The Newsletter of the Mackinac Center for Public Policy www.mackinac.org FALL 2012 Check the MIballot2012.org flap! MIballot2012.org MIballot2012.org A QUICK Michigan voters will face a multitude of ballot REFERENCE GUIDE TO proposals when they go to Michigan’S the polls this November. BALLOT Several proposals involve PROPOSALS special constituencies, Senior Investigative Reporter Anne Schieber: particularly public-sector Proposal 1: unions. Referendum on the The “collective bargaining” Emergency Manager Law Tales From a Hot Dog Cart amendment, for example, Referendum on a 2011 state would allow unions t’s unpredictable what sets off a sixth or seventh to call. I was the first. law that expanded the authority firestorm. I am referring, of course, The media was missing this or simply of state-appointed emergency unprecedented power toI the case of 13-year-old Nathan not recognizing how outrageous it truly managers in fiscally failing school over legislators. Another districts and local governments. Duszynski, who wanted to help his was. Nathan’s mother, Lynette Johnson, The expanded powers include measure would provide struggling family by running a hot dog answered the phone and began invalidating government union constitutional protection labor agreement provisions. cart in downtown Holland. Nathan’s reiterating his story, with for the unionization of fledgling business was shut down within an additional bombshell. Proposal 2: home-based caregivers who minutes of opening by a city zoning She and Nathan’s stepfather The ‘Collective Bargaining’ receive Medicaid payments. Amendment officer. Patrick Wright, director of the were hoping Nathan’s business Join the conversation on This proposal would enshrine Mackinac Center Legal Foundation, could turn into a family operation so union collective bargaining power Facebook and Twitter! spotted the story online from the that they could get off government in the Michigan Constitution. It The Mackinac Center has Holland Sentinel. “Hurry before your old assistance. It was an ideal setup for would allow government unions to overrule a multitude of laws at the created a Facebook page station beats you to it,” he alerted me. disabled parents having a difficult time bargaining table – laws that were called MIBallot2012 where It was indeed a powerful story, and keeping normal working hours. passed by elected representatives. you can debate, discuss I figured that at the very least, we could I found Nathan at his hot dog cart Proposal 3: and review the facts earn Nathan some more local news. with a “for sale” sign. He greeted me ‘25 x 25’ Renewable regarding the upcoming Energy Standard I thought I would have been the see “Tales From a Hot Dog Cart” Page 4 ballot proposals. Go to This proposal would mandate www.facebook.com/ in the state constitution that 25 MIBallot2012 for more percent of Michigan’s energy come from renewable sources – such as information. Join the CONTENTS wind, solar and biomass – by 2025. conversation on Twitter The accompanying increased School Pension Reform: with #MIBallot2012 or 2 President’s Message cost to renewable energy will make it even less competitive with follow our lead at 3 Brooks/Goldberg Events Leaving a Legacy, Not a Burden traditional energy sources. @MackinacCenter. 6 High School Report Card n 1996, Gov. John Engler made a bold move. In system’s price tag without crossing collective Proposal 4: To access our full range 8 Donor Profile a lame duck session, he tried to close all the state bargaining demands. The Unionization of of information on 8 Managing Director’s Letter government’sI defined-benefit pension systems. Home-Based Caregivers We showed in a 2010 study that these benefits these proposals, visit 9 New Employees While he was not able to get all that he wanted, This proposal would allow a were financially exhausting, but also that they continuation of the statewide the Mackinac Center’s 10 Free-Market Fundamentals Michigan became the first state government to were profoundly unique when compared to unionization of people who care for homepage for all ballot- disabled adults in their own homes. 11 Issue Updates close some of its pension systems and other Michigan residents. We The majority of these home-based related information at 12 100 Years of Milton Friedman instead offer new employees a defined- benchmarked to 24 major Michigan caregivers are caring for family www.MIBallot2012.org. contribution retirement system. While private-sector employers and found members. The Legislature has already enacted two laws – 2012 this was an achievement in the ‘90s, one that few offered benefits as generous PA 45 and 2012 PA 76 – in an effort of Michigan’s largest financial drains as what was available to school to end this illegal unionization. continues to be the largest system that employees. Proposal 5: remained open: the Michigan Public These studies went largely The Two-Thirds Majority School Employees’ Retirement System. unanswered, until a new governor Tax Limitation Since that legislative discussion and and Michigan legislature were This proposal would require a “Michigan needs a implementation in 1996 and 1997, this curious about closing the pension two-thirds majority of the Michigan ‘liberal, progressive House and the Michigan Senate retirement system has incurred a system. We answered with a study for a state tax to be imposed, think tank’ to combat increased or broadened. Existing $22.4 billion unfunded liability for Earlier this year, we published showing that the Engler reforms the Mackinac Center.” tax limitations in the Michigan “MPSERS and MSERS: Three the state. The costs to catch up on had saved the state from racking Constitution would remain — Bruce Fealk of Michigan Pension Policy Briefs,” a collection of unaffected. Rising on The Frank this underfunding weigh constantly studies about the state government’s up $2.3 billion to $4.3 billion in major pension systems. The Beckmann Show on struggling legislators, who try compilation is available at unfunded liabilities. to find ways to lower the pension www.mackinac.org/17128). see “Leaving A Legacy” Page 5 President’S MessAGE BOArd OF DirectOrs D. Joseph Olson, Chairman R. Douglas Kinnan Retired Senior Vice President Senior Vice President and CFO, Will the Union and General Counsel, Amerisure Insurance Amerisure Companies Edward C. Levy Jr. Power-Play Backfire? Joseph G. Lehman, President President, Edw. C. Levy Co. Mackinac Center for Public Policy Rodney M. Lockwood Jr. Joseph J. Fitzsimmons President, Lockwood t’s said that the martial art of Judo involves using an Retired President, Construction Company, Inc. University Microfilms opponent’s strength and weight against him. Michigan Joseph P. Maguire Dulce M. Fuller President, I Owner, Woodward and Maple Wolverine Development unions used their formidable organizational and financial Corporation Richard G. Haworth might to place three proposals on the November ballot, Chairman Emeritus, Richard D. McLellan Haworth, Inc. Attorney, McLellan Law Offices launching a conversation about organized labor’s place Kent B. Herrick Hon. Clifford W. Taylor President and CEO, Thermogy Retired Chief Justice, in Michigan. That conversation may continue long after Michigan Supreme Court Joseph G. J.C. Huizenga Election Day – and may very well backfire on these President, Westwater Group Lehman behemoths of organized labor. Phil F. Jenkins President Chairman, Sweepster Inc. Here’s how it happened. By bankrolling Proposals 1, 2 and 4, the unions instigated a massive public debate on the merits of BOArd OF SchOLArs unionized government. These campaigns guaranteed tens of millions of Dr. Donald Alexander Charles Meiser dollars would be spent by both sides to get voters to think about the cost Western Michigan University Lake Superior Dr. William Allen State University (ret.) and quality of unionized schools and state and local government. Michigan State University Glenn Moots Dr. Thomas Bertonneau Northwood University Prop 1 gives unions a chance to kill the emergency manager law, Writer and Independent Scholar Dr. George Nastas III through which union contracts can be set aside to bolster fiscally Dr. Brad Birzer Marketing Consultants Hillsdale College Dr. John Pafford distressed schools and municipalities. Unions want a “no” vote on 1. Dr. Peter Boettke Northwood University George Mason University Dr. Mark Perry Prop 4 is a direct response to the Mackinac Center’s exposure of the Dr. Theodore Bolema University of Michigan - Flint SEIU’s indefensible skimming of $32 million (and counting) from home- Anderson Economic Group Lawrence W. Reed Dr. Stephen Colarelli Foundation for based caregivers of Medicaid recipients. Prop 4 carves their scheme into Central Michigan University Economic Education Andrew Coulson Gregory Rehmke the constitution and unions want a “yes” vote on 4. (By the way, they can Cato Institute Economic Thinking/ E Pluribus Unum Films use most of their ill-gotten $32 million for their campaigns.) Robert Crowner Eastern Michigan University (ret.) Dr. Steve Safranek Ave Maria School of Law Prop 2 is by far the most important of any that will appear on the Dr. Richard Cutler University of Michigan (ret.) Dr. Howard Schwartz ballot. This constitutional amendment completely alters Michigan’s Oakland University Dr. Jefferson Edgens Morehead State University Dr. Martha Seger power structure by giving government union contracts the ability to Federal Reserve Board (ret.) Dr. David Felbeck override legislation, past, present and future. It also would make a right- University of Michigan (ret.) James Sheehan Deutsche Bank Securities to-work law impossible. Dr. Burton Folsom Hillsdale College Rev. Robert Sirico Acton Institute for the It’s not feasible to estimate the whole cost of putting unions in charge, Dr. Wayland Gardner Study of Religion and Liberty Western Michigan University (ret.) but we are certain it is a minimum of $1.6 billion annually. Unions want a Dr. Bradley Smith John Grether Capital University Law School Northwood University “yes” vote on 2. Dr. John Taylor Dr. Michael Heberling Wayne State University Baker College Unions opposed sweeping reforms last year in Ohio and Wisconsin.