Michigan Business Tax...still the worst

The new Michigan Business Tax goes into effect January 1, 2008.  How will this new tax effect Michigan's economy? Read on...

The Michigan Business Tax: Good or bad for the economy of this state?

For thirty-plus years Michigan businesses have paid taxes under the "Single Business Tax", which the National Taxpayers Union called the worst business tax in the nation. It was confusing and difficult to comply with. It penalized employers for hiring new employees and providing them with health insurance. In the late 90's legislation was passed to phase out the SBT completely by the end of 2009 and not replace it. Last year the phase-out date was moved up two years, to the end of 2007.
 
Discussion began last summer about replacing the SBT because it brought in $1.8 billion in revenue per year. Some, (myself included) believed we should stay with the original plan to NOT replace the SBT.  Others, like the governor, said we needed a "revenue neutral" replacement. Still others suggested a replacement tax that was smaller, simpler, easier to comply with and more inviting to investment in new jobs than the old plan.
 
Finally, in June, the new Michigan Business Tax, (MBT) was signed into law. Unfortunately, many of the original objectives were not achieved. In fact the MBT:

• Brings in at least as much revenue as the SBT did. And because it only has a three year cap on total revenue, will likely be an actual tax INCREASE.


• At over 150 pages, it is more confusing and complex than the old plan.


• Provides tax relief to business that generally are losing jobs, like large manufacturing firms, but increases the tax burden on businesses that are adding jobs, like insurance, financial services, banking, real estate, and service businesses.


• Will force companies with increased tax liability to pass that increase on to their customers, i.e. higher insurance premiums, higher mortgage interest, etc.

The bottom line is that in a time when Michigan has the highest unemployment rate, the greatest population and job losses, the lowest personal income growth, the highest foreclosure rates, a loss in gross domestic product...now is not the time to increase the burden on business investors and job creators.

I end with this question. If the MBT provides, as the governor asserts, relief for 70% of business tax payers, but brings in just as much revenue as the old plan, then what does that mean for the other 30%?

Action by Homeschool parents delays vote on House Floor

Update: Action by Homeschool parents delays vote on House Floor
I want to thank each of you who took the time to send a clear and respectful message to your State Legislator asking them NOT to support the "Education Begins at Home Act" resolution, (HR 81). The resolution was not brought to the floor for a vote, YET.  The House will not be in session again until Wednesday, August 1, 2007.  I would ask you to be diligent in watching for this resolution. You may want to send a kind note to the Floor Leader, Steve Tobocman, asking him to NOT bring this resolution up for a vote. You can contact him here. He is the one who decides which items are brought up for vote.  If you missed my first alert, a copy of it is below.  Thanks again for your attention.
 
House moves "Education Begins at Home Act" resolution
Attention parents: The Michigan House of Representatives is moving a non-binding resolution to encourage the U.S. Congress to enact the "Education Begins at Home Act."  It sounds good, doesn't it?  Don't be fooled.  It is a move to inject more government into the role of parenting.  Read the Resolution here.
 
The Home School Legal Defense Association has issued a clear explanation of this legislation.  Read it here.
 
Not only does this bill further the process of usurping parental authority, it appropriates $500 million of your tax dollars for the program.  Are kids being hurt at home?  Are there bad parents? Yes. But since when is the government capable of being a better parent? If there are parents who are abusing their children, they need to be brought to justice.  Another program where the government is coming to your home to help you raise your children is not the solution.
 
Contact your state representative now to respectfully express your opposition.

Cost overruns aplenty in state government

The governor wants you to believe we are out of money because the cost of government has outstripped our income. The only solution she has to offer is tax increases. But is the CEO managing the state efficiently?  Read on.

Over the past several months, there has been much posturing about how to balance this year's budget shortfall which as of mid-May had ballooned to over $800 million.  The assumption from the governor's office is that we have "cut to the bone" and there is no where else to find savings, therefore we must raise taxes to balance the shortfall.

What the governor seems unwilling or unable to deal with is a basic problem of mismanagement in state government, a problem that only the head of the executive branch can address. Governor Granholm herself was quoted as saying in December 2003 regarding cuts to higher education, "just like any other entity, if you can't cut 5 percent a year, you are not doing your job." (Booth Newspapers, December 17, 2003). But since 2003 state government has grown by $4 billion and hundreds of millions have been lost because of gross mismanagement by the governor's own department heads.  Let me cite a few examples:

• The Department of Information and Technology (DIT) signs a contract with Ameritech for voice and data communications worth $17 million, but after several "change orders" ends up paying $129 million.


• The Department of Management and Budget signs a contract with EDS for computing hardware, software and services worth $58 million which explodes to $555 million after "changes".


• DIT signs a 13-year contract with Oracle for software and support for "all state agencies" for $2 million, but somehow additions are approved to increase the contract to $144 million.


• A forty-month contract with Policy Studies, Inc. for the Michigan Child Support Enforcement System to provide project management services worth $5.6 million is increased to $200 million, (over $1 million per week in overcharges!)


• The Department of Community Health makes over $55 million in questionable or over-payments to its Pharmacy Benefits Manager.

Meanwhile, in 2006 the Department of Human services (Mary Ann Udow, Director) overspends its budget by $30 million, doesn't report it as required by law and goes on spending, even though they know two months before the end of the budget year that they are over-budget and in violation of the constitution.

All of these overpayments and many more like them were reported by the Auditor General of the State.  You can see this audit at: http://audgen.michigan.gov/comprpt/docs/r5051005.pdf  The legislature responded when appropriate with new legislation to tighten controls.  But the only way to truly address these serious issues is for the Department heads to be held responsible by the "CEO" (the governor) for their incompetence.  This has not happened. To my knowledge, no department heads have been dismissed or even disciplined for their gross mismanagement.

The governor continues to ask for tax increases.  She has recommended an additional $1 billion in spending for next year.  She has recommended an additional 700 civil service positions, (while threatening to lay off 29 state troopers).  As a state representative responsible for sound fiscal policy, I cannot in good conscience even consider voting for tax increases when spending continues to spiral upward and hundreds of millions of dollars are mismanaged and misspent by government.  I am hopeful that the executive branch of government will get its house in order.

More Private Property Rights...Up in Smoke

I don't like cigarette smoke, especially when I am enjoying a nice meal at a local restaurant. I agree that second hand smoke is not only annoying, but probably hazardous to your health. However, I am also a staunch supporter of private property rights.

The House is soon to move HB 4163 (http://www.michiganvotes.org/2007-HB-4163) which would ban a legal activity, (smoking) on private property, (restaurants and bars). One of the fundamentals of liberty is private property rights. Individual property owners have a right to engage in any legal activity they wish on their own property. They also have the right to restrict certain legal activities on their own property. For the government to tell private businesses how to run their business; to tell private property owners what legal activities they can and cannot engage in on their own property is the height of arrogance at minimum.

More Private Property Rights...Up in Smoke

I don't like cigarette smoke, especially when I am enjoying a nice meal at a local restaurant. I agree that second hand smoke is not only annoying, but probably hazardous to your health. However, I am also a staunch supporter of private property rights.

The House is soon to move HB 4163 (http://www.michiganvotes.org/2007-HB-4163) which would ban a legal activity, (smoking) on private property, (restaurants and bars). One of the fundamentals of liberty is private property rights. Individual property owners have a right to engage in any legal activity they wish on their own property. They also have the right to restrict certain legal activities on their own property. For the government to tell private businesses how to run their business; to tell private property owners what legal activities they can and cannot engage in on their own property is the height of arrogance at minimum.

House moves "Education Begins at Home Act" resolution

Homeschool ALERT    

Attention parents: The Michigan House of Representatives is moving a non-binding resolution to encourage the U.S. Congress to enact the "Education Begins at Home Act."  It sounds good, doesn't it?  Don't be fooled.  It is a move to inject more government control into the role of parenting.  Read the Resolution here.
 
The Home School Legal Defense Association has issued a clear explanation of this legislation.  Read it here.
 
Not only does this bill further the process of usurping parental authority, it appropriates $500 million of your tax dollars for the program.  Are kids being hurt at home?  Are there bad parents? Yes. But since when is the government capable of being a better parent? If there are parents who are abusing their children, they need to be brought to justice.  Another program where the government is coming into your home to tell you how to raise your children is not the solution.
 
Contact your state representative now to respectfully express your opposition.

Busy, busy, busy

Tuesday, we did not take a single roll call vote on the House floor. Today, we took one vote on a "technical" fix to existing legislation. In August we are scheduled to be in session on Wednesdays only for total of 5 days, but the word is there will likely be very little voting, if any in August.

Keep in mind, we still have to balance next year's budget, and decide how much to raise your taxes to pay for all the increased spending. But there appears to be no urgency because, after all, the new budget year does not start until October 1.

Busy, busy, busy

Tuesday, we did not take a single roll call vote on the House floor. Today, we took one vote on a "technical" fix to existing legislation. In August we are scheduled to be in session on Wednesdays only for total of 5 days, but the word is there will likely be very little voting, if any in August.

Keep in mind, we still have to balance next year's budget, and decide how much to raise your taxes to pay for all the increased spending. But there appears to be no urgency because, after all, the new budget year does not start until October 1.

SBT, MBT, WBT

The Single Business Tax, dubbed by tax experts as the worst business tax in the nation, has been replaced by the Michigan Business Tax, which the tax experts now calls "the worst business tax in the nation". Maybe we should call it the WBT (Worst Business Tax). By the way, if the new business tax is going to bring in the same amount of revenue as the old business tax, and 70% of business tax payers will get tax relief, than what does that mean for the other 30%?

SBT, MBT, WBT

The Single Business Tax, dubbed by tax experts as the worst business tax in the nation, has been replaced by the Michigan Business Tax, which the tax experts now calls "the worst business tax in the nation". Maybe we should call it the WBT (Worst Business Tax). By the way, if the new business tax is going to bring in the same amount of revenue as the old business tax, and 70% of business tax payers will get tax relief, than what does that mean for the other 30%?

Representative Hoogendyk on public education

Public education in Michigan is facing some real challenges.

• Not enough students graduate or go on to earn a degree.


• Many are bored or don't feel challenged in high school.


• Those who do go to college often finish with a mountain of debt.


• There never seems to be enough money available for education.

Is there a better way? Before considering some options, let's look at the current situation.

EDUCATION TRANSFORMATION
    
K-12 public education is funded primarily through the School Aid Fund (SAF).  Public schools receive a "foundation grant" of at least $7,085 for every student enrolled from kindergarten through high school regardless of achievement.

There is no formula for higher education funding. 

Each of the 15 public universities in Michigan receives a "gross appropriation" from the general fund.  Funding levels vary widely with no logical rationale. For example:

• Grand Valley State receives $65 million, which averages out to only $3,340 per full-time student.


• Michigan Tech, in the Upper Peninsula, receives $49 million, $8,297 per student.


• Western Michigan gets $113 million, but only $4,702 per student.


• Michigan State gets $292 million, $6,984 per student.

On average, taxpayers contribute $5,852 for every student who attends a public university, a total of $1.5 billion, even though one in ten students are not from Michigan and their parents have never paid taxes in this state.

What if we completely rethink how we fund education? Two simple policy initiatives would literally change the face of education in Michigan:

1. Award up to $3,500 to any high school junior or senior who is accepted to a community college or public university full-time.


2. Create a "foundation grant" of $5,852 for every Michigan high school graduate who is accepted to a public university.

A number of positive things might occur as a result:

• High school juniors or seniors could get all of their education at a community college paid for or much of their university tuition covered.


• Students could earn their degree and be ready for the workforce two years earlier.


• College would become affordable for many who might not otherwise attend.


• Students would become consumers, using their grant to shop for the best quality at the best price.


• Because non-residents would be ineligible for grant funding, Michigan would save about $150 million in the higher education budget.


• Every high school student who attended college would save the SAF $7,085 which could then be used to further fund public education.


• Students who are not feeling challenged or can't get the courses they want can get a jump start on college or get their associates' degree and work in a skilled trade.

Making these two ideas happen would be fairly simple. The Appropriations Committee could create the higher education foundation grant. Passage of HB 4855 and HB 4856 would create the grant for high school students to attend college. You can read the main bill here. If you like this bill, send a note to House Education Committee Chair, Tim Melton.

MICHIGAN EDUCATION FACTS

• Michigan spends $1.5 billion on higher education, an average of $5,852 per full-time college student.


• WMU receives $4,702 per student.


• Michigan Tech  receives $8,297 per student.


• GVSU receives $3,340 per student.


• According to the state constitution, universities are autonomous.  
  Taxpayers give them money, but cannot tell them how to spend it.


• Average salary for Professors at U of M is $91,900. This year, they receive a 4.1% increase.


• Michigan spends $13.1 billion on K-12 education, an average of $7,865 per student.


• As of the 2005, Michigan teachers were the 4th highest paid in the country at $56,973.


• Average wages of MEA employees that year was $77,750.

Score another one for Big Labor and Union Bosses

The House just voted to pass the "Worker Freedom Act". That is a euphemism for the "Employer Muzzle Act". Read about the bill here: http://www.michiganvotes.org/Legislation.aspx?ID=52458. What the bill ostensibly does is prevent employers from holding mandatory meetings with employees and talking to them about "religious or political issues." But what it is really about is restricting the right of employers to engage in free speech with their own employees, on company time, to express their opinion about organizing efforts by a collective bargaining unit. This was tried in Colorado; the governor, Bill Owens, wisely vetoed it saying, this bill "restricts employers' First Amendment Rights, contradicts federal law [and] threatens Colorado employer-employee relations." I would add that this bill only discourages business owners from investing in Michigan and creating new jobs. Not a wise thing to do when Michigan has the highest unemployment rate in the nation. Well, at least this way, we can still say, "We're #1!"

Score another one for Big Labor and Union Bosses

The House just voted to pass the "Worker Freedom Act". That is a euphemism for the "Employer Muzzle Act". Read about the bill here: http://www.michiganvotes.org/Legislation.aspx?ID=52458. What the bill ostensibly does is prevent employers from holding mandatory meetings with employees and talking to them about "religious or political issues." But what it is really about is restricting the right of employers to engage in free speech with their own employees, on company time, to express their opinion about organizing efforts by a collective bargaining unit. This was tried in Colorado; the governor, Bill Owens, wisely vetoed it saying, this bill "restricts employers' First Amendment Rights, contradicts federal law [and] threatens Colorado employer-employee relations." I would add that this bill only discourages business owners from investing in Michigan and creating new jobs. Not a wise thing to do when Michigan has the highest unemployment rate in the nation. Well, at least this way, we can still say, "We're #1!"

The New Budget: Huge to...Quite Huge

For all the rhetoric about "reform, restructuring and revenue" coming from the governor, it seems the only thing she is really serious about is "revenue" (read TAX INCREASES)
So far, the House has passed two budgets, Corrections and Community Health. Each budget is increased over last year by 9%. At the rate the House Appropriations Committee is going, total spending on general fund dollars will be at $10 billion. The only problem is, anticipated general fund income for next year is $8.5 billion. Once we pass all the budgets, the governor will insist on the revenue (new taxes) to pay for it.

As far as reform and restructuring go, there are too many examples of how we are NOT reforming government to mention, but let me give just a couple from the Corrections budget:

1. The governor wants to reduce the prison population, right? Downsize the department? Well, then why did we pass a budget that increases full-time corrections employees by 493? Think about that for a moment. The average employee costs the taxpayers around $75,000, when you include benefits, retirement, office space, desk, phone, dry-cleaning, (see below). So, let me do the math for a moment...75 thousand times 493...oh, that's $37 million!

2. One of the line items in the new budget is a $3.4 million increase in the dry-cleaning allowance to cover the cost of a recently negotiated union contract for dry-cleaning of supervisors uniforms. Guess how much the contract price went up? It increased from $250 to $575 per year, per employee! And you call that reform? I'll bet my neighborhood cleaners would love that contract for half the price!

By the way, it should be noted that prison population is slated to go up around 3% next year. But by double-bunking, there are no new prisons being built, so why is the budget increasing by 9%?

By the way, I have a free weekly newsletter which I will be happy to e-mail to you. It has more in-depth information about what goes on in Lansing as well as thoughts and ideas on how to improve government. If you are interested, please send me an e-mail with the word subscribe in the subject line. JackHoogendyk@comcast.net

The New Budget: Huge to...Quite Huge

For all the rhetoric about "reform, restructuring and revenue" coming from the governor, it seems the only thing she is really serious about is "revenue" (read TAX INCREASES)
So far, the House has passed two budgets, Corrections and Community Health. Each budget is increased over last year by 9%. At the rate the House Appropriations Committee is going, total spending on general fund dollars will be at $10 billion. The only problem is, anticipated general fund income for next year is $8.5 billion. Once we pass all the budgets, the governor will insist on the revenue (new taxes) to pay for it.

As far as reform and restructuring go, there are too many examples of how we are NOT reforming government to mention, but let me give just a couple from the Corrections budget:

1. The governor wants to reduce the prison population, right? Downsize the department? Well, then why did we pass a budget that increases full-time corrections employees by 493? Think about that for a moment. The average employee costs the taxpayers around $75,000, when you include benefits, retirement, office space, desk, phone, dry-cleaning, (see below). So, let me do the math for a moment...75 thousand times 493...oh, that's $37 million!

2. One of the line items in the new budget is a $3.4 million increase in the dry-cleaning allowance to cover the cost of a recently negotiated union contract for dry-cleaning of supervisors uniforms. Guess how much the contract price went up? It increased from $250 to $575 per year, per employee! And you call that reform? I'll bet my neighborhood cleaners would love that contract for half the price!

By the way, it should be noted that prison population is slated to go up around 3% next year. But by double-bunking, there are no new prisons being built, so why is the budget increasing by 9%?

By the way, I have a free weekly newsletter which I will be happy to e-mail to you. It has more in-depth information about what goes on in Lansing as well as thoughts and ideas on how to improve government. If you are interested, please send me an e-mail with the word subscribe in the subject line. JackHoogendyk@comcast.net

Term Limits: Things You Didn't Know

I am sure you have read or heard about the many articles calling for the elimination of term limits.  You have been told that term limits are the cause of so many of our state's current problems; some have even blamed the current budget shortfall on "inexperienced" term-limited lawmakers.  But is there any evidence that term-limited legislators are less effective or that it takes several years to learn "the ropes?"
 
Well, thanks to long-time political pundit and writer for Inside Michigan Politics, Bill Ballenger, the truth can now be told.  Bill did some top notch investigation into the history of our great state.  He started by recalling the dire predictions of the Lansing State Journal in 1998 when they said the first term-limited class would have "the largest turnover in state history". He then methodically demonstrates that the first fully term-limited legislature (1999-2000) was not even close to the largest class of freshmen.
 
In fact a review of Michigan history shows that until the 1960's legislators limited themselves to around six years on average, without a law to make them do it. From 1837 (statehood) to 1999, one-third of the legislatures had more freshmen than the 90th (1999). And from 1837 until the twentieth century every class had a higher percentage of freshmen than the class of 1999.
 
The point is this: it isn't necessary for a legislator to have several years of experience before he or she can become effective.  In fact, government was intended to be simple enough that anyone with common sense and a basic education could take a turn at serving in government. Just look at the state constitution.  If you can understand it, you can be a lawmaker.
 
In fact, the best legislators, in my opinion, are the ones with the most experience as taxpayers, business owners, teachers, farmers, homemakers, doctors and yes, even lawyers! These are the people who pay taxes, comply with regulations, deal with fees and permits and licensing issues. They know what makes government work.  They are the ones who understand that government is supposed to serve the people, not the other way around.
 
So, when somebody tells you that term limits don't work, that we need experienced professionals, or for that matter, that we can't function with a part-time legislature, just respond by running for office! There will be at least 50 seats up for grabs next year.
 
By the way, there is much more great information in Inside Michigan Politics abut this subject as well as lots of other great "inside the beltway" news you won't find anywhere else. But, if you want to read it, you will have to subscribe. You can do so by contacting Bill Ballenger at impbb@comcast.net.  His website is www.insidemichiganpolitics.com.
Oh, and speaking of "Part-time" legislators...
 
...momentum for the idea of a time-limited, term-limited legislature seems to be picking up. Recent articles in the press suggest the idea has support. Links to recent stories and opinions are after each excerpt.
 
"It would force legislators to focus on the important issues. Just look at the ongoing budget mess to see the downside of a House and Senate with too much time on their hands. Start the clock ticking on a 90-day or 120-day session, and let's just see how much a motivated group of people can get done. We suspect the results would be the same without lawmakers wasting time on political posturing or bills that are little more than feel-good pap. Thirty-nine other states manage to do their lawmaking work with part-timers in charge. So can Michigan." http://www.mlive.com/news/citpat/index.ssf?/base/news-21/1181657132146240.xml&coll=3
 
"Think of a part-time Legislature as a preventive measure. With fewer days in Lansing, lawmakers would have less time on their hands to tinker with laws and propose useless, feel-good legislation that turns out to be unenforceable...They would also have fewer hours to plot methods to further skin taxpayers. The restricted legislative sessions would force them to get down to the people's business rather than dallying with proposals that we didn't send them to Lansing to deal with." http://www.theoaklandpress.com/stories/070507/opi_20070705170.shtml

"With the state's economy still in the tank, trust and faith in Lansing is bad and getting worse...In the face of this comes another interesting poll result: A majority of Michigan's voters favor making the Legislature a part-time body...It would appear the electorate doesn't like paying a lot of money for full-time lawmakers who can't seem to get much accomplished...Clearly, voters don't think they're getting a bang for their buck, which is why a movement to make the Legislature part-time could easily gain momentum."  http://hometownlife.com/apps/pbcs.dll/article?AID=/20070705/OPINION01/707050378/1208/NEWS19
Read my constitutional amendment proposal here: House Joint Resolution H, http://www.michiganvotes.org/2007-HJR-H  Introduced by Rep. Jacob Hoogendyk, Jr. on March 20, 2007, to place before voters in the next general election a Constitutional amendment to replace the current full time legislature with a part time legislature that would meet for not more than 90 consecutive days each year, except if recalled on an extraordinary occasion. Legislators could not be granted any state-paid retirement or health benefits based on their legislative service, and their pay for those 90 days could not exceed 25 percent of the average for Michigan private employees. Legislators could only be reimbursed for actual expenses related to holding the office, and the total legislative budget in any one year could not exceed 1 percent of the state general fund.

The Governor's "Tax Hike Shopping List"

Thanks to Ken Braun at the Mackinac Center for calling attention to this: (www.mackinac.org)

The Treasury Department has put out a publication called an "Appendix on Tax Credits, Deductions, and Exemptions". What it really is, is a listing of things not currently taxed that could be taxed so as to bring more revenue in to the state. In other words, "we want to soak the taxpayers even more, so let's consider these ideas..." Here are some of the things your governor would consider taxing you for and the estimated revenue she would take (from your wallet):
Certain agricultural products - $12.9 million
Brownfield development zones - $29.4 million
Credit for contribution to community foundations - $755 thousand
Exemptions for employers who pay unemployment, social security and workers comp - $155 million
Credit for donating a car to charity - $130 thousand
Deductions for employers paying for health care for employees - $31 million
Credit for donations to homeless shelters, higher ed and historic preservation - $4 million
Credit for expanding your business, hiring new workers - $62 million
Taxing federally exempted non-profits - $109 million
Credit for purchasing anti-pollution equipment - $44 million
Exemption for church construction or cars used by religious organizations - $7.5 million
...I could go on and on, but as you can see, this report, http://www.michigan.gov/documents/ExecBudgAppenFY2007_164822_7.pdf puts EVERYTHING up for consideration as a place to get more tax revenue. Nothing is sacred, not even the sacred.

The Governor's "Tax Hike Shopping List"

Thanks to Ken Braun at the Mackinac Center for calling attention to this: (www.mackinac.org)

The Treasury Department has put out a publication called an "Appendix on Tax Credits, Deductions, and Exemptions". What it really is, is a listing of things not currently taxed that could be taxed so as to bring more revenue in to the state. In other words, "we want to soak the taxpayers even more, so let's consider these ideas..." Here are some of the things your governor would consider taxing you for and the estimated revenue she would take (from your wallet):
Certain agricultural products - $12.9 million
Brownfield development zones - $29.4 million
Credit for contribution to community foundations - $755 thousand
Exemptions for employers who pay unemployment, social security and workers comp - $155 million
Credit for donating a car to charity - $130 thousand
Deductions for employers paying for health care for employees - $31 million
Credit for donations to homeless shelters, higher ed and historic preservation - $4 million
Credit for expanding your business, hiring new workers - $62 million
Taxing federally exempted non-profits - $109 million
Credit for purchasing anti-pollution equipment - $44 million
Exemption for church construction or cars used by religious organizations - $7.5 million
...I could go on and on, but as you can see, this report, http://www.michigan.gov/documents/ExecBudgAppenFY2007_164822_7.pdf puts EVERYTHING up for consideration as a place to get more tax revenue. Nothing is sacred, not even the sacred.

Legislator's pay...how is Michigan doing?

Here is a rundown of inflation adjusted changes in Midwest legislators' salaries from 1975 to 2005, courtesy of the Council for State Governments:
Indiana: down 48%
Kansas: down 45%
South Dakota: down 35%
Nebraska: down 33%
Iowa: down 28%
Illinois: down 22%
Wisconsin: down 22%
Ohio: down 13%
Minnesota: up 0.1%
North Dakota: up 845% (to $125/day when in session)
Michigan: up 13% (to $79,650, 2nd highest in the nation)

Ah, there is some cynicism out there (see comments). Just for the benefit of those out there who did not know, I co-sponsored a resolution this spring to ask the State Officer's Compensation Commission (SOCC) to ask them to cut our pay 5%. I voted for a bill to eliminate health care for legislators after they leave office and, of course, I introduced the amendment to the constitution that would cut our pay by more than 50% (HJR H)

Legislator's pay...how is Michigan doing?

Here is a rundown of inflation adjusted changes in Midwest legislators' salaries from 1975 to 2005, courtesy of the Council for State Governments:
Indiana: down 48%
Kansas: down 45%
South Dakota: down 35%
Nebraska: down 33%
Iowa: down 28%
Illinois: down 22%
Wisconsin: down 22%
Ohio: down 13%
Minnesota: up 0.1%
North Dakota: up 845% (to $125/day when in session)
Michigan: up 13% (to $79,650, 2nd highest in the nation)

Ah, there is some cynicism out there (see comments). Just for the benefit of those out there who did not know, I co-sponsored a resolution this spring to ask the State Officer's Compensation Commission (SOCC) to ask them to cut our pay 5%. I voted for a bill to eliminate health care for legislators after they leave office and, of course, I introduced the amendment to the constitution that would cut our pay by more than 50% (HJR H)

Big Brother run amok

I do not care for cigarette smoke, especially while eating out at a nice restaurant. Consequently, I choose not to eat at restaurants that don't have clearly separated non-smoking sections. Better yet, I prefer to eat at non-smoking restaurants; there are many and more every day. Its called consumer choice. But, oh no, that is not good enough for "Big Brother" Michigan government. We are considering legislation to ban smoking on private property. Now, the last time I checked, smoking was LEGAL. And I think we still have constitutional rights of private property, don't we?

Look, if you don't like restaurants with smokers in them, DON'T GO THERE! Vote with your feet, the restaurant owners will get the message.

2007 House Bill 4163 (Prohibit allowing private workplace smoking )
[History, Amendments & Comments] [Text and Analysis] [Add to Watch List]
Introduced by Rep. Brenda Clack on January 30, 2007, to prohibit a business owner from choosing to allow smoking in his or her establishment.

Big Brother run amok

I do not care for cigarette smoke, especially while eating out at a nice restaurant. Consequently, I choose not to eat at restaurants that don't have clearly separated non-smoking sections. Better yet, I prefer to eat at non-smoking restaurants; there are many and more every day. Its called consumer choice. But, oh no, that is not good enough for "Big Brother" Michigan government. We are considering legislation to ban smoking on private property. Now, the last time I checked, smoking was LEGAL. And I think we still have constitutional rights of private property, don't we?

Look, if you don't like restaurants with smokers in them, DON'T GO THERE! Vote with your feet, the restaurant owners will get the message.

2007 House Bill 4163 (Prohibit allowing private workplace smoking )
[History, Amendments & Comments] [Text and Analysis] [Add to Watch List]
Introduced by Rep. Brenda Clack on January 30, 2007, to prohibit a business owner from choosing to allow smoking in his or her establishment.

Michigan: the Nanny State

Did you really send us to Lansing to do this kind of work? The bill described below is a clear example of government over-reach. I was one of the 7 "NO" votes on the bill. I originally was somewhat supportive of the idea. In fact, I still support the concept of providing additional protection for small children by putting them in "booster" seats. But, as I said in my "no vote explanation" if in fact booster seats provide additional protection for small children, what parent wouldn't use them? Do we really need the government to tell us what common sense measures to employ when raising our children? Is there a law against children playing in traffic? Is there a law against running with scissors? I think not. Why should there be a law that says we need to provide more common sense protection for our children?

2007 House Bill 4536 (Expand auto child seat mandates )
[History, Amendments & Comments] [Text and Analysis] [Add to Watch List]
Introduced by Rep. Kathy Angerer on March 28, 2007, to require child safety booster seats for children between four- and eight-years old who are under 4-feet 9-inches tall and weigh less than 80 pounds.
Passed in the House (101 to 7) on June 27, 2007, to require child safety booster seats for children between four- and eight-years old who are under 4-feet 9-inches tall. [Vote Details and Comments]
Received in the Senate on June 28, 2007.

Michigan: the Nanny State

Did you really send us to Lansing to do this kind of work? The bill described below is a clear example of government over-reach. I was one of the 7 "NO" votes on the bill. I originally was somewhat supportive of the idea. In fact, I still support the concept of providing additional protection for small children by putting them in "booster" seats. But, as I said in my "no vote explanation" if in fact booster seats provide additional protection for small children, what parent wouldn't use them? Do we really need the government to tell us what common sense measures to employ when raising our children? Is there a law against children playing in traffic? Is there a law against running with scissors? I think not. Why should there be a law that says we need to provide more common sense protection for our children?

2007 House Bill 4536 (Expand auto child seat mandates )
[History, Amendments & Comments] [Text and Analysis] [Add to Watch List]
Introduced by Rep. Kathy Angerer on March 28, 2007, to require child safety booster seats for children between four- and eight-years old who are under 4-feet 9-inches tall and weigh less than 80 pounds.
Passed in the House (101 to 7) on June 27, 2007, to require child safety booster seats for children between four- and eight-years old who are under 4-feet 9-inches tall. [Vote Details and Comments]
Received in the Senate on June 28, 2007.

"Part-tme" Legislature concept gains traction

In March I proposed an amendment to the state constitution to mandate that the legislature finish its work each year by May 1st. We would still have 100 or so days to get the work done, (we average 92 days per year every 12 months!) and we would be much more efficient in the process. Pay would be cut to match the time spent on the job.

The Grand Rapids Press and the Oakland Press have both shown support for the idea. Read the stories here: http://www.theoaklandpress.com/stories/070507/opi_20070705170.shtml
http://www.mlive.com/news/grpress/index.ssf?/base/news-37/1183270816106420.xml&coll=6

Here are some excerpts:
They command nearly $80,000 a year, receive $12,000 for expenses and enjoy lifetime health insurance that begins at age 55 after six years of service.
Michigan legislators found time this year to authorize Be Kind to Animals Month, pondered a bill on "Ride Your Motorcycle to Work Day" and considered a state poet laureate. (Grand Rapids Press)

Less government usually means less intrusion, both in the lives of state residents and businesses, which provide employment opportunities. It also should translate into fewer tax dollars going to fund legislators and their health care and pension provisions. Think of a part-time Legislature as a preventive measure. With fewer days in Lansing, lawmakers would have less time on their hands to tinker with laws and propose useless, feel-good legislation that turns out to be unenforceable.
They would also have fewer hours to plot methods to further skin taxpayers. The restricted legislative sessions would force them to get down to the people's business rather than dallying with proposals that we didn't send them to Lansing to deal with. (Oakland Press)

Please feel free to comment or email me at JackHoogendyk@comcast.net.

"Part-tme" Legislature concept gains traction

In March I proposed an amendment to the state constitution to mandate that the legislature finish its work each year by May 1st. We would still have 100 or so days to get the work done, (we average 92 days per year every 12 months!) and we would be much more efficient in the process. Pay would be cut to match the time spent on the job.

The Grand Rapids Press and the Oakland Press have both shown support for the idea. Read the stories here: http://www.theoaklandpress.com/stories/070507/opi_20070705170.shtml
http://www.mlive.com/news/grpress/index.ssf?/base/news-37/1183270816106420.xml&coll=6

Here are some excerpts:
They command nearly $80,000 a year, receive $12,000 for expenses and enjoy lifetime health insurance that begins at age 55 after six years of service.
Michigan legislators found time this year to authorize Be Kind to Animals Month, pondered a bill on "Ride Your Motorcycle to Work Day" and considered a state poet laureate. (Grand Rapids Press)

Less government usually means less intrusion, both in the lives of state residents and businesses, which provide employment opportunities. It also should translate into fewer tax dollars going to fund legislators and their health care and pension provisions. Think of a part-time Legislature as a preventive measure. With fewer days in Lansing, lawmakers would have less time on their hands to tinker with laws and propose useless, feel-good legislation that turns out to be unenforceable.
They would also have fewer hours to plot methods to further skin taxpayers. The restricted legislative sessions would force them to get down to the people's business rather than dallying with proposals that we didn't send them to Lansing to deal with. (Oakland Press)

Please feel free to comment or email me at JackHoogendyk@comcast.net.

Is state government mismanaged? Part 2

About 5 weeks ago, I sent a letter about mismanagement in state government.  For those of you who missed it, an edited version is below.  Here is an update of the "ongoing investigation" by my office into how your money is being spent.  I hope to have further updates as this story unfolds.
Government Mismanagement, Part 2
 
One of the areas of state spending that I highlighted in my first article was regarding a contract between the Department of Information Technology (DIT) and a consulting firm called Policy Studies Inc. (PSI). We had a 40 month contract that ended in early 2004.  The original value of that contract was a little over $5 million, but we ended up spending over $200 million.  Documents I obtained from the Office of the Auditor General (OAG) sheds some light on the problems but not very much.  Of interest is a change order that was signed by a state worker for over $10 million, three weeks before the original expiration of the contract. The was NO EXPLANATION for the $10 million expenditure.  I find that somewhat unsettling.
 
I have been asking questions and will continue to do so.  I had a long conversation with the Executive Chairman of Policy Studies.  A couple of things he told me as justification for the $200 million the state spent:

• PSI "saved" the state over $176 million in fines and penalties from the federal government, so we really only paid a "net" of around $25 million for their services. The federal government paid the rest for us.


•  25% of the money we paid went to PSI, the other 75% flowed through PSI to several vendors who were doing much of the work.


• Virtually all of the $200+ million paid for labor - hourly billings for work performed. (Just as a point of reference, assuming a high figure of $200,000 per year, per employee, the state paid PSI for 300 "highly trained" workers at $200,000 per year for 40 months.

What was not explained was exactly what the $200 million was really getting us, other than a "state of the art" computer software monitoring system.

I also had a very nice meeting with Lisa Webb Sharpe, the Director of the Office of Management and Budget in my office.  She has been director for almost two years. She assured me that the problems I was pointing out were in the past and have been addressed.  She told me that new policies and procedures have been put in place to ensure that these kinds of cost overruns will not happen in the future.
She promised to follow-up with solid data to verify that these new procedures are in place.  I look forward to receiving that information and sharing it with all of you.   It will be good to know that the state government has become efficient in its use of the people's money.

-------------------------------------
Government Mismanagement, Part 1
 
Over the past several months, there has been much posturing about how to balance this year's budget shortfall which as of mid-May had ballooned to over $800 million.  The assumption from the governor's office is that we have "cut to the bone" and there is no where else to find savings, therefore we must raise taxes to balance the shortfall.

What the governor seems unwilling or unable to deal with is a basic problem of mismanagement in state government, a problem that only the head of the executive branch can address. Governor Granholm herself was quoted as saying in December 2003 regarding cuts to higher education, "just like any other entity, if you can't cut 5 percent a year, you are not doing your job." (Booth Newspapers, December 17, 2003). But since 2003 state government has grown by $4 billion and hundreds of millions have been lost because of gross mismanagement by several departments of state.  Let me cite a few examples:

• The Department of Information and Technology (DIT) signs a contract with Ameritech for voice and data communications worth $17 million, but after several "change orders" ends up paying $129 million.


• The Department of Management and Budget signs a contract with EDS for computing hardware, software and services worth $58 million which explodes to $555 million after "changes".


• DIT signs a 13-year contract with Oracle for software and support for "all state agencies" for $2 million, but somehow additions are approved to increase the contract to $144 million.


• A forty-month contract with Policy Studies, Inc. for the Michigan Child Support Enforcement System to provide project management services worth $5.6 million is increased to $200 million, (over $1 million per week in overcharges!)


• The Department of Community Health makes over $55 million in questionable or over-payments to its Pharmacy Benefits Manager.

Meanwhile, in 2006 the Department of Human services (Mary Ann Udow, Director) overspends its budget by $30 million, doesn't report it as required by law and goes on spending, even though they know two months before the end of the budget year that they are over-budget and in violation of the constitution.

All of these overpayments and many more like them were reported by the Auditor General of the State.  You can see this audit at: http://audgen.michigan.gov/comprpt/docs/r5051005.pdf  The legislature responded when appropriate with new legislation to tighten controls.  But the only way to truly address these serious issues is for the Department heads to be held responsible by the "CEO" (the governor) for their incompetence.  This has not happened. To my knowledge, no department heads have been dismissed or even disciplined for their gross mismanagement.

The governor continues to ask for tax increases.  She has recommended an additional $1 billion in spending for next year.  She has recommended an additional 700 civil service positions, (while threatening to lay off 29 state troopers).  As a state representative responsible for sound fiscal policy, I cannot in good conscience even consider voting for tax increases when spending continues to spiral upward and hundreds of millions of dollars are mismanaged and misspent by government.  I am hopeful that the executive branch of government will get its house in order.