State Representative Justin Amash Accused of Not Compromising on Film Tax Credit
State Representative, and RLCMI advisor, Justin Amash has recently been accused by critics of “not compromising” on the Michigan Film Tax Credits. During a rally at the State Capitol earlier this week, Deb Havens, chair of the West Michigan Film Video Alliance, accused Amash of being just another politician who plays “off on their own agendas, rather than what is best for the state and the people of Michigan.” Ms. Havens seems convinced that Amash’s ideology has nothing to do with sincerely held beliefs, and she also seems convinced that she, and not Representative Amash, knows what is best for the people of Michigan. The irony is that Havens explains Amash’s argument quite clearly stating he is “committed to no incentives…the idea being that if we get rid of all incentive programs then we can get rid of the Michigan business tax, and we won’t have to tax our businesses to pay incentives, therefore, get rid of all incentives.”
People like movies. They make us laugh, cry, and scream. But is the film industry any more important than other sectors of economy such as manufacturing, which is comprised of companies who have been here much longer, and who are the ones paying to attract to newer, out-of-state industries. No one is holding a rally at the capitol on behalf of the garbage industry, even though importing waste from other states and Canada has been a growing business in Michigan in recent years. It must not be as sexy as the movie industry whose growth clearly furthers Ms. Havens personal agenda as Chair of the Michigan Film Video Alliance (read “special interest” group).
And this issue also touches upon another big problem in Michigan politics, that being economic populism. For example, Michigan State Senator Nancy Cassis has been one of the most conservative voices in legislature over the last decade. And while she has rightfully questioned whether the film incentives are actually working, her proposed solution “that 90 percent of the people working on a movie or national ad production must be from Michigan” is also faulty. A parochial restriction that dicates to business that they must hire locally is likely to discourage them from locating in Michigan in the first place. However, this is the price that the private sector should not at all be surprised of paying when they receive government handouts (see the earlier post “Be Careful What You For” concerning the American auto bailouts).
Nor is Cassis’ argument that we should simply “right-size” the film credits by reducing the refundable amount of production costs from 40 percent to 42 percent, down to 35 percent all that convincing since, according the Anderson Economic Group, “the nominal tax expenditure is, at best, a rough guess, and probably an overestimate of the actual ‘cost’ of the program.”
“Best-managed states in the nation”
That’s what Gov. Granholm’s press secretary calls Michigan. Maybe if by “one of the best-managed” she means something more like, at least we aren’t California, then I guess she’s justified.
Notwithstanding that politicians aren’t entirely responsible for any given state’s unemployment problems, check out where we fall on the latest state-by-state ranking from the Bureau of Labor Statistics.
The nerve.
Howes: State Dems, political class, and other problems plaguing Michigan
Howes
Daniel Howes’ latest is so full of accurate assessments that excerpts seem almost insufficient; so many points are worth spreading far and wide. A few salient ones, however, include criticisms of the Democratic Party chairman:
The latest comes from Mark Brewer, the state Democratic Party chief who never met a cheap publicity stunt he didn’t like….proving that the long downward spiral of misery (led by the implosion of the Detroit auto industry) has done little to improve the real-world economic literacy of what Brewer & Co. figure to be a plurality of the voting public.
and quotes from the Detroit Regional Chamber of Commerce president on Andy Dillon’s plan to pool public employees in one health care plan:
“Give the guy credit for having the guts to do something because he knew he’d get nailed by the MEA… These are the type of creative ideas we ought to get behind. Because of union reaction to it, it’s probably not going anywhere.”*
Howes also makes clear who he thinks the enemy of Dillon’s proposal is — i.e., the people who scream bloody murder to stop any sort of cost-saving measures — by pointing out that “bureaucrats, union leaders and members of his own House Democratic caucus [are calling] for his head.”
Those who never see the desirability of giving taxpayers a break are what Jack McHugh has called the political class. He doesn’t have flattering things to say about this group:
true representative government has been supplanted by an inbred, self-serving, self-perpetuating political class that does not represent the people….
The elected officials who grant [lavish public employee benefits] and their beneficiaries are all members of the same political/government class, which protects its own above all else.
this class serves as handmaiden to what has become the nation’s most powerful interest group: the government class, comprised of the permanent welfare/regulatory state bureaucracy and the legions of direct beneficiaries who sup at the same tax-laden table.
It’s a little terrifying that McHugh’s points are gaining more and more evidence to support them. But hopefully ideas like Dillon’s latest, the one that caused “a senior Michigan Education Association official this week to declare: ‘We are at war,’” prove more popular with the voters than they have with the legislature. (We say ideas like this one because, e.g., Leon Drolet’s “Rescue Michigan” offers a similar reform with incredibly more benefits to taxpayers than Dillon’s proposal. And because Dillon’s plan could still prove to be awful, once its details are released. But half-steps toward relief from the burdens of the political class certainly beat out not taking any steps.)
***
*Just because a good idea is “probably not going anywhere” doesn’t give us a good excuse not to fight for it. To a point.
A proposal to rescue Michigan
By Leon Drolet
Michigan’s government class – school, state and local government employees – is proving far more immune to our state’s economic decline than private sector citizens. In fact, recent statistics demonstrate that most government employees are prospering compared to Michigan’s long-suffering private sector workers.
According the U.S. Bureau of Labor Statistics, the average government worker now makes $25.97 in wages and also receives lavish health care, retirement and time-off benefits worth an additional $13.53 per hour.
Private-sector workers in the Midwest earn an average wage of $18.83 with benefits worth $8.09 per hour. The discrepancies remain even when private sector workers are compared to government employees performing similar jobs (government managers vs. private sector managers, private service worker vs. government service worker, etc.).
But there’s even more good news for government employees.
In addition to higher pay and much more generous benefits, job security for the government class is ever so much greater than for the average citizen. Civil service rules and union contracts make layoffs rare for government employees. In fact, while Michigan lost 147,000 goods-producing jobs and 153,000 service industry jobs last year, our state’s government sector actually grew by 3,000 new workers.
Michigan’s increasingly impoverished taxpayers aren’t the only losers as government class benefits and wages grow. Services that government provides to citizens are slipping. Money spent on the platinum-clad health and retirement benefits of bureaucrats is not available for Medicaid provider reimbursements or food for senior meals-on-wheels programs.
Sadly for its members, the government class gravy train can’t go on forever. As property values and the economy continue to fall, our state and local governments face significant declines in tax revenues.
Because the generous pay and benefits of government employees are contractually locked in, elected officials eventually must choose between raising taxes on citizens or finally laying off government workers.
Raising taxes contributes to what could be called the “Detroitification” of Michigan - a vicious cycle of hollowing out the private sector to prop up an unsustainable government establishment. The alternative is to finally lay off some public sector employees, which means fewer teachers, firefighters, police and other service providers.
But what if Michigan governments could balance their budgets and significantly cut taxes without laying off any government workers or reducing any services? Impossible? In fact, there may be a way.
If the state constitution were amended to cap the cost of government employee benefits at the same level as the average benefits earned by full-time private sector citizens, taxpayers would save billions of dollars.
Michigan has 411,000 school, state and local government employees, according to the U.S. Census Bureau. These employees (which include elected officials) are among the highest-paid in the nation, and also average $4.05 more per hour in benefit costs than comparable full-time private sector employees.
Capping their benefit costs at the private sector level would save over $8,000 for each government employee and full-time politician, for a total annual savings of over $3.4 billion. This huge savings could be achieved without diminishing government services or laying off a single government employee.
Enacting a state constitutional amendment to cap government employee and elected official benefit costs could turn Michigan around by making significant tax cuts possible without painful service reductions. Government workers would still enjoy higher pay and job security, but they would have benefits comparable to those in the private sector.
It’s long-past time to cap a lucrative government class benefit system that is as unsupportable as it is unfair to Michigan taxpayers. There’s only one question remaining about this proposal: What are we waiting for?
Leon Drolet is the director of the Michigan Taxpayers Alliance. Contact him at leon@mitaxpayer.org. Reprinted from The Detroit Free Press edition on June 19, 2009.
Accolades for Rep. Amash
Rep. Justin Amash, endorsed by the RLC-MI before his highly competitive primary last summer, recently received some attention for his principled voting pattern. From Gongwer News, a couple of weeks ago (subscription required–which is why we didn’t notice this until now):
Rep. Justin Amash (R-Kentwood) isn’t into labels, but five months into his freshman term, he’s getting a reputation.
That’s what can happen when a lawmaker is often the only ‘no’ vote on a bill. Over and over again.
Rep. Justin Amash
We’re happy to report that Rep. Amash’s notoriety is being compared to one of the RLC-MI’s favorite former representatives:
Some observers might say that sounds familiar, a la former Rep. Leon Drolet, who was not afraid to stand out in his caucus and with his voting record.
But Mr. Amash is charting a new course in much different territory as Republicans nationally and in Michigan search to regain their political strength….
Time will tell whether that statement overstates the case, but we’re happy to see Rep. Amash is having an impact so far.
(Check out our legislator rankings in the coming weeks to see how former Rep. Drolet, as well as the other 2005-2006 legislators, voted relative to each other–and relative to a pro-liberty voting record.)
More Proof That Blue Cross of Michigan Should be For-Profit
Blue Cross Blue Shield is a non-profit health care insurance company organized under the laws of the state of Michigan. Quite frankly, it’s hemorrhaging money. This has a lot to do with the fact that its policy is not to turn anyone away, regardless of their health and the risk in insuring them. So unsurprisingly, they’ve had trouble competing with other insurance companies who are more discriminatory in who they cover. Lately, they’ve attempted to raise fees in various areas to stop the bleeding. But Michigan Attorney General Mike Cox, who is vested with jurisdiction over every non-profit organized under the laws of Michigan, will have none of it. Cox suspects Blue is trying to make a profit in violation of its bylaws, and he has used the opportunity to grandstand for publicity arguing he’s protecting “vulnerable seniors” in the name of “consumer protection.” Note the fact that Cox boasts of having the support of both the UAW and AARP in fighting proposed rate increases by Blue.
Smoking ban (in some workplaces) passes
Yesterday, the state house voted to ban certain business owners from choosing to permit smoking in their establishments.
The vote: 73-31.
Republicans: Mildly against, 24-17.
Democrats: Overwhelmingly for, 56-7.
There’s lots to say about this deprivation of liberty, but for now, we’ll leave it at two points. First, let nobody get away with saying that the Democrats are the party more favorable to personal liberties, or at least to keeping vices legally permissible. (See the vote breakdown, above.) Second, it’s a tragedy that Republicans weren’t more solidly against this. They can’t make a credible claim to be a party of liberty if they don’t oppose bills like this, which so obviously restrict the realm of personal choice.
RLCMI MEETING SATURDAY MAY 16TH
REPUBLICAN LIBERTY CAUCUS OF MICHIGAN MEETING
Saturday May 16th @ 1:00 PM
Perkins Restaurant, 5121 28th Street SE, Grand Rapids, MI 49512
Contact Dan Sheill for more information: (734) 223-2197 or dsheill@hotmail.com
Libertarians and the future of the Republican Party
Political Consultant Mike Murphy, a native Michigander and veteran of the Engler 1990 and McCain 2000 campaigns, was on this week’s edition of “Off the Record.” When asked by Skubick whether he agreed that the Republican Party needs to open itself up to gays and pro-choice women, Murphy agreed, noting the Republican Party is essentially a “free market party,” and that “the truth is [today’s youth] are culturally less conservative on social issues than they used to be…some corners of the party don’t understand that the country is changing demographically.”
When asked about the moderate/conservative distinction and former Governor Bill Milliken, Murphy further explained, “we’ve tended to define [conservatism] a little bit backwards…No, the old liberal-republican model is not the answer…I’m personally very sympathetic to the pro-life side, but if it’s the litmus-test of the party nationally, we lose votes we need.”
Kathy Barks Hoffman asked whether Murphy was suggesting that Republicans move away from social issues. Murphy responded, “I think totally going to a moderate position on all social issues is not necessarily the reframing of the party. Most elections are about economic issues, rather than social issues…In most places it’s true that younger voters are culturally a lot more libertarian than they used to be which is hurting us because we’re seen as being disconnected from that.”
Kegger Tax
Introduced 2009 House Bill 4565 (Revise keg beer sale procedures ) to require retailers to attach an identification tag signed by the buyer to kegs of beer when they are sold, and not return the keg deposit unless the tag is still on the keg.
