for the union, even if they would have do not reflect what their members prefer,” notes voted “no” in private. Union officials also need Hunter. “Strength in numbers may appeal to an employer’s approval before they can initiate workers, but like all Americans, they want to retain card check, thus encouraging backroom deals that some basic rights.” sacrifice workers’ interests. The survey results have been in demand from So in June, the Center tapped Robert Hunter, groups working for labor reform, including law former member of the National Labor Relations firms and congressional offices in Washington, D.C. Board and senior fellow in labor policy at the Corporations, too, have sought the findings to Center, to help draft a survey of union members. better understand their workers’ attitudes. The poll was administered by the respected firm Survey results and analysis can be found Zogby International. in the Policy Brief “Union Members’ Attitudes The Zogby-Mackinac Center survey strongly Toward Their Unions’ Performance,” posted at suggests that union workers question the fairness www.mackinac.org/6806. I of card check. According to the survey, which

Center Deploys New Communications Team

he Mackinac Center has never been just about years as senior analyst for the Tresearch. Our role is to bring policy ideas to late political pollster Robert the public so they can be put into action. A good Teeter, whose Ann Arbor- communications team is key. based firm co-produced In July, the Center hired two people for its the regular NBC/Wall Street communications department who are uniquely Journal public opinion sur- qualified. Chris Bachelder, the new director of veys. Shull has also worked communications, joins the Center with a Harvard for the Heartland Institute, M.B.A. and a 20-year business career in manage- a Midwestern free-market ment consulting and the marketing of institutional think tank, and more recently investment research for such firms as Deloitte Con- as a member of the Detroit Senior Editor Thomas Shull and Director of Com- munications Christopher Bachelder map strate- sulting and Todd Investment Advisors. “No matter News editorial board, where gies for the release of the Center’s forthcoming what form of work I’ve done,” Bachelder notes, his writing won awards from “Telecommunications Policy Primer.” “it’s always involved a key element of marketing, the Michigan Associated Press, Detroit Press Club sales or branding. I look forward to bringing this Foundation, Michigan Press Association, and Edu- focus to the Mackinac Center’s media relations and cation Writers Association. publications.” Further fueling his work is his pas- In 1996, during his time at the News, Shull sionate attachment to Michigan: Born in Detroit, he recalls writing an endorsement for a particularly graduated from the University of Michigan and was good candidate for the 38th district of the state elected to the Northville City Council. House of Representatives: coincidentally, Chris The other new member of the communica- Bachelder. Observes Center President Lawrence tions team is Thomas Shull, the Center’s senior Reed: “That cinched it. I could tell that these two editor. He arrives at the Mackinac Center after four were destined to make a great team.” I

Mackinac Center IMPACT 6 6 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 7 Mackinac Center IMPACT Helping Cultivate a Worldwide Vineyard

he Mackinac Center studies state and local strategies, but conveying a positive, vivid image of Tpublic policy like no one else in Michigan. Yet freedom in which government is curbed “because no think tank is an island, and in April, Mackinac we want people to dream and to have the room to Center President Lawrence W. Reed seized two bring those dreams to fruition — for themselves prime opportuni- and their families.” He added, “We need to con- ties to promote vince the world that if anything in human affairs is freedom outside inevitable, it is that humans will be the free beings the state. their Maker intended. … History is on the side of One chance liberty, not statism.” came when Reed The other opportunity to promote free- addressed one dom abroad came the preceding day, again in of the world’s Chicago, when he spoke to the Annual Liberty most prominent Forum of the Virginia-based Atlas Economic free-market Research Foundation, which cultivates free- assemblies: the market organizations worldwide. Reed deliv- Annual Resource ered first-hand accounts of fledgling freedom Mackinac Center President Lawrence Reed helps build the Bank Meeting movements in China, South Korea and Vietnam, movement for limited government at the Heritage Foundation’s sponsored by and he then illuminated why free-market orga- Annual Resource Bank Meeting, an international gathering held this year in Chicago. the Washington, nizations should cooperate: “We need to take D.C.-based Heritage Foundation. The gathering time to assist our brothers and sisters who are included think tank executives, elected officials, laboring in the same vineyards, on behalf of the activists and policy experts from around the globe, same causes. When others within our movement and on April 29 in Chicago, a packed session of score successes, we are all winners. When we more than 300 attendees heard him answer the strengthen others, we all grow stronger.” question, Why limit government? His speech was The Mackinac Center will thus remain a later reprinted by the Foundation and posted to “movement-builder” — to ensure that your sup- the Center’s own Web site, from which it has been port for our work is multiplied many times over. I downloaded more than 1,000 times. Reed emphasized not just choosing smart

Russ Harding Adds Environmental Expertise Gov. Engler’s former DEQ director joins full-time staff

ajor environmental issues grab headlines Mand lead reporters and legislators to call the Mackinac Center for guidance. The hiring in February of Russ Harding as its new senior environmental policy analyst has enhanced the Center’s standing as the state’s premier source for environmental policy grounded in sound science Russ Harding and a respect for property rights. Harding, who for seven years served with distinction in the Engler administration as director of the Michigan Department of Environmen- tal Quality, brings considerable knowledge and experience to the Center’s Science, Environment and Technology Initiative. Immediately prior to Russ Harding surveys the “wetlands” of a Bay County property joining the Mackinac Center, Harding was senior owner. Harding’s investigation was the basis for later coverage in director for environment and energy affairs in The Detroit News and The Wall Street Journal. the Lansing offices of a nationally respected con- of the Granholm administration’s widely publi- sulting firm. His prior experiences also include cized proposal to more tightly regulate ground- senior management posts in natural resources water withdrawals. Harding observed that there for the states of Arizona, Alaska and Missouri. is no evidence that groundwater supplies are in His work at the Center has confronted major jeopardy, and as he noted in a May 11 column issues head-on. Harding recently initiated a study see “Russ Harding,” p. 15

Mackinac Center IMPACT 6 6 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 7 Mackinac Center IMPACT EDUCATION POLICY INITIATIVE Launching Liberty for America’s Schoolchildren tion immediately at hand: According Million Dollar Advance to the district’s own numbers, it had increased its staff by 1,700 employ-

The Mackinac Center for Public April 2004 ees over a seven-year period, even Policy is proud to announce that as enrollment had steadily declined

two unusually generous grants have A Mackinac Center Report and left it with 35,000 fewer students. Forging Consensus supercharged its education policy Coulson observed that the Detroit pre-

Andrew Coulson

The Mackinac Center for efforts. The first was bestowed by The Public Policy is an independ dicament was a sad illustration of the research and educational organization devoted to ent, nonprofit, nonpartisan issues. For more informati analyzing Michigan publ Center for Public Policy, pleason on this report or other pu blications of the Mackinacic e contact:

Can the School Cho Together on an Ex ice Community Come plicit Goal and a Pla Herbert H. and Grace A. Dow Foun- n for Achieving It? fundamental inefficiency of an educa- 140 West Main Street • P.O. Box 568 • Midl (989) 631-0900 • Fa and, Michigan 48640 x (989) 631-0964 www.mackinac.org • [email protected] g ISBN: 1-890624-36- 5 dation, and it provides the Center S2004-01 tion market dominated by monopoly with $967,500 during the three-year government schools.

period from 2004 through 2006 — the Senior Fellow for Education Policy Andrew Coul- largest single gift the Mackinac Center son is provoking fundamental discussion about the has ever received for policy research. direction of market-based educational reform. U.S. Education In awarding the grant, Margaret Ann the results to “forge a consensus” on a Riecker, president of the Foundation, compelling education reform strat- Secretary Urges said the Center provides “thought-pro- egy. To this end, the report reviews voking ideas that enrich the discus- all the existing tax credit and voucher Monopoly-Busting sion about education reform. We are programs in the United States, as well pleased to assist in its efforts.” as international experiences with edu- Monopoly government school- The Foundation specified that the cational choice. ing might seem a natural cause for monies in this historic gift be used to Coulson concludes that a “univer- a U.S. secretary of education. But in advance the Center’s Education Policy sal education tax credit” — a credit June, U.S. Education Secretary Rod Initiative, a sustained, multi-year pro- available to anyone who helps pay Paige sent an encouraging message gram of strategically targeted studies, for the cost of any child’s education to school-choice proponents during a programs and periodicals designed to — would create an optimal trade-off special Mackinac Center luncheon. bring market incentives to the educa- between universal access to schools tion marketplace. The Center’s widely and the direct parental financial recognized Michigan Education Report responsibility necessary for educa- and Michigan Education Digest are tional excellence. The credibility of his part of the initiative. conclusion is reinforced by educa- A second gift has further strength- tional reformers’ widespread respect ened the Center’s education programs: for his pioneering 1998 book, “Market a $322,500 grant that arose from an Education: The Unknown History.” anonymous pledge to provide one dollar “‘Forging Consensus’ is not meant for every three donated to the EPI. Along to ram a particular education policy Mackinac Center Executive Vice President Joseph with the Dow Foundation grant, the two down people’s throats,” Coulson Lehman and U.S. Education Secretary Rod Paige gifts total nearly $1.3 million. says. “Rather, it is meant to be an share a laugh at a June Mackinac Center luncheon. Paige earlier had urged the audience not to worry opening salvo in a debate to establish about “’misappropriating’ my words or ‘likeness’” a common vision for market-based in quoting his praise — a reference to the MEA’s Propelling a education reform.” Coulson hopes failed lawsuit against the Center. that this debate will, in turn, ensure The event, held at Weber’s Inn in Consensus for Freedom that the reforms promoted by educa- Ann Arbor, gave Paige the opportunity to tional choice advocates are informed outline his vision for the future of Ameri- Another advance in the multi-year by historical precedents and do not can public education to more than 70 of EPI came in April with the publication inadvertently undermine the very goals the Mackinac Center’s advisers, direc- of “Forging Consensus,” an 80-page the reformers seek to achieve. tors and their guests. He began with an study by the Mackinac Center’s senior Coulson’s education policy work expression of gratitude, saying: “I want fellow for education policy, Andrew has also translated into headlines. In to thank you for all you’ve done for our Coulson. Published by the Macki- July, the Detroit Free Press published nation’s children. The Mackinac Center nac Center and the nonprofit LEAD his penetrating op-ed regarding the and institutions like it have helped blaze Foundation, which researches existing Detroit Public Schools’ $250 million a trail of education reform in Michigan school-choice programs, Coulson’s budget deficit and subsequent teacher and across the nation.” study challenges educational choice layoffs. In the piece, Coulson showed Paige, whose department has proponents to review dispassionately that despite some public educators’ focused on standardized test results the record of historical and contempo- characterization of the crisis as unex- and teacher accountability following rary school-choice programs and use pected, there was a plausible explana- the passage of the federal No Child

Mackinac Center IMPACT 8 8 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 9 Mackinac Center IMPACT EDUCATION POLICY INITIATIVE

Left Behind Act, voiced his approval at Brother Rice High School, a Roman of school vouchers, tuition tax credits Catholic institution in Bloomfield and the growing role of private schools Hills. This unique case, which is still in American education. being adjudicated, raises complex “It is vitally important that we build questions of labor relations law, a broad base of support for school union growth and fundamental reli- choice and vouchers,” Paige said. “I gious freedoms. Perdue has explored applaud your leadership in support of these issues in cutting-edge stories in universal education tax credits.” both MER and the weekly Michigan The education secretary also Education Digest. observed: “The educational system Perdue, a native of Georgia, has has become a monopoly. And like all broad experience in writing, publish- monopolies, it needs an injection of ing, technical consulting and entre- Education Policy Research Associate Jon Perdue fresh ideas, sunshine and competition. preneurship. His articles on economic is currently investigating public education staff benefits. ‘No Child Left Behind’ and our other policy have been published by Inves- federal reforms offer all of the above.” tor’s Business Daily, and his pieces on publisher of Georgia Politics Report. Center scholars have expressed education and environmental issues He possesses a degree in finance from concerns about many of the federal have appeared in the Atlanta Journal- North Georgia College and State Uni- reforms to which Paige referred. Nev- Constitution and other periodicals. versity, and he is trained in quantitative ertheless, Paige’s discontent with the Perdue is also former editor and see “Jon Perdue,” p. 15 stagnant system of public education is a refreshing and potentially important change. As Mackinac Center President Gaining Ground in Lawrence Reed noted in his introduction to Paige’s speech, “For as often as “The Quest for Excellent Schools” you hear the old statement, ‘I am from the government, I am here to help,’ I If a journey of a thousand leagues ship development with experts at the think you’re about to hear from a man begins with a single step, Brian Car- free-market John Locke Foundation. who really means it.” penter is well underway in a quest for He further leveraged his trip by giving excellent schools. In recent months, a speech and a media interview before Carpenter, a seasoned educator and conferring with analysts at the South New Research Associate director of the Mackinac Center’s Carolina Policy Council. The Carolinas Leadership Development Initiative, has are considered pivotal states in the Speeds Ahead shared the Mackinac Center’s expertise school-choice movement, since they on school choice not only throughout lack hostile constitutional language of Since his arrival at the Mackinac the state of Michigan, but in North and the kind that currently limits school Center, Education Policy Research South Carolina. choice in Michigan. Associate Jon Perdue has been a driv- His Michigan seminars, appropri- The prospects in South Carolina ing force in the Center’s Education ately titled “The Quest for Excellent are particularly promising. The South Policy Initiative. Perdue has penned Schools,” are targeted at local com- Carolina Legislature is considering numerous articles and serves as man- munity members concerned about the governor’s proposed Put Parents aging editor of Michigan Education lackluster public education. As Car- in Charge Act, a bill modeled on the Report, a periodical news publication penter explains: “The presentation is Center’s universal tuition tax credit. If of important education policy stories written for skeptical but open-minded such programs can pass in states with that is sent to more than 130,000 folks who cling to the belief that new constitutions more favorable to choice, people in Michigan, including over administrative rules are the solution, Carpenter notes, “The day is coming 100,000 public school teachers and rather than changing the schools’ ever nearer when Michigan parents administrators. The most recent issue incentives in the marketplace. It’s will demand a similar credit.” of MER, which Perdue produced with probably the biggest mistake that At that point, with hundreds of assistance from education policy kind-hearted people make.” In recent thousands of parents in the hunt, interns Neil Block and Bryan Dahl, was months alone, Carpenter has spread excellent schools will be right around published in August, just as teachers his message to grass-roots commu- the corner. began the new school year. nity leaders in St. Joseph, Muskegon, Perdue is quick to the punch. He Jackson, Auburn Hills, Kalamazoo, To arrange a “Quest for Excel- was the first education journalist in Plymouth and Gaylord. lent Schools” presentation for your Michigan to recognize the significance He has also traveled to North community or organization, contact of the Michigan Education Associa- Carolina, where he shared Mackinac Brian Carpenter at (989) 631-0900 or tion’s attempts to unionize teachers Center strategies for grass-roots leader- [email protected].

Mackinac Center IMPACT 8 8 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 9 Mackinac Center IMPACT ADVANCEMENT IMPACT Bequeathing Freedom ames M. Rodney ranks among our most loyal the “Champions of Freedom Award,” the highest Jfriends. He is one of the longest-serving mem- honor we bestow, for his resolute dedication to bers of our Board of Directors, and the cause of free markets and indi- his leadership, financial support and vidual liberty. business advice have been instru- Hewing to principle means look- mental to the Center’s success. ing to the future, and Jim has done Jim’s many contributions to Mich- just that, most recently through igan begin with his founding and suc- his support for our summer intern cessful leadership of Southfield-based program. Jim has also included the DFI Corporation, a manufacturer of Mackinac Center in his estate plans. plastic packaging with facilities in sev- This deferred gift has made him a eral states. Jim parlayed his consider- charter member of our Legacy Society, able business achievements into an formed to recognize those who have entrepreneurial initiative for liberty, James M. Rodney, made a bequest to the Center (see providing early support to the Macki- Champion of Freedom below). nac Center and other free-market institutions. If you have already included the Mackinac Since 1993, he has served with distinction on Center in your estate arrangements, please let us the board of directors of the Mackinac Center. He know, so that we can recognize you as a Society has also been a member of the board of direc- member, too. As we can attest in the case of Jim tors of the Michigan Chamber of Commerce. In Rodney, you will be in great company indeed. I 2000, the Mackinac Center presented Jim with

“A gift to the Mackinac Center for Public Policy will ensure someone is around to fight for individual liberty and economic opportunity after you are gone. I can think of no better gift to leave future generations.” – James M. Rodney

The Legacy Society: Nurturing the Tree of Liberty en Franklin once said, “In this world, nothing rather than provide tax income for ever-bigger Bis certain but death and taxes.” The Mackinac government. We will gain important resources in Center is trying to do something about the taxes, the ongoing struggle for a freer society. And future but when I think of our mortality, another old generations will benefit from your down payment adage comes to mind: “The shade we enjoy today on a better world. comes from trees planted by others long ago.” Please know that we will work with you now to This simple proverb emphasizes the impor- ensure that your bequest to the Mackinac Center tance of acting now to nurture the ideals that will be used precisely as you wish in the future. benefit future generations, even after we are gone. Also know that any deferred gift you give will be The best gift we can leave them is the promise acknowledged in person and earn you entry in of individual liberty and economic opportunity our newly formed Legacy Society, established to John Coonradt, — the very things the Mackinac Center fights for recognize contributors — such as Jim Rodney, Vice President for Advancement every day. featured above — who are empowering us to plan You can help us today in our future battles for far into the future. America’s legacy of freedom through deferred gifts We are all-too-mortal and far too taxed, but I bequeathed through your estate. They can be any invite you to join the Center in transcending both. asset you own — usually life insurance, stocks, Help ensure the tree of liberty provides shelter for real estate, retirement plans — or a direct bequest generations to come. through a will, revocable trust or charitable trust. Bequests to the Center can even help reduce the If you would like to discuss a bequest to the estate taxes that devour huge portions of your Mackinac Center, please contact John E. Coon- hard-earned assets. radt at (989) 631-0900. I Everyone benefits. You will know that your assets will promote the ideals you hold dear,

Mackinac Center IMPACT 1 100 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 11 Mackinac Center IMPACT MEA Pays Mackinac Center

hat began nearly three years ago when the education reform. The Center’s research has often Wpresident of the Michigan Education Asso- been cited by legislators when they pass bills that ciation expressed admiration for the effectiveness the union opposes. of the Mackinac Center has ended this summer The Mackinac Center quickly secured free legal with the union reimbursing the Center for the counsel from the Washington, D.C.-based Institute court costs of defending itself for Justice, a pre-eminent public-interest law firm. against the union’s frivolous law- IJ’s attorneys mounted a superb defense based on suit. The lawsuit was unanimously the First Amendment’s guarantee of freedom of dismissed earlier this year by a speech, and an IJ-Mackinac Center media campaign three-judge panel of the Michigan prompted criticism of the union nationwide. Court of Appeals. Under oath, Battaglieri admitted to using the The controversy stemmed from names of professional athletes and the Mackinac an incident in 2001 when Luigi Center without their permission in order to raise Battaglieri, president of the MEA, money for union-related purposes, even as he convened a news conference to maintained that the Mackinac Center needed his tell reporters of his union’s plans permission to use his name similarly. When the to form an think tank to counter appeals court panel dismissed the MEA suit, the MEA President Luigi Battaglieri, answering ques- the influence of Mackinac Center Detroit Free Press called the ruling an “unquali- tions from Mackinac Center attorneys, said about the Center under oath, “I think they’ve been very research. During the conference, fied victory for free speech” and the lawsuit a influential with legislators, they’ve been influential in Battaglieri referred to the Center “questionable use of union resources.” The court policymaking. They were influential with the current governor [Engler]. … So clearly the influence has been and said, “Frankly, I admire what decision also forced the union to pay the Center’s there for the last 12 years.” they have done.” court costs, even though IJ had represented the After Center President Lawrence Reed Center for free. included Battaglieri’s quote in a letter to our sup- Mackinac Center Executive Vice President porters, the MEA and Battaglieri sued, contend- Joseph Lehman said, “Ironically, the MEA’s lawsuit ing the Mackinac Center should have obtained brought vastly more attention to Mr. Battaglieri’s Battaglieri’s permission before quoting him statement of admiration than we ever could have in a fundraising letter. Neither the union nor generated on our own.” The summer issue of the Battaglieri disputed the accuracy of the quote. Mackinac Center’s Michigan Education Report Union officials apparently hoped a lawsuit carried news of the lawsuit decision to more than — even one without merit — would drain the 100,000 Michigan public school teachers, most of Center’s financial resources and mute its voice on them MEA dues payers. I Teaming Up With the Mackinac Center by Chip Mellor, President, Institute for Justice know it had picked the wrong organization to try At the Institute for Justice, we are privileged to intimidate. That’s why we offered to represent to represent clients who embody the principles of the Center. freedom. They inspire us. It was a glorious team — Mackinac and IJ. The That was emphatically true when we repre- Mackinac Center has a well-deserved reputation sented the Mackinac Center for Public Policy in for producing first-rate public policy analysis, and the lawsuit filed against it by the Michigan Educa- it is known nationwide for its excellent manage- tion Association. ment and marketing abilities. The Institute for Jus- Being all-too-familiar with the determina- tice employs in every lawsuit a unique approach tion of the teachers union to oppose meaning- to public interest law, combining litigation, media ful education reform, we immediately took and outreach. At every crucial juncture of the case, notice when the MEA sued the Center. It was Mackinac and IJ brought these skills to bear to The Institute for Justice’s Clark clearly an attempt to harass, even silence, deliver a one-two punch that left the MEA con- Neily, lead defense attorney for the Mackinac Center against the MEA, the most effective voice for education reform stantly off-balance. is shown briefing the media in Lan- in Michigan. If the MEA could get away with While all of us at IJ had long known and sing. The Institute’s Web site comments, “Among his most notable something like this against Mackinac, the larg- respected Mackinac and its staff, those of us working victories, Clark won a unanimous est state-based think tank in America, it would on the case came away with an even greater appre- appeals court victory against the send a chilling message to the many think ciation of what a special organization Mackinac is. Michigan Education Association when it sought to silence its most tanks working heroically for school choice and And we came away with something else, too effective free-market rival, the similar reform in other states. — enduring friendships that will serve as the foun- Mackinac Center for Public Policy.” Mackinac was determined to fight back, and dation for joining forces again in the future. That’s we wanted to do anything possible to let the MEA a very exciting prospect! I

Mackinac Center IMPACT 1 100 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 11 Mackinac Center IMPACT FREE-MARKET FUNDAMENTALS The Cause and Perils of Inflation ome 25 years ago, well past the age of 80, images of a life’s savings being wiped out in SHenry Hazlitt set about to compose a book an afternoon. In reality, however, the effects on inflation. A succession of American Presidents of inflation are much more mundane, insidi- in the 1970s appeared at a loss to understand, ous and difficult to detect. Though commonly much less remedy, an ongoing collapse of the accounted for in our private financial practices, worldwide monetary system. Though Hazlitt slower rates of inflation still possess great was not trained as an economist, there were few power for social and financial ill. authors more qualified from a lifetime’s work — Nathan Russell, Hillsdale College — journalist, literary critic, economic scholar and philosopher — to produce the timely and Inflation is popularly viewed as a natural occur- prescient volume “The Inflation Crisis and How rence, not to be feared, and perhaps even, to To Resolve It.” a certain extent, desirable. People have grown Hazlitt’s experience as an analyst of inflation accustomed to a gradual inflation and forgot- was intensive and decades-old. At the end of ten its effects in the 1970s. Hazlitt, however, World War II, he had been an editorial writer at recalls for everyone that inflation is not natural the New York Times for 12 years when his opposi- or desirable, and that the system that enables tion to the 1944 Bretton Woods international inflation should be dismantled and replaced. monetary agreements caused an irreparable strain — Laura Davis, University of Michigan in his relationship with the paper’s management. He eventually refused to write anything further on 3. The solutions for inflation involve an increase the subject, saying, “It’s an inflationist scheme that in personal liberty and a reduction in the will end badly, and I can’t support it.” power of the state. As a capstone to the work of the Mackinac Center’s summer interns, Board of Directors Hazlitt offers possible solutions through the Member James Rodney suggested that they read demonopolization of money by the govern- Hazlitt’s book and write analytical and interpre- ment and the possibility of offering privately tive essays on it. These young staff members didn’t created currencies. In this essay, personally live through the severe dislocations — Bryan Dahl, Michigan State University Communications caused by the extreme inflation of the 1970s, but Director Chris it’s clear they have developed through reading The government also limits liberty by not Bachelder provides a Hazlitt’s book a deep understanding of inflation’s allowing free individuals in a free market to sampling of reviews causes and its destructive effects. Excerpts from establish their own mediums of exchange. The by Mackinac Center the essays illustrate three of the most important federal government monopolizes the minting summer interns of general lessons on inflation: of money and prevents, by law, people from “The Inflation Crisis contracting and dealing in currency of their and How To Resolve It,” 1. Economists often provide faulty definitions of own choosing. a book by free-market inflation, with an undue emphasis on rising — Laura Davis, University of Michigan journalist prices. Hazlitt focuses on currency expansion Henry Hazlitt. and its consequences. Legal tender laws mean you have to use money Although the book was of the state, and this money is usually emit- first published in 1978, “According to Hazlitt, inflation is actually the ted by a central bank, or government itself. … its insights remain degradation in the value of the currency.” Repealing the legal tender laws would allow relevant today. — Richard Scherf, free competition among currency issuers. Central Michigan University — Ondrej Hartman, University of Economics (Czech Republic) “The ideal stable unit of currency has neither physical utility itself nor fluctuations in value. Hazlitt’s observations on personal freedom Money with these features would make it a are timeless, and his conclusions about infla- neutral commodity with a set value, favoring tion have contributed enormously to the field neither borrowers nor lenders, rich nor poor, of monetary economics. They are ideas that are governments nor citizens. too often absent today in college curricula. The — James Hohman, Northwood University Mackinac Center for Public Policy is pleased to have provided this summer’s class of interns with 2. Inflation’s impacts are not simply economic, both policy research experience and the chance but inevitably political, social and moral. to review this important work of free-market literature. I “Inflation calls to mind images of a wheelbar- row of cash being used to buy a loaf of bread,

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by Joseph G. Lehman, Mackinac Center • We won a landmark legal victory for free executive vice president speech, when with the help of the Wash- Joseph P. Overton was the indispensable man. ington-D.C.-based Institute for Justice, we His passing last year was as devastating as it was defeated a lawsuit the Michigan Education sudden. Yet his contributions to the Mackinac Association filed against us after we quoted Center and the freedom movement have proved their president in our fundraising letter. The so powerful that they now provide the means by suit was apparently calculated to intimidate which we advance without him. the Center and silence our voice on educa- Until that awful evening last summer when tion reform. Joe — our colleague, friend and senior vice president — was killed in the crash of his ultralight aircraft, his larger-than-life leadership, passion and accomplishments had made his death seem unimagi- nable. Abruptly, the “unimagi- nable” became the severest test in the

Mackinac Center’s Mackinac Center President Lawrence Reed speaks to an audience history. at the dedication of the Overton Library. Amid our Each of these “firsts” bears Joe’s imprint. But shock and grief, as hard as it is to imagine them without the foun- we resolved to dation he helped build, it is completely impossible surmount our loss, to imagine them without the leadership and hard as Joe would have work of our current staff. We are honoring the counseled. legacy of an indispensable man by achieving new More than a year heights after he is gone. later, I am deeply * * * grateful to say we Joe has also been commemorated more con- have succeeded. cretely in the past year, in ways designed to inspire Gisèle Huff (left) of the Jaquelin Hume Foundation and Lynn Harsh (right) of the Evergreen Freedom Founda- I believe the same leaders to advance free markets and individual tion celebrate after receiving awards at the State Policy Divine Providence liberty in the future: Network’s Annual Meeting in October 2003. Harsh was that numbered Joe’s The State Policy Network inaugurated the honored with the inaugural Overton Award. • days also ordained Overton Award, which will be given from the success of our last, most difficult year. Five time to time to a leader who advances sound achievements stand out, each of them a Mackinac public policy at the state level. Lynn Harsh, Center “first”: the “indispensable woman” of Washington • We secured the largest pure research grant State’s Evergreen Freedom Foundation, was we have ever received — nearly $1 million the first honoree. for education policy, from the Herbert H. • The Mackinac Center named its economics, and Grace A. Dow Foundation. law and public policy library the “Joseph • We added to our full-time staff a former P. Overton Library,” in a ceremony led by state government department chief: Russ Mackinac Center President Lawrence Reed Harding, past director of the Department of and attended by friends and associates of Environmental Quality, and now our senior Joe, and Joe’s widow, Helen. environmental policy analyst. • Kenya’s first free-market policy institute • A sitting federal cabinet official addressed a established a “Joseph P. Overton Leadership Mackinac Center audience, when U.S. Sec- Center,” in a ceremony attended by Reed retary of Education Rod Paige commended and his assistant, Kendra Shrode. our calls for school choice in a speech to our Thus does Joe’s legacy continue — a living boards of advisors. legacy of hope, progress and freedom. We are • Former Gov. John Engler, who helped working hard to make this legacy as indispensable found the Mackinac Center, keynoted a as the man himself. Center gathering of business leaders and called on them to support the Center More about Joseph P. Overton’s life can be financially. found at www.mackinac.org/5513. I

Mackinac Center IMPACT 1 122 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 13 Mackinac Center IMPACT ��

�� REE ARKET IBRARY �� F -M L � ��

�� IEWPOINT OMMENTARIES �� V C �� Mackina c Center for Pu blic Policy

Michigan Privatiza tion Report • Summer 20 02 1

Lansing Bureaucracy Threatens When Politics Trumps Science New Communications Technology September 2004 V2004-25 July 2004 V2004-19 Environmental scare tactics are now routine, Efforts by state and federal bureaucrats to and when they override scientific discipline in reimpose an outdated regulatory framework public policy, the human and economic costs can could stifle the development of future communi- be enormous. cations technology, such as phone calls over the Internet. The Record of “Economic Development” Policy in Michigan Union Subjects Religious Objector September 2004 V2004-26 to Modern-Day Inquisition Michigan’s economy and job growth are July 2004 V2004-20 among the very worst in the nation, casting doubt Unionized teachers cannot be compelled to on state officials’ claims that generous spend- pay union dues spent on activities that violate ing on economic development programs helps their religious beliefs. But the Michigan Education produce jobs. Association has subjected teachers who exercise this right to hearings to substantiate their personal Growing Broke by Degree To access electronic beliefs. September 2004 V2004-27 versions of the publications Gov. Granholm has appointed a “Commission in Free-Market Library, Eminent Domain Extremism on Higher Education and Economic Growth,” simply go to the Mackinac Runs Into Judicial Brick Wall yet research suggests that more state spending Center Web site, click July 2004 V2004-21 on higher education will not improve Michigan’s “Publications,” and go to A Michigan circuit court judge correctly economy. A better approach would include fewer “Viewpoints,” “Periodicals,” or “Studies.” stopped Grosse Ile township officials from seizing direct subsidies to colleges and universities and a privately owned bridge. (Note: This recogni- more competition among them. tion of limits on government use of the power of eminent domain foreshadowed the Michigan Supreme Court decision in July that reversed the JOURNALS

ISSN 1092-7999 infamous, precedent-setting “Poletown” decision Privatize the UNIVERSITY OF MICHIGAN Michigan Privatization Report of 1981.) MPR2004-01 $3.00 A Quarterly Publication on Privatization Initiatives throughout the State • Mackinac Center for Public Policy • No. 2004-01 / Spring 2004

�� How much has Michigan �� America’s Scientific Leadership �� benefited from contracting Imperiled by Weakened Curricula out its state-owned ski areas? High School Fiddlers’ August 2004 V2004-22 Group Goes Private How much could local units of Prison Privatization: A National Trend America’s leadership in science and technol- DNR Contracts out government save from privatiz- Ski Area Management and more... ogy depends on a reliable supply of rigorously Mackinac Center for Public Policy Michigan Privatization Report • Spring 2004 1 ing golf courses? What is the trained graduates. But many U.S. schools are best management approach for state and local jail failing to prepare students adequately in these facilities? Would the state be better off privatizing disciplines. the University of Michigan? These and other questions are answered in this issue. 16 pages. Reregulating Electricity Could

�� Shock Michigan’s Economy WWW.EducationReport.ORG Michigan Education Report

August 2004 V2004-23 $3.00 News and analysis for educators, parents, and policy makers Early Fall 2004 Summer 2004 $3.00 �� Bills introduced in the Michigan Legislature �� Key Stories: Court rejects �� would reverse the progress made since 2000 in �� MEA lawsuit against Mackinac �� deregulating Michigan’s electricity market. Such �� Center. Thousands of stu- �� reregulation would restrict choice in electricity �� dents unnecessarily assigned �� Questioned by Mackinac Center attorneys, MEA President Luigi Battaglieri admitted to using without �� permission the Mackinac Center’s and professional athletes’ names for union-related fundraising. His lawsuit maintained the Mackinac Center needed his permission to similarly use his name. �� supply, harming consumers and employers alike. �� to special education. U.S. �� PAID

Fenton, MI �� Permit #1776

U.S. POSTAGE Dept. of Education accuses

NON PROFIT ORG. �� Michigan teacher hiring practices and the professional culture where they work �� Percentage of new teachers who go 68 �� through their fi rst year without observation When Will Conventional Public Schools �� by a mentor or experienced teacher 43 states of not using $6 billion �� Percentage of new teachers who report 72 that no extra assistance is available to them �� 56 �� Percentage of new teachers hired after 12.2 Key: the school year has already started 33 �� Michigan �� Percentage of new teachers who are 73 entering teaching as their fi rst career 54 �� Overall �� Percentage of new teachers who are 27 �� entering teaching from another line of work 46 �� These fi ndings are from a study from Harvard Graduate School of Education Project on the Next Generation of Teachers,www.gse.harvard.edu/ Be as Accountable as Charters? �� ~ngt/ directed by Pforzheimer Professor Susan Moore Johnson. hugse9.harvard.edu/gsedata/Resource_pkg.profi le?vperson_id=178 in federal funds. A pro-con Researchers Susan M. Kardos and Edward Liu surveyed a random sample of 486 new (fi rst- and second-year) teachers in California, Florida, Mas- �� sachusetts, and Michigan to learn about the hiring practices and the professional culture of the schools where they work. �� August 2004 V2004-24 debate: Should teachers be When Central Michigan University revoked paid based on merit? MERC rules that Catholic the charter of Walter French Academy, it became school must hold union vote. These topics appear the 15th charter school in Michigan since 1994 to with numerous others. 12 pages. be closed by its authorizer for poor performance. This commitment to reform could also improve conventional public schools.

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STUDIES & REPORTS

Forging Consensus Assessing Electrical Choice in Michigan

April 2004 S2004-01 $15.00 S2004-03 $3.00 Mackinac Center Senior Fellow in Education Adjunct Scholar Theodore Bolema, Ph.D., J.D., Policy Andrew J. Coulson provides a comprehen- provides recommendations for further improving A Mackinac Center Report Forging Consensus sive review of domestic and international school- Michigan’s electricity market following the Leg-

Andrew Coulson choice plans and describes the philosophical prin- islature’s deregulatory program in 2000. Bolema

The Mackinac Center for Public Policy is an independent, nonprofit, nonpartisan Can the School Choice Community Come research and educational organization devoted to analyzing Michigan public issues. For more information on this report or other publications of the Mackinac Together on an Explicit Goal and a Plan for Achieving It? ciples most important to effective school reform. analyzes a set of Michigan Senate bills that would Center for Public Policy, please contact:

140 West Main Street • P.O. Box 568 • Midland, Michigan 48640 (989) 631-0900 • Fax (989) 631-0964 Coulson concludes that a universal education restrict choice in electricity supply, resulting in www.mackinac.org • [email protected]

ISBN: 1-890624-36-5 S2004-01 tax credit is superior to a means-tested voucher less competition and higher electricity rates. approach and urges all school-choice proponents May 2004 Revision of the March 2003 Study to unite behind it. Union Members’ Attitudes

A Mackinac Center Report Toward Their Unions’ Performance Recommendations to Strengthen Civil Society and Balance Michiganʼs Recommendations to Strengthen S2004-05 $3.00 State Budget

�� Civil Society and Balance Michigan’s State Zogby International and the Mackinac Center

Michael D. LaFaive Project Manager Budget — 2nd Edition undertook a nationwide survey of union members

An Analysis of Fiscal-Year 2002-03 Appropriations and Recommendations for 2004-05 S2004-02 $15.00 to determine their views of their unions’ perfor- Rather than increasing taxes to close Michi- mance. One important finding that emerges from

Jan. 6, 2004 No. 2004-03 ISSN 1093-2240

Let Cintas Workers Make Up Their Own Minds gan’s budget shortfall, Mackinac Center Director the polling is union members’ support for main- By Paul Kersey

Summary A movement is afoot to take away the right of workers to decide for themselves which union will represent them. Oddly enough, it is the The Teamsters and unions themselves that are clamoring for the change. UNITE, which represents garment industry workers, are em- Ordinarily, when a union seeks to represent a group of workers,of it Fiscal Policy Michael LaFaive details a series of taining the secret-ballot process for the formation ploying new tactics that under- begins by collecting authorization cards that are signed by those workers. mine the right of workers to de- Once it has signatures from 30 percent of those workers, it files a petition cide which union will represent with the National Labor Relations Board (NLRB) to be recognized as their them. representative. The employer may then either call for a secret ballot vote to determine representation, or if it is convinced that the unions support is Main Text Word Count: 743 strong it may agree to recognize the union on its own. But now the Teamsters and UNITE, which represents garment industry workers, are following a tactic they are calling uniform jus-specific budget-cutting recommendations and rev- of unions, as opposed to a “card check” procedure �� tice to organize the employees of Cintas, a provider of uniforms and laundry services with 27,000 employees and 14 manufacturing sites in Union Members’ Attitudes Toward the United States and Canada, including Michigan. Rather than organize Cintas workers by persuading them to sup- Their Unions’ Performance port the union, the new strategy begins by putting pressure on Cintas. By Joseph G. Lehman The unions are approaching religious, social and political groups and convincing them that Cintas is engaged in unfair, anti-union activity.enue sources that would save the state over $3.5 favored by union organizers that requires only the These organizations then target the employer, damaging its public repu- �� tation. The unions have also approached Cintas cli- Union Members as a Percentage ents, such as Starbucks coffee, to get them to stop using Cintas services. These methods, referred to as �� of the U.S. Workforce �� 24 a corporate campaign, can inflict heavy damage. �� One such campaign directed at Family Foods contrib- 22 �� uted to the bankruptcy of that Kalamazoo-based gro- �� 20 cery chain. billion in fiscal 2004. signatures of a majority of workers. �� 18

�� Percent The goal is to force Cintas to sign what are 16 referred to as neutrality and card-check agree- �� 14 ments, in order to avoid further public relations damage. So far, Cintas has refused to do so. �� 12 �� 1973 1978 1983 1988 1993 1998 2002 �� Year A neutrality agreement is, in theory, an Source: Bureau of National Affairs �� agreement that the employer will not oppose unioni- �� continued on back ��3 �� 1�� OW TO ORDER �� H �� • �� 2� �� • �� All publications are available at no charge via the Inter- 50¢ each. Please call for bulk discounts. net at www.mackinac.org. For telephone orders, please call the Mackinac Center VIEWPOINTS: Viewpoints on Public Issues are two- at (989) 631-0900. The Center accepts Visa, MasterCard, page commentaries on current Michigan policy issues. and Discover/NOVUS for your convenience. Please have Three are published each month. Individual Viewpoints are your card and item title(s) handy when calling.

Russ Harding from page 7 published in the Detroit Free Press, the proposed Wall Street Journal. permitting system could have devastating conse- As David Palsrok, chair of the House Great quences for both property rights and Michigan’s Lakes and Tourism Committee, recently indicated economy. in a letter to the Center, “Mr. Harding’s ability to Harding has also significantly influenced draw on his extensive background knowledge to public debate on how best to manage the pres- present facts in a clear and concise manner has ence of dioxin in the soil around Midland, Mich., been a great benefit for the Legislature and the where the state Department of Environmental people of Michigan.” We are proud to count him Quality has threatened to declare some 9,000 in our ranks. I Midland properties “hazardous waste sites.” Law- makers have sought Harding’s opinion on the best course of action, and they have followed his lead from page 9 in demanding a meaningful study of the actual risk Jon Perdue to public health before imposing the incalculable analysis and statistical methods. economic hardship of declaring Midland a con- “I look forward to the research and articles taminated community. we’ll be producing in the months to come,” he Among Harding’s first projects for the Center says. “If we report objectively to public educators was an examination of the federal prosecution and the people of Michigan, we can help create an of a Bay City developer for moving sand around informed consensus about what steps should be his property in Bay County, Mich. The case taken to improve the schools.” illustrated just how arbitrary — and arguably unconstitutional — the regulation of “wetlands” To view the most recent issue of the Michi- has become. Due to Harding’s work, the case gan Education Report, browse under the “Sites” and the Mackinac Center received prominent menu or the “Publications/Periodicals” menu at attention in both The Detroit News and The www.mackinac.org. I

Mackinac Center IMPACT 1 144 Summer Fall 2004 2002 | | www.mackinac.org www.mackinac.org | Fall 2004 15 Mackinac Center IMPACT Privatizing the “Porkies” or years, Mackinac Center budget analysts Ducky Challenge,” which paid $5,000 to the Fhave publicly asked, Is owning and running skier who found the most rubber ducks planted a ski resort a proper function of government? throughout the ski area. They also held a $99 sale The Michigan Department of Natural Resources for season passes (a 60 percent drop in price) and has finally admitted the answer might be “no” by made the passes transferable to Mt. Bohemia. This contracting with a private firm to manage a state- led to a 12-fold increase in season pass sales. Daily owned ski area in the Upper Peninsula. fees to skiers remained unchanged at $28. The Mackinac Center first recommended privatizing the Porcupine Mountains Downhill Ski Area — known as the “Porkies” — in 2001. Operating the ski slope was a continual financial drain on the state budget, and the state even considered a par- tial closure of the area to save money that year. In 2001 and 2002 alone, the Porkies lost more than $170,000 and $57,000, respectively. In contrast, two nearby, private ski areas averaged 75,000 visits per year and paid property tax bills to local and state governments exceeding $60,000 each. The state finally sought private-sector assistance in 2003. After soliciting and reviewing bids, it signed a one-year contract with the newly created Porcupine Mountain, LLC to operate the ski hill for the 2003-2004 ski season. Porcupine Private management has taken this ski slope from pork to rubber ducks. The result Mountain is owned by the people who run nearby is a $200,000 savings for taxpayers. The Mackinac Center was alone in its public recommendation that the ski area be privatized. Mt. Bohemia, a private, for-profit ski hill. The contract saved the state approximately $200,000 Mackinac Center Director of Fiscal Policy this year alone. Michael LaFaive recently asked a DNR official if Within days of assuming control, the new man- the Mackinac Center’s work had led the depart- agers of the ski hill began marketing the Porkies ment to privatize the Porkies. The official insisted in a way the state never had. They printed 20,000 on the phone that it had not. He could produce magazine inserts for distribution in ski magazines, no evidence later, however, of an internal discus- ran commercials in markets as far away as Wiscon- sion about privatizing the Porkies predating the sin, and developed promotions like the “Rubber Center’s first article on the subject in 2001. I

140 West Main Street • P.O. Box 568 • Midland, Michigan 48640

Mackinac Center IMPACT 1 166 Summer Fall 2004 2002 | | www.mackinac.org