Proposal 2 extends far beyond DTE and Consumers Energy—and it violates the Constitution.
Michigan’s energy framework is in disarray. Yet the campaign-finance ballot measure approved by voters this week won’t resolve that quandary, and it will impose speech restrictions that are unconstitutional and far broader than most people understand.
On November 3, more than eighty percent of Michigan residents backed Proposal 2. Voters can be forgiven for the impression they had about what they were voting for.
The majority of advertising for Proposal 2 stressed its goal of removing money from politics, signaling that the measure would serve as a response to the so‑called ‘monopoly’ of energy and health‑care companies blamed for steep bills in Michigan. Opponents did not receive substantial funding, and supporters framed the issue as one about “paying the highest energy rates in the Midwest for the worst service.”
Here’s what appeared on the ballot:
The proposal would:
- Bar regulated electric and natural gas utilities, contractors with more than $250,000 annually in government contracts, and individuals and entities with substantial ties to these utilities/contractors from making direct or indirect campaign contributions to those who run for or hold offices that affect them.
- Widen the rules governing spending on political communications, including donor disclosures, to cover communications that clearly reference candidates or ballot questions, even if they do not expressly urge a vote for or against them.
- Explicitly apply the disclosure requirement for who funds political communications to online political messaging.
Should the measure be adopted?
Most of the state’s news coverage centered on the first provision limiting political contributions from utility firms.
That concern has merit. Michigan law effectively grants a monopoly to two companies—Consumers Energy and DTE—to supply electricity to residents. A separate law imposes a renewable energy portfolio and essentially requires wind turbines and solar panels to provide all electricity within the next 15 years. These policies push up electricity rates and, in some ways, degrade the reliability of the grid and the service offered.
Yet this new statute represents an unusual method for addressing that problem. A simpler approach for supporters would have been to propose giving citizens a choice about who supplies their electricity. Historically, Michigan enjoyed some of the Midwest’s lowest electricity prices when such a choice existed.
To grasp the core problem with Proposal 2, one must look beyond the headlines and the first bullet. In fact, the entire text of the new statute is necessary to understand the sweeping nature of the law residents have just enacted.
Proposal 2 doesn’t merely curb political spending by utilities and health-care companies. It imposes a broad array of new rules on hundreds of groups in ways few anticipated. Most notably, the measure subjects anyone who refers to a candidate online or in print within 100 days of an election to new disclosure duties. It also requires the public release of private information—name, address, occupation, and employer—of anyone contributing more than $100 to a group that reports on political candidates. Noncompliance carries heavy fines and criminal penalties, including potential jail time.
Many entities that report on politicians without taking a position—newspapers and television reporters, nonprofit voter guides such as those produced by the League of Women Voters, influencers with large social media audiences—will all fall under these new campaign-finance rules and will be obliged to disclose private details about donors or subscribers.
For this reason, the Mackinac Center for Public Policy and the Institute for Free Speech have filed a federal lawsuit challenging the law. The new rules could prevent the center from hosting databases, producing legislative scorecards, reporting on news, and carrying out a wide range of nonpartisan activities. They contend that the courts should view Proposal 2 as a violation of the First Amendment—and strike it down.
