The missteps of the Michigan Legislature were many in 2023
Forced unionization, pork, and corporate welfare are the story of first half of the 102nd Legislature
Mistakes were made by Michigan’s Democratic trifecta in its first year holding all the gavels in Lansing.
Many of the policies it enacted don’t do what their supporters say they do. Other legislation doesn’t match what Democrats told voters they would do. There are gaps between word and deed.
Here are some of the biggest blunders made by Michigan lawmakers in the first year of the 102nd Legislature.
$4.1 billion in corporate welfare
Michigan voters may be confused about Democrats’ relationship with big business. Voters will often hear them lament that big businesses don’t pay their fair share of taxes. But voters should also notice that writing big checks to big business has been Michigan Democrats’ highest priority.
Michigan lawmakers approved $4.1 billion in business subsidies this year. That is the most in a year since the Granholm administration. Selective subsidies are ineffective at creating jobs, unfair to the businesses who don’t get them and expensive to taxpayers. Yet the Democratic majority in both houses approved them gladly.
Politicians want headlines about companies opening new facilities and creating new jobs, and they authorize billions in corporate welfare to get those headlines.
But it’s headlines that are being chased, not economic growth. Appearances trump substance too often in politics.
No one should have to pay a union as a condition of employment. But Michigan Democrats voted to ensure that unions get to collect money from the people covered by collective bargaining agreements, regardless of their members’ volition.
In their explanations for the move, Democrats insisted that it supported workers’ rights. How getting people fired for failing to pay political actors somehow supports workers’ rights went unsaid.
The move violates basic American principles of voluntary association. It also hinders the state’s economic prospects. States that force people to contribute to unions have lower employment and income growth. Michigan is already falling behind other states, and more forced unionization won’t help.
Michigan lawmakers eliminated the tax exemption for pensions in favor of a limited tax exemption for all types of incomes for seniors. Michigan Democrats reinstalled a pension exemption, claiming that it will help seniors make ends meet.
“We have heard again and again from our seniors that their costs are too high and their incomes are too low,” said Sen. Kevin Hertel, D-St. Clair Shores.
Except that low-income seniors already had an exemption. And the pension exemption only applies to seniors earning one type of income: receipts from conventional pension systems.
All seniors already get a $20,000 exemption for all types of income — $40,000 for married couples — and their Social Security payments are exempt from state income taxes.
Democrats have now exempted pension income from the state income tax again. This only benefits households earning more than the previous exemptions and only those with pensions rather than 401(k) benefits or other retirement income.
It is tougher to defend preferences for pensions over other types of retirement income. Some Democrats insisted that it was about restoring a promise to seniors that they would have their incomes exempt from taxes after they already made decisions to retire. But the exemptions were phased in based on retirement age, meaning that older seniors saw no change. The new exemptions, on the other hand, would apply to all people, not just the people who were liable for state income taxes after they had already retired.
It didn’t seem like there were many people even interested in defending the policy that Democrats enacted.
Taxpayer-funded school lunch
Gov. Gretchen Whitmer said she ensured that no school child would go hungry with her budget, which covers the breakfast and lunch costs for public school students.
Except no one went hungry in Michigan schools before, either. Kids in households who need taxpayer-funded lunch get it. Limits for taxpayer support apply well into middle-class thresholds.
What lawmakers did was remove the income eligibility requirement, so taxpayers would pick up the costs for lunch of kids from households that can afford school lunches.
There is a lot in the budget that Michiganders should be concerned about, including its pork. Lawmakers also threw out teacher standards. And the roads are further from the point where they are fixed faster than they fall apart.
The bigger mistake, however, is that lawmakers’ policies don’t match their talking points. What Democrats said before taking power is different from what they have done with it.
James Hohman is director of fiscal policy at the Mackinac Center. Email him at firstname.lastname@example.org.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.