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CRC Column

The right to criticize government is also an obligation to know what you are talking about. 
-Lent Upson, 1st Executive Director of CRC  

For over 90 years, the objective of the Citizens Research Council of Michigan has been to provide factual, unbiased independent information on significant issues concerning state and local government organization and finance. CRC believes that the use of this information by policymakers will lead to sound, rational public policy in Michigan.


CRC's Blog

Check out the latest posts on the Citizens Research Council of Michigan blog, CRC Column:



New CRC Report Calls for State Policy before Assuming School Debts

April 22, 2015, A recent report addressing the future of public education in the City of Detroit recommends that the State of Michigan assume responsibility for certain debts of Detroit Public Schools as part of a larger plan to reform governance and finance for all public schools in the city. A new Citizens Research Council of Michigan (CRC) report, "State Assumption of School Debts," examines the issues created by a state assumption of school debts by examining the consequences associated with previous instances where the state assumed responsibility for school debts. The CRC report urges policymakers to develop a statewide policy for dealing with school district debts, especially if the state is going to make additional resources available for such purposes.

The Coalition for the Future of Detroit Schoolchildren has recommended that the state assume $124 million annually of Detroit Public Schools’ (DPS) financial obligations. The obligations include debt service payments for long-term notes issued to finance current operations as well as required payments to the school employee retirement system for employee "legacy costs." If the state takes on these debts, DPS would see an almost $2,500 per-pupil increase in the amount of money available for classroom instruction; however, this will come at the expense of $124 million fewer state dollars available to share across all other public schools in the state. When the state assumes a district’s debts, the benefits are retained locally but the costs are socialized.

"While DPS is currently the most recent financially and academically struggling district requesting direct state assistance with its debts, 55 other school districts across the state began the current fiscal year in a deficit situation," said Craig Thiel. "A request from any one of these districts, some of which are under the control of state-appointed emergency managers, may not be too far off."

State assumption of school debts is not unprecedented; the state has assumed the debts of four financially struggling school districts since 2012 – Muskegon Heights (2012), Highland Park (2012), Inkster (2013), and Buena Vista (2013); however, it did so without a specific policy in place. Instead, emergency managers in Muskegon Heights and Highland Park were able to gain access to additional state assistance to pay off school debts by “charterizing” the entire districts. The Michigan Legislature passed a state law to allow the dissolution of the Inkster and Buena Vista school districts and for the debts to be assumed by the state. Policymakers are still dealing with the consequences, both intended and otherwise, arising from the actions taken in these instances and from the lack of a statewide policy.

"Before dealing with the immediate situation involving DPS debts and in anticipation of future requests for state assistance, policymakers should give consideration to the lack of a long-term policy for state assumption of school debts," said Craig Thiel. "In developing a policy, the state must be cognizant of criteria such as transparency, fairness, accountability, and consistency."

The full report is available at no cost here.




CRC Releases Analysis of Proposal 15-1: Sales and Motor Fuel Tax Increases Related to Transportation Funding

March 19, 2015 - The Citizens Research Council of Michigan has released its analysis of Proposal 15-1, which will appear on the statewide ballot at a special election on May 5, 2015. The proposal has the dual objective of increasing state funding for transportation repair and maintenance and modifying the taxation of motor fuels to guarantee that all taxes paid at the pump are directed to transportation purposes. If approved by voters, the proposal would change Michigan's tax structure to generate additional revenue for transportation infrastructure improvements as well as address the funding displacement to public schools and local governments caused by removing motor fuels from the base of the sales tax. The CRC analysis provides voters with an accessible and objective explanation of the issues surrounding the proposal and its ramifications for Michigan residents.

A complex package of laws were enacted to restructure various state taxes with the primary objective of raising taxes to finance increased transportation funding. Those laws will not take effect unless voters approve a ballot proposal which increases the maximum authorized sales tax rate from 6 percent to 7 percent. The proposed sales tax increase is related to the goal of guaranteeing that all taxes paid at the pump are directed to transportation purposes. They will be used to address the funding displacement to schools and local governments that is created because sales tax revenues are constitutionally dedicated to funding these programs.


View CRC's Webinar to Discuss Proposal 15-1:
Sales and Motor Fuel Tax Increases Related to Transportation Funding

The state motor fuel and motor vehicle registration tax increases that will provide funding for transportation are contained in state laws that are "tie-barred" to the May vote on adoption of the constitutional amendment.

"Because of the 'tie-barred' legislation, the vote on Proposal 15-1, effectively serves as a public referendum on the entire transportation package, both the constitutional amendment as well as the laws passed by the legislature," said CRC Senior Research Associate Craig Thiel. "The idea of enacting laws by "tie-barring" their enactment to adoption of a constitutional amendment is very uncommon and last occurred with Proposal A of 1994. Because of this, voters are being asked to understand and weigh in on a very complex plan that normally would be the sole province of the state legislature."

The law changes tie-barred to Proposal 15-1 will raise over $1.3 billion in additional annual tax revenue for transportation improvements and over $700 million in new sales tax revenue that will benefit schools, local governments, and other areas of the state budget.

"Recent reports have suggested the state needs anywhere from $1.2 billion to $2.0 billion per year to get the roads back into good condition," said CRC's Director of State Affairs Bob Schneider. "So, this $1.3 billion is a significant step. Further, the new motor fuel tax rates are tied to inflation. Those inflationary increases could help revenues keep pace with the cost of maintaining the highway system -- which fixes a fundamental revenue problem with our current fixed per-gallon motor fuel taxes."

The effect of those tax increases on individual taxpayers will depend on a couple of independent variables. At current pump prices ($2.40 per gallon), CRC estimates that motorists will pay just over 10 cents more per gallon in total taxes under the proposed motor fuel taxing scheme. Higher pump prices will lessen the effect on fuel purchasers. Additionally, with the one percentage point increase in the sales tax rate (from 6% to 7%), consumers will have to pay higher sales taxes on the purchases of taxable goods and services. The effect of that tax increase will depend on the purchasing habits of individual taxpayers.

CRC's report is available at no cost Here.



CRC Report Looks at the Use of Immediate Effect for State Laws and Suggests Reforms

March 12, 2015 - The 2015-16 legislative session is underway and the Michigan legislature is again up to the standard practice of granting immediate effect to almost every law enacted. A new Citizens Research Council of Michigan (CRC) report examines this practice in context of the provision of the 1963 Constitution for the effective date of state laws. CRC's analysis identifies the need for reform – either of the Constitution to reflect legislative practice or of legislative practice to reflect the Constitution.

"The original intent behind the immediate effect provision in our Constitution was for immediate effect to be the exception, as opposed to the standard practice," said Craig Thiel. "However, legislative practice over the years has made immediate effect more of the rule than the exception." The CRC report found that from 2000 through 2014, the legislature granted immediate effect to 94 percent of the laws it passed. Going back to the adoption of the Constitution, nearly 90 percent of all laws received immediate effect.

The CRC report suggests that they should consider either proposing a constitutional amendment so that the effective date provisions reflect longstanding legislative practice or honor the spirit of the Constitution by treating immediate effect as an exception rather than the rule in the law making process.

The report highlights some of the reasons why the legislature has relied so heavily on immediate effect for the effective date of laws, including the shift to the full-time legislature following the adoption of the 1963 Constitution, advances in communication technology, and practical and political considerations. The report also points out some of the concerns raised with the current legislative practice, specifically the complicating effects on the referendum process whereby citizens are able to have a direct say in a law.

"While the reasons for the legislature's expanded use of immediate effect may be meritorious and make sense," said Craig Thiel, "CRC believes that Michigan citizens served by the state constitution should be able to read the document and understand the process of government lawmaking. The wording, along with the framers intent, is for immediate effect to serve as the exception. If the wording is obsolete, as legislative practice would suggest, change the wording."

CRC's report is available at no cost on the Citizens Research Council's website,





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Recent Publications

State Assumption of School Debts

Statewide Ballot Issue: Proposal 15-1
Sales and Motor Fuel Tax Increases Related to Transportation Funding

Use of Immediate Effect in Michigan

Reforming Statutory State Revenue Sharing

Managing School District Finances in an Era of Declining Enrollment

Policy Options to Support Children From Birth to Age Three

Making Sense of K-12 Funding

Statewide Ballot Issues: Proposals 2014-1 & 2014-2   Wolf Hunting

Addressing Michigan's Obesity Problem









Last Updated April 22, 2015