Politics & Government
7:00 am
Tue October 30, 2012

Proposal 5 pros and cons

There are five proposed amendments to the Michigan Constitution on the ballot. One that could be a game changer for the State of Michigan is Proposal Five, the so-called "two-thirds" proposal. 

Proposal 5 seems pretty straightforward. Right now it takes a simple majority of the legislature to pass a tax increase. If passed, Proposal 5 would require a supermajority of two-thirds of the legislature or a vote of the people to pass a tax increase.

Those for Proposal 5

The group behind the proposal is the Michigan Alliance for Prosperity. It’s affiliated with the Tea Party movement. Lana Theis is the Treasurer of Brighton Township and the President of the group. She says Michigan should be cutting government largesse first.

“There are still inefficiencies in government that we would like to see corrected. If two-thirds is in place, they’re going to look to something other than a tax increase before they raise taxes.”

And Theis says the two-thirds majority proposal would make raising taxes much harder.

“And if they see it as necessary, then we believe there should be a lot of agreement and if there’s not agreement with that, they can’t reach it, but they still think it’s important, that’s great. Take it to the people and let the people who are going to write those checks make the decision.”

This is not a new idea in Michigan.

Mike Bouchard is Sheriff of Oakland County and the Honorary Chair of the Michigan Alliance for Prosperity. He was pushing the idea when he was a state senator in the 1990s.

We talked at a coffee shop and he said in these difficult economic times the government needs to start looking for more cuts instead of raising taxes.

“To simply look for more money, as the easy route, out of taxpayers’ pockets rather than do the systemic things that a lot of people have done in their own homes, their own businesses and some governments have is wrong-minded. At some point, you’re going to have to do those tough changes.”

Those against Proposal 5

The group opposing Proposal 5 is Defend Michigan Democracy. It’s a broad-based coalition of Republicans and Democrats, business, labor, agriculture, education and non-profits. Roger Martin is the spokesman for the group. He says he knows making it more difficult to increase state taxes is a popular idea.

“This is Trojan horse public policy. It looks really good on the surface, but if you just take for a moment and think about its consequences, this is just not good public policy for a state that’s on the economic rebound, that’s trying to figure out a way to reinvest in its infrastructure, trying to put people back to work. This is a recipe for disaster.”

Here’s why Martin says that:

Most economists and tax policy experts say taxes should be a low as possible and the burden spread as widely as possible. It’s complex. Any tax restructuring to make that possible usually involves raising taxes here, cutting taxes there, and closing loopholes somewhere else. As the economy changes, the tax code has to keep up.

Mitch Bean is with Great Lakes Economic Consulting. For 20 years he was involved in Michigan’s budget process, most recently as the Director of the non-partisan Michigan House Fiscal Agency.

“The two-thirds proposal would not allow policymakers to expand the tax base without a supermajority, which would hold the state hostage to special interest groups like the one behind this proposal.”

Bean says this would mean gridlock in Lansing.

“In addition to that, it’s just plain undemocratic because the power of the legislature would usurped by a radical minority.”

Bean says the House could pass a change in tax policy unanimously and by a wide majority in the Senate but still fail if just 13 senators voted against it and he says special interests can always buy off 13 senators.

Proposal 5’s backers look at it differently.

Back in the coffee shop, Mike Bouchard with Michigan Alliance for Prosperity said,“They keep pointing to small numbers can control the process. It’s a small number change. You go from 20 to 26 in the Senate. It’s six more people. It’s actually five if you’ve got the governor giving the tie-breaking vote. Five people. If you can’t get five people to vote for your project, I question the value of it.”

Business split on Proposal 5

While most of the business groups are against Proposal 5’s two-thirds supermajority, not all of them are. Charles Owens is the State Director of the National Federation of Independent Business.

“We view the two-thirds proposal as a way to lockdown what we view as some pretty substantive tax reforms.”

Owens says his group likes the recent changes in Michigan tax policy because many small and medium sized businesses have benefited.

“We’re concerned that things will change, we have elections and over a period of time we’ll have a new governor, we’ll have a new administration, we’ll have a new makeup in the legislature and we’re just concerned the temptation to raise taxes if we end up in a budget crunch in the future, will be too great and we think that we will see some of the progress that we’ve made on tax policy here will be eroded.”

But another business group takes a different position on Proposal 5.

“While it might sound interesting and intriguing on the surface, it just poses too many potential unintended consequences,” said Tricia Kinley is with Michigan’s largest business group, the Michigan Chamber of Commerce.

She says those unintended consequences could block further tax changes that could be good for the economy of the state. And if the state can’t make tax policy changes, it could mean local governments would be starving for money and have to raise taxes.

“We would not have made any real improvement if all we do is pass Proposal 5 only to have local governments turn around be forced to go to the ballot asking for more special assessments and property tax increases. We don’t think that is a step forward.”

Follow the money

With so many groups opposing Proposal 5, who pushed to get this on the ballot? That’s a question we asked the President of the Michigan Alliance for Prosperity, Lana Theis.

“It’s funded by a lot of donations. We have one major donor which everybody’s heard about, the Moroun family, one of their organizations is behind and the – we had over, almost 630 thousand people sign our petition.”

Those petition signatures were gathered by people paid by the Moroun family’s organization. That’s the family that owns the Ambassador Bridge.

Roger Martin with Defend Michigan Democracy says that’s telling.

“You know, who’s behind this? Who’s behind Proposal 5? It’s a single Detroit billionaire named Matty Maroun. It’s the same guy who’s put up a little more than $2.3 million to put this question on the ballot. Now, why would a single Detroit billionaire want this on the ballot?”

Martin says the answer is not clear, but Proposal 5’s plan to limit taxes by requiring a two-thirds majority vote in the legislature or a vote of the people is a simple solution causing complex problems.

“For 175 years, Michigan has functioned pretty well as a majority democracy. This turns majority democracy in Michigan totally on its head. This gives 13 state senators super powers to veto the will of the other 135 members of our legislature. So, you know, Michigan citizens have less of a voice in their government and it gives unbridled, unprecedented power to a small minority of Michigan legislators and I don’t think that’s what Michigan voters want.”

But, voters do want lower taxes and Proposal 5 makes it seem so easy.

TAG:  For more information on the ballot proposals  go to our website -
Michigan Radio dot org - and find "Michigan Radio's Guide to the Ballot
Proposals." Look for the link at the top left of the page.