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The Magazine of the Mackinac Center for Public Policy January/February 2013 SHOW Mackinac Center analysis of ballot proposals reaches beyond Michigan

Center analysts gave no fewer than 100 talks in Michigan about the recently defeated ballot proposals, logging thousands of miles from Alpena to Kalamazoo.

The Mackinac Center’s overall strategy was to educate voters with ballot proposal studies, commentaries, Overall, Mackinac Op-Eds, videos, Web Center analysts gave Right-to-work chats, TV appearances some 150 interviews, and a popular Web page drew national media It’s not a war on workers. It’s a fight for more and better jobs MIballot2012.org. attention from coast — Helping Make Michigan Home again. Story on page 10 to coast, and The New A large-scale advertising York Times followed campaign generated up on Proposal 2 4,000 ads from October after the election, FOIA: Protecting the to early November callings its defeat “an Right to Report in Detroit, Lansing, Page 13 embarrassment” for Saginaw, Grand Rapids organized labor in the and northern Lower cradle of unionism. Tax v. Profit Peninsula markets.

The Morality of Exchange Page 15 Celebrating in 2013! see other side Keep track of these and other Mackinac Center Activities on our website! Ballot Proposal Roundup: The Analysts’ Perspectives Page 7 Experience the Mackinac Center ANYTIME, ANYWHERE iPhone, Android and More Getting analysis and stories from the Center has never been simpler or more elegant. Download our apps today (or simply surf to mackinac.org on your mobile device).

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2013 marks the 25th anniversary of the Mackinac Center! Twenty- five years of fighting to empower everyone with liberty and opportunity! Mark your calendar for Oct. 9, 2013 — we’ll be hosting a gala in Lansing at the Kellogg Center and you’re invited. We look forward to 25 more years to help make Michigan a better place for everyone. Experience the Mackinac Center

FROM OUR WEB ANYTIME, ANYWHERE Blog Keep up to date on the latest policy stories from Mackinac Center analysts. mackinac.org/blog MichiganVotes A New Beginning Want to know what your legislator 25 years in the making (and others) have been voting for? MichiganVotes.org helps keep Michigan Welcome, readers, to the new Mackinac donor interview (Page 6), thoughts politicians accountable to their constituents. Center magazine Impact. In our from our educational St. George, Mike MichiganVotes.org efforts to serve our supporters better, Van Beek, on battling teacher union we took the time to restructure our contract dragons (Page 8), and election CapCon old IMPACT newsletter into a more takeaways from the fiscal, legislative Our flagship news source for the engaging and educational tool for those and labor perspectives of our lead state of Michigan. Breaking news like who love freedom, free markets and a analysts on those respective issues never before. more frequent read. (Page 7). MichCapCon.org This issue holds our latest research, Let us know how you like the new including our lead feature on Michigan’s magazine on the Mackinac Center’s long struggle to adopt a right-to-work Facebook page or Twitter handle law, which was just passed in December (@MackinacCenter)! Our goal is not to What folks are saying (Page 10). This has been an undertaking stop here, but to keep innovating for about the MAckinac Center years in the making, and we hope and inspiring those who inspire us — you enjoy the fruits of the Mackinac YOU. Center’s labor for worker freedom for As always, we wish a warm and “Enormous progress many more years to come. hopefully freer year to one and all this has been made with Our new magazine format allows us one season. state-based think tanks other benefit: letting us get personal. For Liberty, (By the way: Congrats These inaugural pages hold an in-depth Lindsey Dodge, Editor to the Mackinac Center in Michigan!) over the last couple decades. The fight in Washington may

Lindsey Dodge recommends “The Machine” be bogged down, but the fights on the ground “If you haven’t seen the short video “The Machine,” created by Reason and the Moving Picture Institute, in the various states go to the Mackinac Center’s Pinterest page and find it are going better than under our “Video” board to watch. It’s 4 minutes and we might of hoped.” 30 seconds that will teach you more about how teacher — Jonah Goldberg, from National unions work than most American History classes.” Review’s online blog “The Corner,” on Michigan’s passage of right-to-work.

IMPACT 3 January/February 2013 mackinac.org President’s Message

Letter from the president

Board of Directors Hon. Clifford W. Taylor, R. Douglas Kinnan Chairman Senior Vice President Retired Chief Justice, and CFO, Reform Starts in the States, Michigan Supreme Court Amerisure Insurance Joseph G. Lehman, President Edward C. Levy Jr. Mackinac Center for President, Edw. C. Levy Not in Washington Public Policy Co. Joseph J. Fitzsimmons Rodney M. Lockwood Jr. It’s downright discouraging to consider how school employee unions by approving Retired President, President, Lockwood University Microfilms Construction Company, hard it is to start reforming Washington. that state’s first charter public school Inc. Dulce M. Fuller That’s why we have to remember that re- law. Georgia voters also expanded char- Owner, Woodward and Joseph P. Maguire Maple President, form doesn’t begin in Washington at all; it ter public school options. Wolverine Development Richard G. Haworth Corporation begins in the states. Washington is where Chairman Emeritus, • Wisconsin voters reaffirmed Gov. Haworth, Inc. Richard D. McLellan reform ends. Attorney, McLellan Law Scott Walker’s reform agenda by re- Kent B. Herrick Offices President and CEO, The Mackinac Center’s founders under- turning control of the Senate to his Thermogy D. Joseph Olson Retired Senior Vice stood that you can’t make headway in party and retaining his party’s major- J.C. Huizenga President and General President, Westwater Counsel, Amerisure Washington by ignoring where people in ity in the Assembly. Group Companies Washington come from — the states. Nearly Phil F. Jenkins • This issue of IMPACT contains the good Chairman, Sweepster Inc. every elected official in DC cuts his or her news about Michigan voters’ verdicts political teeth at the state level. They field on two ballot measures that would have Board of Scholars test policies and political strategies there, Dr. Donald Alexander Dr. Dale Matcheck enshrined costly union privileges into Western Michigan Northwood University accumulating legislative records that some- University the constitution. Two state Supreme Charles Meiser times read more like rap sheets than actual Dr. William Allen Lake Superior Court justices committed to the rule of Michigan State University State University (ret.) accomplishments. Dr. Thomas Bertonneau Glenn Moots law were re-elected. And, of course, the Writer and Independent Northwood University State-level politicians who win elections in monumental news that the Legislature Scholar Dr. George Nastas III Marketing Consultants spite of their support for anti-taxpayer pol- got serious about a right-to-work law. Dr. Brad Birzer Hillsdale College Dr. John Pafford icies take their habits with them to the fed- Dr. Peter Boettke Northwood University As I predicted last quarter on this page, the eral level. Free-market reformers shouldn’t George Mason University Dr. Mark Perry unions’ overreaching November ballot pro- Dr. Theodore Bolema University of Michigan then be surprised when it’s difficult to re- Anderson Economic - Flint posals unleashed a loud and overdue pub- Group form the federal government, because the Lawrence W. Reed lic conversation about the role of unions in Dr. Stephen Colarelli Foundation for die was cast in the states. Central Michigan Economic Education our economy and government. I wrote the University Gregory Rehmke Federal fallout is one big reason it’s utterly Andrew Coulson Economic Thinking/ unions would likely lose control of the con- Cato Institute E Pluribus Unum Films essential to study state policy and keep an versation they started and that is exactly Robert Crowner Dr. Steve Safranek Eastern Michigan Ave Maria School of Law eye on those who enact it. what happened. The political momentum University (ret.) Dr. Howard Schwartz The Mackinac Center was one of the first of the unions’ 15-point loss on Proposal 2 Dr. Richard Cutler Oakland University University of Michigan Dr. Martha Seger free-market think tanks established out- helped transform Michigan into the na- (ret.) Federal Reserve Board (ret.) side the DC beltway. From very humble tion’s 24th right-to-work state. Dr. Jefferson Edgens Morehead State University James Sheehan beginnings in the 1980s, institutes like Dr. David Felbeck Deutsche Bank Securities Look for a two-year battle to defend the law University of Michigan ours are now in every state, and the states Rev. Robert Sirico from union attempts to overturn it. If the (ret.) Acton Institute for the are where we are seeing progress. Here is Dr. Burton Folsom Study of Religion and Legislature decides to keep pushing free- Hillsdale College Liberty some very good news from the November dom-friendly reforms, look for plenty of Dr. Wayland Gardner Dr. Bradley Smith elections. Western Michigan Capital University Law ideas from our shop on how to do so. For both University (ret.) School defense and offense, the Mackinac Center is John Grether Dr. John Taylor • Three former state think tank leaders Northwood University Wayne State University were just elected to a governorship and needed now more than ever before. Dr. Michael Heberling Dr. Richard K. Vedder two U. S. Senate seats in Indiana, Arizona Baker College Ohio University And ask yourself, now that right-to-work Dr. Ormand Hook Prof. Harry Veryser Jr. and Texas, respectively. is law in Michigan — of all places — then Mecosta-Osceola University of Detroit Mercy Intermediate John Walter Jr. • More than 20 state governments (includ- can anyone doubt it is also possible to turn School District Dow Corning Corporation Robert Hunter (ret.) around the federal government? It is pos- ing Michigan’s) continue to resist the Mackinac Center for Dr. William Wilson Public Policy Obamacare takeover. Voters in four more sible, maybe even inevitable, as long as free- Economic Consultant Prof. Harry Hutchison Mike Winther states passed specific measures to limit dom fighters in the states keep working Mason School of Law Institute for Principle Obamacare’s implementation. with your support. ¬ Dr. David Janda Studies Institute for Preventative Dr. Gary Wolfram Sports Medicine Hillsdale College • Washington state voters rebuked public Annette Kirk Russell Kirk Center for Cultural Renewal David Littmann In addition to our educational election website, MIballot2012.org, the Mackinac Center Mackinac Center for published studies on five of the ballot proposals that faced voters this fall. Each carried the Public Policy weight of peer reviews, expert analysis and a guarantee of quality scholarship. 140 West Main Street, P.O. Box 568

Full text of Public Act 4 on Pages 12-27. Midland, Michigan 48640

-2-0 1-4-4 21-3-7 21-1-3 -9883921-0-6 978-0-98839 978-0-988392 : BN: 978-0-98839 ISBN: 978-0 978-0-9883921 ISbN: 2012-10 ISBN 2 S2012-08 IS 12 S2012-07 012-09 isbN: 12 S2012-11 OCt. 22, 2012 S Oct. 1, 201 Sept. 21, 20 OCt. 8, 2012 S2 oCt. 26, 20 l 3 man 4 of 2012: 989-631-0900, Fax 989-631-0964 4 ael J. Reitz and James M. Hoh 1 of 2012: 2 of 2012: An Assessment urance vernment nt Vernuccio, Paul Kersey, Mich s. nsibilities of ent taxes and Proposal Proposal ir members with an ins The Projected Economic Impact of Proposa and capacity An Analysis of Proposal Proposal 5 of 2012: An Assessment of the umes control of local go fact, the ichael Head are Council s the view provide unions and theikely repeal of these law the tional largely assume the respo ng state and local governm considerable powers. In managers By Patrick J. Wright, F. Vince gh — using different cost uality Community C s for in-home s economy. The Referendum on Publicappointed Act receiver ass policy against the unl that. If and Michigan’s Renewable Energy Standardalculations, The Unionization of In-HomeThe MQHCC Caregivers would Supermajority Tax Vote Requirementeffective at loweri c literature also support d to emergency financialver in Ecorse. * ve bargaining power in tuerck, paul Bachman and M low, medium and hi r renewable and conven ) training opportunitie intaining and is entrusted with RES in order the existing Michigan Q by Michael D. LaFaive revenue. The academiurdens improve a state’ ation www.mackinac.org [email protected] By James M. Hohman ill include 2 would do more thanifications to By David G. By Derk A. Wilcox, M.A., J.D.* se exercised by the recei But by placing collecti growth projections ngfo technologies. In our c e recipients, and by ma who would * * powers later provide local local if the RES by providing (optional would that lower state tax b ’s taxpayers d to decide Executive Summary al to amend constitution, Proposalted, even small mod * electricity-generati ity rate cost caps in the l include ill include ature suggests a tax limit were similar to tho e fallen e ballot in November w lm signed care providers and care caregiver candidates, al effects Executive Summary ullify Public emergency managers in aining” e bargaining for state andrequire a state omic impact on Michigan management 5 could help the state lot, voters will be aske nt Michigan’s statewided officially as “a propos Proposal 2 were adop we set aside electric Executive Summaryallot in November wilsal to amend a registry of in-hom nd checks. The MQHCC Executive Summary titution that If the academic liter chool District those governments hav ertified Executive SummaryGov. Jennifer GranhoEnergy l. de ballot in November w ce, if ld either approve or n The state has placed garding collective barg the scope of collectivyees in Michigan would to determine the econ f the 2008 gan Quality cipients with “financial r tax forms and nt to the state consvote of both the provision like Proposalw of the possible practic On the Nov. 6 state bal year by the afety nets meant to prevenments to Proposal 2, describ standard” officially as “[a] propo be subject to backgrou Michigan’s statewi governments only after rkplace bargaining bywould c have government emplo ment. In October 2008, then-enewable and Efficient standard is met in ful Michigan’s statewide b rgaining uch financial ajority vote of makes sense. For instancult, would it Proposal 1, which wouocal Government and S se that fail at the state constitution re t affect ces,” that in 2015, because o: to establish the Michi also provide care re nerating their employe thirds supermajority and economy, a revie t. This law, passed last ers to state- through other state s tate requires all gover d a “renewable energy Proposal 4, described y the Proposal 5, an amendme y revenue, Act 4 of 2011, the L ts that arise. — that is, exclusive woy voters, the measure constitutional amend employees into law the Clean, R provide collective theba voters, the tions on their behalf. S Senate, or a simple mpose new state of the proposal stilltax increases more diffi rnments and s. The state requires tho s, Proposal 2 would no “renewable energy sourused to Our findings suggest d Efficient Energy Act ers the state constitution services,” such as ge would require a two- tax revenues provided expanded pow insolvency. First, the s ash through the state Act. The act impose re currently provided b. ntly require Proposal 5 makes government of necessar Fiscal Accountability Ac resolve any fund defici unions. If approved b bargaining s. Most private-sector in Michigan Home Care Council and making payroll deduc Michigan House andmber election, to im managers of local gove“fiscal stress balance their budget Note that in most case mandating that specificnd biomass power, be Clean, Renewable an ty for the state’s consum workers.” If approved by economic times, when Michigan Legislature, two general effects. ective law, not state law andstate and local two general effects. management services at of Community Health y state taxes that curre perhaps deprive state this to submit a plan toovernments in raising c ould enshrine collective private-sector worker of retail electricity salesbut escalating her than it would for in-home care n uality the people in a Nove appointed emergency are in a state of serious g state and the federal including wind, solar a • The cost of electrici of the Legislature. particularly in tough that n deficits arise. gan Constitution. Coll are governed by federalal 2 primarily concerns mandates that lower measure would have ivers who Michigan Departmen t that taxes or increase an ndment The state also assists g anagement First, the proposal w generate 10 percent will be $950 million higwithin a range of ld place in the Michiga with the Michigan Q often fall? school districts that powers rmitted by longstandinrs would unions, since states, notne whether ctricity sales derive from only a majority vote ify tax nder it extra borrowing whe Michigan powers in the Michi constitution. Propos by 2015. The law also on that in-home caregtate aid, such uncil does not sugges the percentage osal 5 states that the ame history does not suggest or fiscal emergency.” ernment ith responsible fiscal m e changed only be allowed have been otherwise,04 billion; and cent First, the proposal wou Michigan’s experience requirement would reture passed rs with these additional bargaining is already peProposal 2, these powe government employeee sole power to determi 012, 2013 and 2014. ees. They would onalized itution.” This Michigan’s recent IMPACT ay their bills. percentages of retail ele x Analysis onstrued to limit or mod ies, cities, These rules, coupled governmentw units in an act of the ent employees should $850 million to $1. Constitution a provisirvices to recipients of s Community Care CoQHCC would increase The wording of Prop cted the taxes in is published six times a year by the Mackinac ointed in seven local gov ty prices will be 7.9 per lely for number xes. When the Legisla Emergency manage op financial federal law, but underp and could generally b government, have th renewable sources in 2 eiving lower-cost, pers ise created in this const supermajority tax vote er units of by local officials, helppoint where they can’t p h a radical te has used ®its State Ta have been otherwise, provide basic care sesidered public employ establishing the M “shall in no way be c , which n personal and businesste did not were subsequently app more than 2,000 count have a broader sweeional amendment, not state and local governm. model — tohis estimate study, • Michigan’s electrici overnment it figures show that therough l 5 would leave unaffe impossible to raise ta overnments still devel most union n that allows the STAMP as Medicaid, be con employees, however, so of care recipients rec limitations otherw l 5 would chool districts and oth avoid reaching the oposal 2 would establis The Beacon Hill Institu higher than they wouldercent to 8.6 percent. entitled 72 to 8 Headlee Amendmenttions on state ouse and Michigan Sena entities. The state has by a state constitut to bargain collectively ovisions of the RES mandates. In t andates — igan’s ive bargaining with a g ceiving in-home care th language means Proposa a $1.4 billion increase i who voted A small percentage of g f 1990 are oposition: the power ofptions, all ower lies in a subsectio Modeling Program — be classified as public in-home care. State aud ould not villages, townships, s ending the Legislature. Second, Pr and other ith “wages, within a range of 7.0 p 15, the ion; they would not “bemployees.” Program rose from 51,3ichigan state constitution’s 197ax and revenue limita 2007, the Michigan sH threshold that Proposa problems, however. rnments Proposal 2’s radical pto be overridden by pr the economic effects ofates of the cost of the m gy prices will affect Mich the purpose of collect of disabled people re quirement ost of the Republicansuch of the local government. l 1 would 011 and Public Act 72 o new constitutional pr, with only limited exce ployment.” e in-home blished. t. The proposal also w meet the two-third porarily suspended p cerning “wages, hours, financial greements that deal w ses and economy. In 20 agency through a unenefit reserved to such e Medicaid’s Home Helpand 2004, when the M contains a variety of t the state . If they had Center for Public Policy, a nonprofit, nonpartisan, tax- declaring state and local laws we provide three estim These increased ener an collective d nullify it. Both Public Act 4 of 2g Michigan’s local gove contracts to override dibly broad. ld continue to act as th er in that 1994’s constitutional re require. Nevertheless, ended m up voting for m . Voting “yes” on Proposa f employment” or the kably“ broad, ms and conditions of em ain text. to any other legal b 55,382 between 2002 Care Council was esta and local governmen s money The law has been tem to certify that state and local laws con collective bargaining a households, busines pervise, train d even a small ermajority vote of bothate education against the tax hike with the new tax revenue while voting “no” woulte’s previous the last step in helpinremain solvent prior to a wide range health The care recipient woufor all purposes other th average monthly numb change Proposal A of outcome of Proposal 1 isk, and they ese phrases are remar hours, and other ter term of art that is incre * Citations provided in the m RES will: Quality Community ssibility of not having anythi of them — Public and school districts cts set up a review team terms and conditions o ike smoking ill Institute for 7,220 jobs, vider.” r any increase in the st spending associated ld re-establish the sta control mpensation issues like orS caregiver’s employerg the right “to select, su In 2010, however, the6 — no improvement, neveran realized. of a three-quarters sup after all. reinstate Public Act 4, ct 4. Public ct at serious financialint r a manager support” of unions. Thcts the power to nullify This phrase is a legal the Beacon H 0 to 7,870; been faced with the po vote requirement, m ergency manager law bankruptcy. Both a cial health questions pricel of candy serves as • Lower employment by bargaining, retainin nate, an individual pro House and Senate fo x vote Nullifying the law wou tion is dire. umerous laws meant to It covers obvious co ABout tHe AutH tive director of where he also ncy program was 53,51 tial cost savings were t it ers — called the government is in fadministration to appo giving union contra economics property tax. limit due to a two-thirds taxd votes for the tax hike e would as repealed by Public A scure matters like the Tuerck is execu folk university, within a range of 6,43 and direct, or termi ouncil. lative supermajority ta exempt research and educational institute classified under local government em ive insurance benefits to so holds a ph.D. in come by $600 million, decline. Any poten lacked several both allow the state anment unit if the situa of laws, including n Dr. David G. esearch at Suf on issues of l would create a state age f Proposal 4 indicates tha ld have both might have provide ncrease. Act 72 of 1990, which w state to appoint manag powers and achines. conomics. He illion to $660 million; any ave a tax or expenditure is doubtful that the stat government spending. r local on the premises to ob laws to public policy r n extensively • Reduce disposable in hin Quality Home Care C Sixteen states have a legis at state and managers” — but they to control the gover c Act 4. mitted unionized collect professor of e and has writte Second, the proposa A line-by-line review o some extent isaster without that tax i Act 72 still allowed the us clarifications to the in factory vending m chairman and ollectively bargain with, though the dment. Michigan wou At the same time, it r a much smaller ining rsity of Virginia within a range of $540 m known as the Michigan es that have not been st, requirement, while 30 h more than “emergency financialed in Public Act 4. nted manager in Publiate-appointed State labor law has permployees since 1979; fo y allows state and local s the ent by $83 million, wit e nonbinding. would provide: rity tax vote ysts have pointed out th ct 4 often There were numero ederal employees from the unive blic economics. I. He manage he in-home caregivers like the Headlee Amen under Proposal 5 (and to have faced a financial d aterial ents of collective barga Reduce net investm to $91 million; icity The MQHCC would c care recipients in the arypa rty taxes). g public-sector of the powers includ ager to powers extended to st bargaining for state eees since 1965; and fo Proposal 2 similarl taxation and pu f research at BH • n standards would bslature. 1. No programs or servic ould reduce spending by duties of a state-appoi private-sector e.” Contract velopment and union representing t types of limitations the state’s supermajo Mackinac Center anal Other ters of nullifying Public A 4. Perhaps the most mvernment’s r workers since 1939. F be overridden by eleming financial support by an is director o thored research a range of $74 million al amendment necess section 501(c)(3) of the IRS code. government employ including the de available to in-home ng state education prope imply by benchmarkin om its elected There were also new te chman has au ousehold’s annual electr still be set by the Legi already does, given the two local governments c ould not appoint a man l 2 would Paul Bachm arch projects, olicy and negotiated compensatio se taxes in Thus, while suppor employee unions ted the same for most argaining representativ ® ed in the private sector. er Public anager to amend the go group of private-secto agreements “respect model. Mr. Ba n state labor p with no constitution new taxpayer savings $5 billion annually s cal government unit fr managers in Public Act because ernment institute’s rese • Increase the average rangeh of $65 to $80; s Compensation would requirement for raisi cholarly literature on results, the argue that the state sh hout labor law has permit. In one sense, Proposa of their collective b s nullify laws that separa the StAMp ax policy and o assachusetts e tough but was the ability of a mg agreements with its es, which deployment of sts for the M e main text. benefits to those offer as well. Failing to increa ould still allow this und e and national t conomics from bill by $70, within a No provisions creating mitations are ave lightened assume control of a lo is is a significant toolpresent the workers since 1935 provisions could thulitics by preventing gov revenue foreca commercial business’ 2. While a review of the ieldss somewhat mixed nullified. And evenvernments wit collective bargainin papers on stat International e Citations are provided in th improved care savings are possible ced legislators to mak officials, state law w Michigan’s ain text. litical money or union duponent. institute’s state $650, within * n that began inted sonnel costs tend to re government and po r of Science in • Increase the average No provisions for kinds of limitationson y balance that such li 2007 could have for decisions that would h 72 if Public Act 4 licwere Act 72, Michigan go in certain situations. Th produces the holds a Maste 3. recipients. Act local governments, and * citations provided in the m significant political com Master of 10; and literature suggests e subject to court-appo court- local government per collection of union po rable to legislature. He annual electricity bill by r ted and responsible spendingayers during the recessio Public Act 4 and Pub eitz and James M. Hohman ty. HI. He holds a ackinac Center Legal 4. No new options for care main text majority of expenses ine is highly unionized. er in only He AutHORS lyst, director of labor almost always have a ployee Suffolk universi economist at B a range of $580 to $7 h the Mackinac Center mplemented the burden on taxp roval facing insolvency may fb Ecorse was in 1986. A ABOut t nt Vernuccio, Michael J. R d be immediately vulne versity. f industrial business’s About the Authoa senior attorney with the M ver, validate the convolu : d is a research om Suffolk uni * Citations are provided in the government workforc nd the cities ublic Policy’s senior legalof ana fiscal policy, respectively. , BHI Director o interest law firm affiliatedrea witof law concerning the al Union shortly thereafter. ms, such the have exercised this pow , terms of government-em Michael Hea Increase the averageill by $21,470, within of in-home caregivers i r that the higher tax app receivers, as the city o Patrick J. Wright F. Vince Institute and an adjunct Many state laws woul nomic policy fr k Frank Conte • Derk A. Wilcox, M.A., J.D., is Proposal 4 would, howe cy Initiative at the e main text. dent and assistant director Science in eco . 23,410. acticed extensively in the a are the Mackinac center for P ctor greements. Included are uld like to than annual electricity b Foundation, a nonprofit public- e Employees Internation wledge the contributionsnd rt important tax refor Editor Emergency managersDetroit Public Schools a labor policy at the Illinois Policy nullification by the orial assistance disputed unionization About the Authoor of the Morey Fiscal Poli Similarly, it is not clear Citations are provided in th policy, executive vice presi the authors wo nergy for Public Policy. He has pr Lindsey R. Dodge * IMPACT IMPACT a range of $19,120 to $ director of research quality, a three places — the enter. thomas A. Shull, senior dire collective bargaining a ons, for his edit ose in 2005 by the Servic olicy. he would like to ackno threshold would thwa or the Mackinac Center for Paul Kersey is director of licy, for his significant Communicati elderly and the disabled. ved in litigation concerning Michael D. LaFaive is direct ector of fiscal policy, to this bout other states’ renewable e scholar with the Mackinacthe authors c wish to thank 4 January/February Policy Brief. Mackinac2013 Center for Publicthe Mackinac P Center’s senior mackinac.org 5 January/February 2013 mackinac.org uage and organization from th About the Authant director of fiscal policy at ackinac Center for Public Po nter Legal Foundation is invol ckinac Center’s assistant dir Acknowledgment: the authors have written a DisCLosure of Thomas A. Shull, ief. this policy Brief. ionization discussed in this James M. Hohman is assist of research quality at the M standards. Some of the lang Note that the Mackinac Ce James M. Hohman, the Ma Public Policy. contributions to this Policy Br studies appears again in the 2005 in-home caregiver un Policy brief. Daniel E. Montgomery Designer Viewpoint from the Archives

The Mackinac Center has been publishing Viewpoints for 25 years. Writing on Board of Directors a variety of public policy concerns, our scholars articulate the best remedies for what’s ailing government. Since we believe principle-based ideas are timeless, we dusted off one of our first Viewpoints in honor of our 25th Anniversary. FROM SEA Originally published Jan. 1, 1988 // Author: Lawrence W. Reed, President Emeritus TO The Perils of Predicting SHINING SEA

With a new year just around the corner, the air is filled with the prophesies of economic fortune tellers, but the raw materials they use to prophesy are in need of repair. Given the record, it sometimes seems we might be no worse off if we let the economists predict the weather and the meteorologists predict the economy. Economists have made notoriously The Mackinac Center is proud to faulty forecasts throughout the history of the discipline. Indeed, if they really knew as much stand alongside fellow freedom about the future as some of those finely-detailed predictions suggest, then they should be fighters from around the United routinely reaping vast fortunes in the stock and commodity markets. The fact that economists States. Every day, the country are not a wealthy class and that the few forecasters among them who are well-off usually make benefits from the fine work of more money making their predictions than actually investing in them, is a telling point. men and women in the policy trenches — in every state in Maybe that’s what the financier Bernard Baruch had in mind when he said, “An economist is a Board of Scholars guy who thinks he knows more about money than those of us who have it.” the nation — working to give everybody access to life, liberty I make these critical remarks as an economist, and one who has made more than a few forecasts and the pursuit of happiness. which dramatically missed the mark. Here are some of their most The future will always be more uncertain than most economists will admit, but other reasons recent publications: also explain why forecasting is in disrepute these days. The theories which form the bases for interpreting economic statistics are often faulty, but equally important is the fact that those The Nevada Piglet Book® economic statistics themselves are frequently defective. Here’s a sample. 2012 Much attention is paid each month to the government’s Index of Leading Economic Indicators, but the LEI is out-of-date and inaccurate. It overweights the influence of the stock market and undervalues the role of global economic developments. It does not account for the growth of the service sector in the U.S. or the declining role of manufacturing. The figures which go into the computation of the index do not take inflation into account. Inventory increases are factored By Geoffrey Lawrence positively into the LEI, though they sometimes are negative for the economy. All things considered, The Nevada Piglet Book 2012 the remarks of Paul Samuelson of M.I.T. draw the appropriate conclusion: “You could have the by Geoffrey Lawrence index saying the economy is going one way when the real economy is going another way.” (Nevada Policy Research Institute) Export data from the Commerce Department is of routinely poor quality. Even the International A shocking collection of Nevada’s Monetary Fund has argued that the U.S. has consistently undercounted its exports by about waste, fraud and abuse in 2012. 13 percent, which would mean as much as $30 billion worth this year alone. The unemployment rate is meant to be a key indicator of national economic health but it counts striking workers among the jobless. It counts members of the military stationed in the U.S. as employed. And most economists believe it probably does not accurately reflect true joblessness in the inner city, distressed rural areas, or among migrant workers and illegal immigrants. At the same time, the official rate lists a large number of people as out-of-work who are just voluntarily moving from one job to another.

Retail sales reports from the government are regularly based on a woefully inadequate sampling. Liberty Is No War on Women: How The Federal Reserve’s figures on factory utilization fail to consider the capacity of firms to Big Goverment and Victim-Politics increase output by simply using more efficient machinery. The “errors and omissions” category Undermine America’s Progress in such widely-watched numbers as the balance of trade is often large enough to seriously by Carrie Lukas and Sabrina Shaeffer jeopardize the total figure. And discrepancies between the government’s figures and private (Independent Women’s Forum) industry’s figures — in one area after another — are often significant. A refutation of the alleged “war on Finally, revisions in government statistics are common, sometimes massive and usually quite women.” belated. GNP figures for the first quarter of 1988, for instance, showed the nation’s output rising at a 2.3 percent pace. Only a month later, it was revised to 3.9 percent and that’s not likely to be the last revision. Under pressure to come up with numbers quickly, federal agencies habitually jump the gun, issuing numbers that are so premature and haphazard that their value is dubious at best. Forecasting the economic future will never be a real science, let alone an exact one, especially if the historical numbers we use are defective. The thing to keep in mind as we hear all the year- Saving the American Dream: end forecasts is this: the only thing certain about the future is that it will remain uncertain until The Heritage Plan to Fix the Debt, it gets here. ¬ Cut Spending and Restore Prosperity (Heritage Foundation) Find this Viewpoint online at mackinac.org/219 A posited strategy to solve the national debt crisis, simplify taxes, and reduce You can also subscribe to government spending. IMPACT 4 January/February 2013 mackinac.org receive these Viewpoints IMPACT 5 January/February 2013 mackinac.org directly to your inbox at mackinac.org/subscribe in Traverse City that recommended “Pirate’s Cove Adventure Golf.” That name has taken off like Kleenex to tissue. You go across the country and you’ll find names like “John’s Adventure Golf.” The name got picked up. We could never copyright it. It was too general. But they said we can say “Pirate’s Cove: The Original Adventure Golf.” We want to give guests an experience, not just a simple activity. It’s for kids and adults.

Mackinac Center: Going from accounting to the entertainment business seems like an unlikely career shift. Was it difficult making that transition? Lunt: No. That was easy [laughs]. I was never meant to be a bean counter. I needed something I could be proud of. Even after thirty years, we still run them, all of them. We still own them. My son goes around and Edward “Ted” and visits all of them to make sure everything is running smoothly. I just like to keep my fingers in because it’s fun. We employ Kathleen “Kay” Lunt around 500 people. We’re proud of that.

Mackinac Center: How did you learn With each issue of IMPACT, the Mackinac Center interviews about the Mackinac Center? one of its supporters to highlight the people behind what we do Lunt: A friend had told me about them, so I investigated and found out that I agreed in support of free markets. This issue, we feature Edward “Ted” with what they were doing. Years ago, I Lunt of Midland, who owns “Pirate’s Cove Adventure Golf.” was on its Mid-Michigan board of advisors. They said they were a think tank, so I wanted to give them things to think about [laughs]. Mackinac Center: Tell us about your in Traverse City. We went to the highway work experience. department to get their statistics and Mackinac Center: What value do you Lunt: I’m really an entrepreneur. We got counted the cars by the site we were believe the Mackinac Center provides? into this golf business in 1982. We’ve looking at, how many campsites were in Lunt: I think they bring tremendous value. got 26 of them all over the East Coast, the area, how many hotel rooms, you name I think it’s a great organization. It fights from Bar Harbor, Maine, all the way it, condos. We figured if 1 percent came by the battles that no one else does. That’s down to Orlando. I worked 22 years as with three people playing, it would work. why I like them and that’s the value. I an accountant. My father was one, and I We presented our financial projections, believe in what they teach, but I don’t have headed in that direction, but it wasn’t for and they just laughed me out of the room. the time or energy or the resources to do me. I’m an entrepreneur at heart. So in So I cut the projections in half, then went anything about it. So I’m really glad to have 1982, I decided to chase my dreams. back to the same banks and they said, the Mackinac Center out there. “That’s more realistic.” But the reality of it Mackinac Center: With businesses Mackinac Center: Was it difficult was my original projections were a whole and locations all over the country, why convincing a bank to finance this lot closer to what actually happened. do you stay in Michigan? amusement venture? That’s one of my proudest moments. We Lunt: At first, yes. They told me, “You’re knew what we were talking about. Lunt: Friends and family. We have a place nuts! This is miniature golf in Michigan.” in Petoskey that we go to in the summer. But we did it. Mackinac Center: Is it miniature We love Midland. It’s a nice town. I’ll never golf or putt-putt? sell my house here. It’s nice to go to the Mackinac Center: How did you Lunt: Neither. It’s “adventure golf” [laughs]. farmer’s market on Saturday morning and convince them? When we started, we did not want to be run into five people you know or go to the Lunt: We tested the daylights out of the “putt-putt” or miniature golf, we wanted mall and bump into old friends. It’s just market. We decided to build the first one something different. There’s an ad agency friendly. It just works for us. ¬

IMPACT 6 January/February 2013 mackinac.org Mackinac MEmo

Proposal 5’s failure could very well be an E lection RECAP invitation to higher fuel taxes, a proposal Mackinac Center analysts’ personal takeaways on ballot proposals floated in the past by Gov. Snyder. LEGISLATIVE LABOR stamp the overreach by Big Labor. The New GOP Retains “Trifecta-Plus” Obama wins, unions lose – the 2012 York Times went so far as to call the Propos- Control of Michigan Government election recap al 2 defeat “an embarrassing loss for labor” in the “cradle of unionism.” By Jack McHugh — Michigan will retain By F. Vincent Vernuccio — Michigan was among the states that sent President Obama The defeats show that momentum is with its “trifecta-plus” status for the next two easily back to the White House, not to men- the reformers. The tide is turning, and will years, where one party (the GOP) has control tion a Democratic senator to Washington. potentially begin to favor workers, taxpay- of both houses of the Legislature, the The same voters who voted Democrat, how- ers and job creators above moneyed special governorship and the state Supreme Court. ever, rejected union overreaches and sup- interests. Republicans did lose five seats in the House ported government labor reform. FISCAL of Representatives, however, going from a All five constitutional amendments on the Proposal Losses Invite Concerns 64-46 majority to 59-51 (the Senate was not ballot were defeated, but Proposals 2 and 4, for Taxpayers up for election this year). both heavily backed by unions, attracted the By Michael D. LaFaive — Voters on Nov. 6 That was not unexpected following the Tea most attention. said “no” to each of the six Michigan-specific Party “wave” election of 2010. Importantly, ballot proposals presented to them. Those Besides the presidential election, Proposal no prominent legislative reformers were 2 was organized labor’s first priority on ballot proposals covered labor, energy, defeated (including Rep. Mike Shirkey, November ballots. The proposal would have transportation and fiscal policies. While all R-Clark Lake, targeted for his identification upheaved representative government in topics ultimately involve taxpayer dollars with a grass roots right-to-work movement). Michigan by enshrining collective bargain- of some sort and level, Proposals 1 and 5 hit ing in the state constitution, giving govern- closest to the fiscally minded. The most significant impact on future ment unions an effective veto over elected Proposal 1 would have affirmed Public Act 4, legislation was the sound defeat of Proposal officials. If unions had been successful in the law that gave emergency managers more 2, discussed elsewhere in this issue. While Michigan, they likely would have tried simi- power to make financial changes in local government employee unions have hardly lar efforts in some of the 18 other states units of government. Proposal 5 would have become a paper tiger, even after this rebuke that allow ballot-initiated constitutional mandated a supermajority vote requirement from the electorate, many Democratic amendments. for the Legislature to raise taxes. voters showed themselves quite willing to Proposal 4, equally damaging in its own Proposal 1 narrowly collected more “no” diverge from union orthodoxy. This will right, would have permitted the continued votes than “yes” votes and thus the state make it easier for the Legislature to build on stealth unionization of home-based caregiv- reverted back to the previous emergency the financial reforms of the past two years. ers by the SEIU. The majority of these work- financial manager law (Public Act 72 of Among other things, the Proposal 2 defeat ers are friends or family members of their 1990), a law that grants far less power to patients, and certainly not government em- EFMs. Proposal 5 appears to have gotten meant that making Michigan a right-to- ployees. Prop 4’s defeat keeps about $6 mil- swept up in anti-initiative enthusiasm and work state was possible — and legislators lion per year in the hands of caregivers – not the pithy slogan “one is a yes, no on the rest” were able to pass that right-to-work law in in union coffers. or some version of it. December — a stunning development in a

Both proposals received more “no” votes Going forward, the Michigan Legislature (previously) union-dominated state whose than the “yes” votes President Obama re- has already introduced a new emergency Legislature voted as recently as 2005 to ceived in Michigan, meaning that many of manager law that gives locally elected name a highway after the 1936 Flint “UAW his supporters were unwilling to rubber- officials more power over the process. sit-down strike.” ¬

D ID YOU SEE IT? On Oct. 30, the Mackinac Center broadcasted an hour-long live, interactive webinar on the 2012 ballot proposals from its office in Midland. For more information, email the editor at [email protected] and request to receive our email publications.

IMPACT 7 January/February 2013 mackinac.org Education Notebook with Michael Van Beek

Michael Van Beek is director of education policy at the Mackinac Center.

Each Tuesday, the Mackinac Center emails a free roundup of education news from around the state. Go to mackinac.org/subscribe to get it delivered to your inbox. Here’s a sampling of education headlines.

------Oct. 16, 2012 State refuses request for names of ineffective principals

Oct. 2, 2012 Teacher union contract would allow some alcohol and drug use

Oct. 2, 2012 Federal meal guidelines cause Alcohol and Merit Pay student (and stomach) grumbling Oh, the things you find in a teachers union contract Sept. 18, 2012 Roscommon teachers leave For the last couple of months, I spent a like this went a long way to educate voters Michigan Education Association good portion of each day reading pub- about what they might be unleashing if they Aug. 28, 2012 lic school teacher contracts. Slogging let union contracts trump state law. Oxford district’s AstroTurf could through legalese can be painful, but fruit- The second discovery related to Michigan’s cost some their homes ful, and goes to show how the Mackinac new merit pay law, which requires schools to Center operates as one of the state’s most use job performance as a “significant factor” July 31, 2012 effective watchdogs of government labor Teachers unions give $1 million when setting teacher compensation. I found unions. to ‘Protect Our Jobs’ initiative that the vast majority of districts were The Center maintains a database that paying teachers almost exclusively based Sept. 4, 2012 contains every public school union on years on the job and college credentials First charter district opens today contract in the entire state — more than and ignoring merit entirely. Although they in Muskegon Heights 5,000 contracts dating back to 2004. are educated and trained as professionals, Every year, we update this database by under union contracts, teachers are paid like adding new contracts and posting all of interchangeable assembly-line workers. them online. In an average month, users What’s worse, almost all of the districts that access this online database about 2,000 PROGRESS FOR MICHIGAN times. did use merit pay were making a mockery of The Widening Advancements for it. For instance, many districts’ definition of With this enormous amount of information Youth program (subject of a recent merit pay was a bonus of less than 1 percent at my fingertips, I was able to analyze more Mackinac video — viewable at of an average teacher’s salary. A few districts than 100 union contracts and make two mackinac.org/15949) opened a new paid proven teachers only a few bucks important discoveries. The first was that the charter school in Detroit that will use Bay City contract gives teachers the luxury extra. What an insult to the profession! “blended learning” and personalized of being under the influence or in possession Fortunately, there are legislators who are instruction to educate students who’ve struggled in traditional of alcohol on school property five times now working to make sure great teachers classroom settings. before they can be fired. Likewise, they can are properly rewarded. be in possession of illegal drugs on school This level of analysis and research is one property two times before the district can that only the Mackinac Center provides to Watch the let them go. the public. These contracts impact a large video with If Proposal 2, the so-called “Protect Working portion of how each district operates, so this QR Families” constitutional amendment, had collecting and analyzing them is critical to Code! passed, this provision would have remained understanding how districts function and, in in effect in Bay City. Our coverage of abuses some cases, dysfunction. ¬

IMPACT 8 January/February 2013 mackinac.org The Overton Window // A Case Study

The Overton Window of Political Possibility

The Overton Window, as coined by the Mackinac Center, is but by what he or she can support without jeopardizing re- a model to explain how changes in public policy occur. When election. As society embraces new ideas, the Overton Window evaluating the options within any specific public policy issue, shifts to include additional public policy options that were only a relatively narrow window of options will be considered previously deemed unacceptable. Meaningful policy change politically acceptable by politicians. The window of acceptable may take decades. Or, as in the case of a teenage hot dog vendor, policies is not primarily defined by the politician’s preference, policy may shift rapidly in a matter of weeks.

1. Situation 3. Mackinac Cities across the Center nation adopt Response policies that protect On July 25, the favored businesses Mackinac Center from competition released a video by stifling report on Nathan’s entrepreneurial plight. The video endeavors. An went viral, with ordinance in Holland, more than 100,000 Mich., prohibits food views in just a few carts not connected weeks. The story to brick-and-mortar was picked up by restaurants in the Fox News, USA city’s downtown Today, Reason.com, commercial district. the Huffington Post, National 2. Nathan’s Cart Review Online and Shut Down several Michigan newspapers. The On July 17, 2012, Center stressed 13-year-old Nathan that municipalities Duszynski opened should encourage a hot dog stand in small business order to earn money growth — not to assist his disabled strangle it to parents. Ten minutes protect existing after opening, businesses from however, Holland competition. city officials ordered Nathan to shut down 4. Holland his food cart. In Response defending the city’s On Aug. 15, the policy the mayor Holland City Council of Holland stated: voted unanimously “[Local businesses] to allow Nathan asked that the to operate his success of this space food cart under a not be infringed upon temporary permit. by those who don’t The mayor also choose to share in the announced plans 5. Resolution costs of maintaining to reach a long- Nathan opened his hot dog cart on Aug. 23 with broad community support and the attractiveness of term resolution for media coverage. The mayor of Holland stated that the Mackinac Center’s coverage this space.” mobile food carts. of the issue helped “color the lens” for the national attention the story received. ¬ Watch the original Hot dog Learn more about Nathan’s Video Here story at MichCapCon.org

Find out more about the Overton Window at IMPACT 9 January/February 2013 mackinac.org mackinac.org/ overtonwindow From the cover: Tuesday, Dec. 11, 2012: Several thousand protesters in Lansing gathered on the grounds of the state Capitol to protest a right-to-work bill. Right to Work How a longshot principle became a legislative possibility

When Indiana became the 23rd state The only thing unions have to fear fight left in unions clearly is forgetting to adopt a right-to-work law early in from right-to-work is the free New Hampshire in 2011, where after 2012, many thought such an option choice of the very workers union massive media campaigns from the was a long way off for Michigan. With leaders say they are in business unions, a right-to-work bill was vetoed the 5th highest unionization rate in the to help. by Democratic Gov. John Lynch. Or the country, comparatively high taxes and In 1995, only 19 states had a right-to- referendum in Ohio that would have a reputation as the cradle of collective work law and none of them were in brought public employee health care bargaining, Michigan seemed like too what had by then come to be known as costs in line with private-sector aver- far a reach for even the most commit- the Rustbelt; the Indiana Legislature al- ages, among other things, which 61 ted worker freedom advocates. most passed a right-to-work law which percent of voters rejected. Now Michigan is the 24th state to was vetoed by then-Gov. Evan Bayh; But the truth is, a right-to-work law adopt a right-to-work law, which pro- and the Teamsters and allied AFL-CIO is beneficial to all workers, and the tects employees from getting fired for unions had gone on strike against The Mackinac Center has been pro-worker refusing to financially support a union. Detroit News and Detroit Free Press. since 1988. How far was the state conversation Mackinac Center President Joseph The benefits of a right-to-work law from a right-to-work law in Michigan Lehman put it best when he said, “When are not only offering opportunities that the unions could strike against I left the house for the state capitol last to young workers in state, increasing legacy media and still feel the national Tuesday morning, Michigan didn’t have wages, lowering unemployment, in- conversation was in their hands? a right-to-work law on its books. By creasing disposable income or attract- the time I got home around midnight, The conversation has officiallying new business, though it does all of it did. Gov. Rick Snyder’s signature on changed since the “Workplace Fairness those things. There’s a moral compo- those bills marked the apogee of a two- and Equity Act” was signed by Gov. Sny- nent, too. It is simply not justifiable in decade arc drawn from the politically der on Dec. 11, 2012, and much of the an advanced country like the United impossible to the politically inevitable.” policy education is due to the Mackinac States that a worker can lose their Back in 1995, Mackinac Center Presi- Center’s relentless commitment to the job for declining to pay union dues or dent Lawrence W. Reed landed a Mack- economic benefits a right-to-work law agency fees. That sort of institutional- inac Center Op-Ed on right-to-work would bring to the beleaguered state of ized groupthink should be anathema to legislation in the Detroit Free Press. He Michigan. our legal system, and is anathema in a wrote: But anyone who says there isn’t much growing number of our states.

IMPACT 10 January/February 2013 mackinac.org IMPACT 11 January/February 2013 mackinac.org Unions themselves are victims of their own groupthink. The first and longest-serving president of the Ameri- See, read or watch our extensive right-to-work can Federation of Labor, coverage at mackinac.org/ Samuel Gompers, once right-to-work said, “There may be here and there a worker who for certain Walker had fathered an illegitimate we willing to tolerate young gradu- reasons unexplainable to us does not child couldn’t save the union recall ates and workers fleeing the state in join a union of labor. This is his right attempt this past June. Now, with the search of employment before con- and no one can dare question his exer- failure of union-backed Proposals 2 crete measures were taken to ensure cise of that legal right.” and 4 and with a right-to-work law in opportunities at home? Or refer to the touted champion of Michigan, it is conceivable that the Just look to Indiana – which, if truth labor relations, President Franklin Great Lake State will become a desti- be told, is not known for having glori- Delano Roosevelt, who despite being nation for our children and our chil- ous weather in comparison to Michi- politically subject to the other great dren’s children once more, and not labor state, New York, said “Meticu- just a nostalgic pang from reruns of gan. The state has added 43,300 jobs lous attention should be paid to the Pure Michigan commercials. since January, while Michigan has lost 7,300. Indiana’s manufacturing special relations and obligations of The proof is in the pudding: union public servants to the public itself and membership is in decline across the sector is growing; Michigan’s is de- to the Government. … The process of board. The number of union members clining. And above all else, the Indiana collective bargaining, as usually un- is 12 percent nationally and a meager manufacturing worker is out-earning derstood, cannot be transplanted into 6.9 percent in the private sector. Even the Michigan manufacturing worker, the public service.” in a strong union state like Michigan, even with the numerous new jobs Imagine these labor-heroes’ conster- there are almost 50,000 fewer union added. nation at hearing that millions are members compared to 2009. A right-to-work law means more and spent on anti-right-to-work media This is perhaps due to unions’ anti- better jobs. It creates opportunities campaigns by labor unions them- quated business model. Currently in that allow future generations to stay selves, or that the Michigan Public forced unionism states, like Michigan and prosper in Michigan, and it em- School Employees Retirement Sys- was, they can take their members for powers union members to expect the tem has saddled taxpayers with a granted because workers who don’t most from their representatives and $22.4 billion unfunded liability. The pay them will be fired. A right-to-work their employers. country has come far from where it law forces these union leaders to prac- started in promoting workers’ rights. tice “servant leadership,” because the But the new right-to-work law will The amount of money that goes possibility of not being paid for poor not go into effect until April, giving straight to union pockets is stagger- service is a viable alternative. unions over 90 days to negotiate new ing, but there is hope for their stran- A right-to-work law is bigger than or extend old contracts. It is entirely glehold on state budgets: the first unions, because it will now help the possible that they will choose con- state to allow public-sector collec- entire state be more attractive to em- tract extensions and union security tive bargaining was Wisconsin in the ployers. We face an entrenched unem- clauses over their members’ benefits. 1950s, but even a last-minute smear ployment rate that has plagued us for The Mackinac Center will be here to campaign alleging that Gov. Scott far longer than the national recession, defend the reform against all attacks and returning jobs to Michigan ought and educate residents of Michigan to be our number one priority. Michi- about the benefits of the law. We gan was the only state to lose popula- hope that, by serving the taxpayers of tion during the last decade, according Michigan above all others, we will arm to the Census. How much longer were them with the most powerful bargain- The Center seeks to empower all ing tool: choice. ¬ workers to choose what’s best for them and their families.

IMPACT 10 January/February 2013 mackinac.org IMPACT 11 January/February 2013 mackinac.org A Snapshot From the Center Dec. 11, 2012: Protesters at a right-to-work demonstration in Lansing take a lap around the Michigan Capitol.

Gorgeous photo will go here

IMPACT 12 January/February 2013 mackinac.org IMPACT 13 January/February 2013 mackinac.org Managing Director of Advancement

Transparency Law Escapes Big Labor Chokehold By Michael D. LaFaive and Ted P. O’Neil

One of the least reported, but most Sunshine Review, a leading advocate Michigan’s Freedom of Information frightening, aspects of the now- of government transparency, also Act law has its roots in the 1970s defeated Proposal 2 was its potential promoted The Detroit News piece. Watergate-era desire to make

impact on Michigan’s Freedom of The MPA represents member government more open. It gives Information Act. Proposal 2 would organizations such as Heritage News scholars, journalists and just plain folk have given primacy to stipulations in and is dedicated — as its homepage access to public documents subject collective bargaining agreements over says — to “Preserving press freedoms to some obvious boundaries, such as state laws such as the FOIA, making it … ” among other duties. Government personal tax information. possible for government union leaders transparency is key to the work of Michigan’s FOIA is extremely to suppress information that was journalists everywhere, so the MPA powerful, despite public officials’ once available to both journalists and had a keen interest in the potential attempts to make it less so. It was everyday citizens. damage Proposal 2 could inflict. the FOIA that helped the Detroit

The Mackinac Center for Public Jim Young, Michigan Press Association Free Press acquire electronic Policy was the first organization in president and publisher of the Oceana communications between former the state to point out this unique Herald-Journal, argued that, “Even Detroit Mayer Kwame Kilpatrick and angle to Proposal 2, shortly after the with the FOIA in effect, governments others that ultimately brought an end Michigan Supreme Court approved its can make it hard to report vital to Kilpatrick’s administration. placement on the ballot. In addition news that affects Michigan citizens Mackinac Center analysts use the to posting stories on its website, the directly. Proposal 2 offers a change FOIA to some degree almost monthly, Mackinac Center also distributed its to the constitution that could have collecting data on everything FOIA-Prop 2 work through Michigan chilling effects on citizens’ right to from school district contracting to Capitol Confidential, a special Op-Ed know.” The press release was picked government pay, not to mention to The Detroit News and by issuing up in stories by both the Detroit Free corporate welfare subsidies for a joint press release on the subject Press and Lansing’s Gongwer political new manufacturing plants to movie

with the Michigan Press Association. newsletter. continued on next page

IMPACT 12 January/February 2013 mackinac.org IMPACT 13 January/February 2013 mackinac.org studios. Indeed, Mackinac “Bob, I’m concerned about In 2010 the Mackinac Center Center’s research arguably led and the MPA teamed up to try to the unraveling of a movie (redacted). It is certainly and preserve the sanctity of studio subsidy package in which (redacted). Can we talk Michigan’s FOIA, only to have the Michigan Supreme Court refuse we discovered, through a FOIA about this? I think it will request, that the film subsidy to hear the case. The Mackinac Center Legal Foundation and program director agreed with not (redacted). Moreover, MPA filed a joint amicus brief at the Mackinac Center. “So (redacted). Moreover, it the Michigan Supreme Court in disappointing,” she wrote in an 2010 in a case involving Howell email. “It looked so promising. But demonstrates (redacted).” Public Schools. Chetly Zarko, a it’s not. This time I am agreeing citizen journalist who has since with the Mackinac Center.” passed away, sent a FOIA request Michigan Capitol Confidential has also used the FOIA to to the Howell schools requesting emails generated on the advantage of taxpayers, requesting several years ago government-owned computers and sent by teachers that school districts begin publishing their checkbook union officials there regarding contract negotiations. registers online. Dozens of districts complied, and the Zarko made his request to try and determine if union Legislature eventually passed a law requiring districts to business was being conducted using taxpayer-funded post several layers of financial data on their websites. equipment. The Michigan Court of Appeals had ruled FOIA requests, however, are not always met with such that Zarko’s request should be denied, claiming that the pleasant outcomes. Inquiries sent to the labor studies content of the emails was not official school business and departments at three Michigan colleges in 2011 drew so did not qualify as a public record. bomb and death threats to the Center and a protest The Michigan Supreme Court let the appellate court’s outside of our headquarters. The Mackinac Center drew decision stand, a “disastrous” ruling according to Patrick support from some unlikely sources at the time when J. Wright, director of the MCLF. He pointed out that Jack Shafer, media critic at Slate.com, wrote in response, government officials could use the decision to hide “There’s no such thing as a bad FOIA request.” illegal activity, since it would also not qualify as “official Sometimes these FOIA requests lead to almost amusing business.” Unfortunately, this legal win did not stop cover-ups from our state’s top players. The Mackinac government unions from trying to limit transparency Center requested information through the Freedom of into their affairs, such as with Proposal 2. Information Act from Michigan State University and was The bottom line is that if FOIAs were not an effective rebuffed with a series of redactions. tool for monitoring the work of our government, state In 2011 Michigan State University redacted 100 and local officials wouldn’t work so hard to avoid percent of an email that was two pages in length, and the embarrassing truths sometimes revealed by this redacted most of several other emails in question. This transparency law. Big Labor may not have set out to “response” was designed to be a finger in the eye of the subsume the FOIA with its support of Proposal 2, but we Mackinac Center, as the Center had recently caught one are confident it would have taken little time for Big Labor of its scholars plagiarizing and made that fact public. or Big Politicians to do so. ¬ Technically, MSU responded to the Mackinac Center’s Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at FOIA request, but the information contained therein was the Mackinac Center. Ted P. O’Neil is media relations manager. useless. In one of the documents — which can be found on our website — a heavily redacted email reads: EXHIBIT A Bob, I’m concerned about (redacted). It is certainly Read the full story of the MSU email at MichCapCon.com/14506 (redacted). Can we talk about this? I think it will not (redacted). Moreover, (redacted). Moreover, it demonstrates (redacted).

IMPACT 14 January/February 2013 mackinac.org Cultural Pitstop with Lindsey R. Dodge

Lindsey R. Dodge is the editor at the Mackinac Center Tax v. Price: The Morality Cost

2012 could be called, by those with wary eyes which person you are: At the end of the day, you pay toward Washington, D.C., “the year of the tax.” With both taxes because you have to. Understanding the Taxmageddon, the so-called “fiscal cliff” and of course value of choice in a moral action makes it easier to the Supreme Court’s decision deeming Obamacare’s understand why market price is, fundamentally, more individual mandate “a tax,” it seems tax increases are on moral than taxation. the horizon, whether we like it or not. Those who vilify this notion will push it to absurdity Certain legislators and legacy media’s didactic insistence and ask then whether any tax is moral, and whether that raising taxes is the only solution reflects their government should cease to exist. In reality, however, dawning realization as to how much debt the federal we are born to a government that exists for our government actually faces. service, and while we pay for the right, we too rarely

But this attitude disregards the reason they need more get a choice in how it spends our money. More than money (they spend too much), as well as the source of ever, it seems legislators want to entirely dismiss the the money to begin with (taxpayers). Theirs is the kind “exchange” element in favor of “take, take, take.” (That of desperation of a cornered bandit in an alleyway, is: tax, tax, tax.) reaching for a trash can lid as his weapon. Take for instance the heavily lampooned subsidies in

But even the taxpayers’ money comes from somewhere, Michigan for the Chevy Volt. With an inordinate amount and generally it’s from a job and investment – or value, if of offered subsidies, potentially costing taxpayers up to you will. And what can the taxpayer do with this money? $250,000 a piece, the Chevy Volt sold only 6,000 cars by Perhaps they’ll buy a car. Or an e-book. Or perhaps December of 2011. Now, if you compare that to another they’ll radically overspend by most people’s standards “green energy” vehicle like the Toyota Prius, you see the and buy a $7 cup of coffee. Who knows? The amount stark difference between empowering the consumer of money being spent comes down to how much that and dictating their choice. In 2000, before the federal individual is willing to pay for something — how much government got in the business of subsidizing retail they value something — which we can approximately sales of electric or “green” cars, the Prius sold twice call that object’s “price.” So in effect, price comes down to as many vehicles as the Volt did in 2011 (and it’s now personal choice. Someone chooses to participate in the the third best-selling car in the world). One solution exchange or not. is one-sided, the other two-sided: which will be more constructive towards order, peace and prosperity? Not so with taxes. A tax is what the government is willing to make you pay for something. While some The one that honors both participants in the exchange. ¬ people are willing to pay certain taxes, and other people are willing to pay other taxes, it matters little

Ballot Education Percentage69 of voters Percentage28 of Obama by the Numbers who recalled hearing the voters that voted Mackinac Center’s story “No” on Prop 2, the Policy briefs5 on the about a school union proposal to enshrine The Mackinac Center set a media150 interviews collective bargaining priority of educating citizens individual ballot initiatives contract that allowed teachers to come to in the Michigan state about the details and effects constitution of the measures on the school drunk five times November ballot. Here are a before being fired few statistical takeaways.

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