Shirkey Bill Would Stop Education Investment Study

Sen. Mike Shirkey (R-Clarklake) introduced SB 319 last week, which would stop funding of the education investment study AFT Michigan has championed for years.

Passed at the end of the last legislative session, the study requires the state determine “the sufficient resources per pupil to provide a public education that enables a pupil to demonstrate successful completion.”

Currently, the state allocates education funding based on how much revenue is raised; there is no formal research that indicates how much it actually costs to educate a student. The study must also consider whether state resources give all students an equal opportunity to succeed and how closely financial costs are associated with achievement.

Shirkey’s bill was referred to the Senate Appropriations Committee.


House Republicans Offer “Plan” for Transportation

The House Republican Transportation “plan” would push $1.05 billion from the General Fund to road funding after 2019, ramping up from $350 million in 2016, $525 in 2017, and $700 million in 2018 and 2019.

  •  Eliminate the Earned Income tax Credit – $117 million
    • According to Treasury Department data from 2013, 780,500 people received an EITC with the average credit being $140.
    • This is a direct assault on the working poor, asking those with the least to pay a significant portion of transportation costs.
  • Increase fees for Hybrid/Electric cars and increase diesel fuel taxes – $45 million
  • Transfer Tobacco Settlement dollars from the 21st Century Jobs fund – $75 million
    • The 21st Century Jobs Fund is used to spur economic growth and create jobs. By redirecting these funds, Republicans are clearly shifting focus from job creation.
  • Tribal Gaming Compact – $60 million
    • Currently, this funding goes into economic development. Shifting these funds also leaves future economic development in jeopardy.
  • Eliminating Film subsidies – $50 million
    • Film subsidies also generate economic activity in the state, and eliminating the program further erodes state economic development.
  • Dedicates any future revenue growth to roads
    • Firstly, this assumes state revenue will grow, and grow significantly. The state is currently liable for $9.3 billion in outstanding business tax credits. Given that the reason the last revenue estimating conference showed a budget deficit of $500 million was due to business tax credits, it is disingenuous to assume that state revenue will continue to grow. It’s highly likely that we will continue experiencing budget deficits .
    • Secondly, if we do actually see revenue increases, dedicating all future revenue growth to roads means all other state spending from the General Fund will necessarily freeze at the current rates for at least the next four years. All state departments, including education, community health, and human services, will not see increases in their budgets for at least four years – not even increases to keep up with inflation.

Prevailing Wage Repeal Passes Senate

On May 14, the Michigan Senate passed Senate Bills 1, 2 and 3 that repeal the Michigan Prevailing Wage Act. The act, which was enacted in 1965, requires contractors bidding on state-funded construction projects to pay a wage to their workers a wage that reflects the prevailing wage of the region. The law, which exists at the federal level and in over 30 states, is designed to provide a level playing field for construction firms who pay higher wages. It also is a disincentive for contractors to lower their bid price by importing low-wage labor from other states.

Backers of the repeal effort claimed that Michigan would save hundreds of millions of dollars by lowering construction wages. However, comprehensive research from states that also repealed their prevailing wage laws showed that doing so did nothing to decrease public construction costs. Conversely, states that axed prevailing wage did show decreased amounts of skilled trades training, increased rates of workplace injury, and lower across-the-board wages for construction employees.

While the only yes votes came from Republican Senators, there were several prominent Republicans who support keeping Michigan’s Prevailing Wage Act. Five GOP Senators (Casperson, Kowall, Nofs, Kowall and Zorn) voted against repeal, and Governor Snyder has also indicated that he would veto the bill if it got to his desk. The bill now goes to the House for further consideration.

AFT Michigan members made dozens of phone calls and sent more than 250 emails asking legislators to protect Michigan’s prevailing wage law.

Revenue Estimating Conference Delivers Good Economic News

On May 15, economists from the Department of Treasury and the House and Senate Fiscal Agencies released their updated consensus revenue estimates for the current fiscal year. The result was an additional $217 million in predicted revenues for 2015. While policy makers from both sides of the aisle expressed happiness with the news, it sets the stage for a battle over how the money will be appropriated.

House Republicans had already expressed their desire to use any new revenues for road repair in light of the failure of Proposal 1. Democrats, however, decried that plan as a short-term fix when a long-term transportation solution is needed. Moreover, they feared that by dedicating any new revenues for roads will leave other critical needs behind.

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