Schauer gets two Truth Squad warnings and a TBD in guv town hall

How we make the call

Flagrant foul

A false statement about a candidate’s position or a fact involving policy. It’s one thing to point out differences between records. It’s another for a candidate or third-party group to present false information or inaccurately portray a candidate’s political record.

Regular foul

A statement that distorts a candidate’s record or a fact involving policy, or which omits a fact that is essential to understanding a candidate’s position.

Warning

A statement that may be generally truthful, but lacks context and could easily mislead or be misconstrued.

No foul

A statement, however strident, that is based on accurate facts.

Democratic candidate for governor Mark Schauer spent an hour taking shots at incumbent Gov. Rick Snyder Sunday night. Nothing unusual about that – it’s a campaign. But Sunday night, he was doing it with Snyder just feet away on a stage at Wayne State University. The town hall is likely to be the last time the candidates will share a stage before the election.

See what the Michigan Truth Squad thought of Governor Snyder’s performance at the same town hall forum.

Schauer’s claims, similar to those made throughout the campaign, received mixed reviews from the Michigan Truth Squad.

Education funding

“His first budget cut $930 million from our public schools. He even told the Kalamazoo Gazette ...that those cuts would be difficult. The per-pupil foundation grant, he cut $300 per pupil. ...Today, it is a fact that schools still have less per-pupil dollars in the classroom, than when he started four years ago.”

The supporting documentation for Schauer’s claim is the 2011-2012 school aid budget for K-12 schools, community colleges and universities. The total cut is calculated at $1.16 billion, including $930 million for K-12 schools, $12 million for community colleges and $216 million for higher education.

Both sides in the governor’s race are cherry picking numbers from specific windows during Snyder’s first term to make the case that the governor has cut (or boosted) education funding. In his first year in office, Snyder approved a budget that could be interpreted as a $930 million cut from the previous year.

But that tally does not count more than $154 million added to the budget to allocate $100 per pupil for eligible “best practices” districts, and $288 million to support the teacher pension fund – an obligation districts are required to meet, had Snyder not done so. It also does not account for the loss of more than $500 million in federal stimulus funds that had been available in the previous budget. When taken together, the state ended up spending $12.75 billion in school aid funding in Snyder’s first budget, compared with $12.98 billion the year before he took office. That’s a drop, but one of $230 million – not $930 million.

Schauer said per pupil funding is lower today than when Snyder took office. Depends how you view it. The minimum effective foundation allowance was $7,146 in fiscal 2010-2011 and $7,251 for 2014-2015, which is a higher amount but a decrease when inflation is taken into account.

Schauer’s attack on Snyder fails to give credit to Snyder for pumping more than $970 million into districts’ teacher retirement obligations. That money isn’t buying supplies for classrooms, but it’s money that would otherwise have been spent by districts.

“Reversing school budget cuts”

Several times during the town hall, Schauer said that, if elected governor, one of his acts would be to reverse school budget cuts. This line and similar remarks during the town hall may give some the impression that overall spending on K-12 education decreased during Snyder’s first term in office, as opposed to during his first year (see above). Schauer can make an argument that Gov. Snyder cut school funding in his first budget, and that money flowing into the classroom is down when inflation is taken into account. But there’s no way to look at the data to say overall state K-12 spending has decreased.

The call: Warning

The references to budget cuts over the past four years go right to the edge of a foul call.

Charter schools

“Charter schools were allowed to expand with no oversight. That was a big mistake by this governor. Eighty percent of these charter schools are run by for-profit companies. ...These are unregulated schools with sweetheart real-estate deals, lack of accountability; it is hurting our kids.”

Snyder signed legislation in 2011 lifting the cap on charter schools. A Detroit Free Press investigation published this summer found numerous examples of poor accountability, as well as instances in which individuals profited from the sale or rental of property for charter schools. As far as Schauer’s claims that charters are “hurting our kids,” a Bridge analysis of school test scores adjusted for the income of students found some high-achieving charters, as well as low-achieving ones.

The call: Warning

Schauer’s reliance on a devastating newspaper investigation of charter school accountability provides grounds to defend this broadside by the candidate. While it is not true that there is no oversight of charter schools, it is true, as has been noted, that almost anyone can open a charter school in Michigan, regardless of whether they have prior educational experience, and regardless of whether the company behind a new school has a history of low performance.

Roads

“We are 50 out of 50 [states] in per capita spending on our roads.”

Schauer is referencing a 2010 U.S. Census Bureau data that Bridge reported on in April. Michigan spends $174 per person annually on transportation. Illinois and Ohio each spend $235. Minnesota spends $315.

The call: No Foul

Revenue sharing

“Revenue sharing has been cut significantly by this governor and the impact is fewer police officers and firefighters on the job.”

It’s true that revenue sharing – tax money collected by the state and sent back to communities – has dropped under Snyder. Schauer failed to mention that it also dropped under former Democratic Governor Jennifer Granholm. Revenue sharing is used to pay for local services, which include police and firefighters.

The call: No Foul

The economy

"To claim success or comeback or 'road to recovery' when we’ve got the fifth-worst unemployment rate in the country... The last national jobs report showed Michigan losing the most jobs of any state in the country, 9,500 jobs. We are one of the few states in the country that hasn't recovered all the jobs lost in the Great Recession. According to his own Michigan Economic Development Corp., the leading segment of job growth [and] the fastest growing sector of jobs in Michigan is fast food jobs.”

It’s true that Michigan is tied for the fifth-worst unemployment rate among the states. One jobs survey of employers estimates a job loss in Michigan in August of 9,500, but it should be noted that another survey of households shows an increase in jobs of about 4,000. Schauer’s critique, of course, fails to acknowledge that Michigan’s unemployment rate has plummeted since Snyder took office, which is the half-full portrait that the governor is touting on the campaign trail.

The call: No Foul

Both men escape foul calls by narrowly focusing only on the numbers that enhance their future employment prospects.

Cousin’s state furniture contract

Schauer called for "cutting all the wasteful programs and sweetheart contracts that this governor’s created, starting with his cousin George’s $41 million furniture contract.”

The state Democratic Party obtained emails showing that George Snyder, owner of DBI Office Interiors in Lansing, expressed worries in April 2011 to a top aide to the governor about legislation that could have harmed his company, which sells furniture to state government agencies. George Snyder wrote governor’s aide Richard Baird that he was “very upset and nervous” about a 2011 Senate bill that would have capped new state office furniture purchases at $1 million.

Baird sent the email on to then-state budget director John Nixon, and added that George Snyder is “Gov. Snyder’s cousin.”

“We are on this,” Nixon replied.

The legislation was later changed to allow new furniture purchases of more than $1 million, but requires the state to first consider whether its inventory of furniture can be reused or refurbished before making a purchase. At the time, Haworth Inc. had a $19.2 million contract as the state’s sole-source provider of office furniture, a contract boosted to $41 million in 2012, during Snyder’s first term, according to a contract obtained by the Dems. DBI is a preferred dealer of Haworth and through that relationship sold millions of dollars of furniture to the state.

Snyder’s office has steadfastly maintained that the emails do not reflect an effort to help the governor’s cousin or give him special treatment because of his ties to the governor. Nixon later said he already knew George and Rick Snyder were related and that Baird was merely trying to alert him to a potential conflict of interest in flagging their family ties.

In raising questions about the contracts and email exchanges, Schauer and state Democrats fail to highlight that DBI had scored contracts with the state well before Rick Snyder came into office. Further, as the governor noted at the town hall, state spending on furniture with DBI has fallen since Rick Snyder took office, from $18.5 million in the last three years of Gov. Granholm’s administration, to $17 million in the three years since the start of 2011.

So does the record support Schauer’s claim of a sweetheart deal?

Other than the emails, there does not appear to be definitive proof that Snyder’s office swung into action to protect George Snyder’s company, or used its influence with Republican lawmakers to soften the bill’s impact on DBI. On the other hand, as Truth Squad noted in addressing this controversy in May, in politics the perception of impropriety can be as damaging as actual wrongdoing. Bringing these emails to light was well within the bounds of fair play. George Snyder did his cousin no favors by asking Baird to intervene, and the outcome of the bill certainly raises fair questions about what role if any family ties may have played.

The call: No Foul

Pension tax

“Job-killing pension tax.”

Schauer used this term several times during the town hall, a new twist on an issue that has proven potent for the challenger.

In 2011, Snyder signed into law several changes to the Michigan tax code that slashed taxes for businesses by $1.65 billion, and made up for most of that cut by increasing income taxes. A big and controversial part of that income tax increase was the taxing of public and private pension income. That change alone was expected to raise for the state, and cost pension-receiving taxpayers, about $343 million in fiscal year 2012-13.

The changes are phased in, with those reaching the age of 67 in 2020 or after facing more taxes. According to a House Fiscal Agency analysis, a retired couple born after 1952 with $48,000 in pension income would pay $3,130 more in taxes.

The question, though, is how a pension tax is a job killer? Schauer didn’t go into detail. Perhaps the rationale is that when retirees pay more in taxes they have less money left to spend in their communities, hurting businesses that otherwise would have created more jobs. And perhaps that question could have been put to Schauer after the debate, but alas he didn’t show up for a press conference. A request to Schauer’s campaign for documentation of job losses caused by the pension tax was not answered Sunday evening.

The call: To be determined

We will update this call when Truth Squad receives more information.

Gay rights

"This governor, through his own legislature, banned domestic partner benefits for gay and lesbian state employees."

In 2011, Snyder signed legislation that banned same sex partner benefits for state employees.

Snyder asked a federal judge to continue the ban earlier this year.

The call: No Foul
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Comments

Jeff Salisbury
Mon, 10/13/2014 - 8:55am
$7,251 for 2014-2015? I'm a former teacher (1985-2009) and school board member (2010-2014) and if you could help us find the $7,251 for 2014-2015 I'd really, really, really appreciate it.
Jeff Salisbury
Mon, 10/13/2014 - 9:05am
If you question Schauer's claim that a pension tax is a jobs killer why would you not question Snyder's claim that the MBT was as well? And while you're asking questions, you fail to question how it is that Snyder pumping more than $970 million into districts’ teacher retirement obligations was even necessary. Did the MPSERS board formally request the deposit? What triggered the $970 million contribution? Whim? Do you just assume the MPSERS fund was not earning enough interest/dividends/growth to cover expenditures? Your claim that the money would otherwise have been spent by districts as individual MPSERS contributions is complete conjecture and has no basis in fact.
Robert Kleine
Mon, 10/13/2014 - 9:23am
The pension tax increase can not be directly tied to job losses but job growth in Michigan relative to the US has slowed since January 1, 2012 when the tax changes went into effect. From March, 2010, when employment hit bottom, to December, 2011, Michigan employment increased 4.1% compared with a national increase of 2.3%. From December 2011 to August, 2014, Michigan employment increased 3.9% and national employment increased 5%. The average monthly job gain in Michigan before the tax changes was 7,523 and 4,844 after the tax changes. At the time of the tax changes I argued that the increase in taxes on individuals was likely to more than offset any positive impact from the cut in business taxes. Businesses are not the job creators, consumers, who account for 70% of the economy, are the real job creators. If you reduce consumers income demand will fall and there will be a negative effect on job growth. The main impact of the business tax cut was to increase business profits with a large share going to out of state businesses, and with no guarantee that the increased profits for Michigan based businesses were used to hire more workers.
Buddy Moorehouse
Mon, 10/13/2014 - 9:56am
"almost anyone can open a charter school in Michigan." I need to issue a Warning on the Truth Squad for that one. That's like saying "almost anyone can do brain surgery at the DMC." It's technically true, but you need to jump through an awful lot of hoops before they let you get there. You're making it sound like all you need to do is show up and fill out a form, and they'll let you open a charter school. That's an insult to the excellent job Michigan's authorizers do.
Tim
Mon, 10/13/2014 - 10:12am
HB 4770 (PA 297 of 2011) did not prohibit domestic partner benefits for state employees or university employees, as specifically pointed out in Snyder's signing letter accompanying the bill. He pointed out that "Article XI, Section 5 of the Michigan Constitution gives the Civil Service Commission responsibility for setting rates of compensation and regulating all terms and conditions of employment for classified employees." In a complete reversal, he later argued in a different court case that the legislature could enact right to work laws for state employees, despite this obvious, specific delegation of that authority solely to the Civil Service Commission. See the signing letter at: http://www.michigan.gov/documents/snyder/122111_HB_4770_Signing_Statemen...
marc
Mon, 10/13/2014 - 10:40am
in regards to the pension question, my wife works for our local public schools and she has had to change how to work with her pension and also now has to pay in more. not sure how that 970 mil was used. also I seem to remember under engler they took a bunch of $$$ out of the schools (pension? / per pupil funds? or exactly what) and it has never been replaced. also, lottery funds which were supposed to add to schools were merely a bait and switch tactic to cut budgets. we nee to promote education which costs money in order to benefit the economy.
George Ehlert
Mon, 10/13/2014 - 11:52am
The Democrats ignored any structural changes to MPSERS for years; funding was and is necessary to keep the rate paid by the districts stable. Jeff: That is not conjecture - the rate has been established by the pension board and the state contributions effectively pays the difference between the actual rate needed and the stable rate being honored by our Governor. By the way, I have not seen any MEA lobbyists advocate against these payments. Regarding the "pension tax", Schauer ignored the direct question as to why he believes my retirement income, received via a 401(k) will be and should be taxed under his proposal but retirement income received via a pension should not? Where is the fairness? many low to middle class workers only have a 401(k) and not a Defined Benefit plan - this is primarily a gift to his union bosses yet he doesn't have the backbone to even admit it.
Chuck Fellows
Sun, 10/19/2014 - 1:19pm
The legislature ignored, not any specific political party. Further, in the 1990s the retiree health care provisions were not funded, a choice made to "pay-go" was made ignoring to consider the demographics impacting future rates of retirement. The estimated rate of return has been set at 8% which is unrealistic but it does make the unfunded liability risk look much lower which no doubt helps in producing a balanced budget.
Chuck Fellows
Mon, 10/13/2014 - 12:56pm
Truth Squad "Foul". Context is everything. Pumping $970 million into the teachers retirement fund is not an increase in per pupil funding. Sorry Truth Squad, you didn't listen to what Schauer stated, "per pupil funding". Less money is in the classroom, period! Some believe that "shoring up" the teachers retirement fund is a sign of a good thing. Why is it necessary to "shore up" the teachers retirement fund? Is it because in the 90s a benefit was provided to teachers but the benefit was never funded? (A neighboring system is funded 70 years out and earns a 13% rate of return - through the recession! Ontario Teachers Pension System) Is it a good thing to "shore up" a retirement fund while at the same time pull an accounting "shoo-be doo" and base your funding calculation on an 8% rate of return when reality suggests it should be more like 3%? That little accounting trick makes the unfunded liability appear smaller than it actually is. Who is zooming who here? Did I fail to mention the $500 million in teachers money that went poof thanks to the investment rules promulgated by - guess who - the politicians! (This is hid by labelling it "accrued liabilities" in Treasury reporting) Why is it we praise this gross example of political chicanery - increased per pupil funding - when it is really a game of words that has nothing to do with supporting learning and everything to so with making politicians look good at childrens' expense? Here's the truth. Back in the 90s a benefit was provided and never adequately funded. Now the bill is due and politicians of every stripe are too afraid to fess up and tell the public that funding our commitments is now necessary and therefore we have to pass a tax increase. Instead these politicians blame everyone else and play numbers games so they do not have to do what they took an oath of office to do - govern. We the people are liable since we elected and then paid no attention to the buffoons running the show! That's nonfeasance, misfeasance and ,malfeasance all rolled up in one!
Jim
Mon, 10/13/2014 - 4:54pm
Let's look at the other side. With a reduction in the business tax, did "companies" invest their savings in their business to expand, or did they increase their profits and increase their executives salaries and benefits? Were is the economic growth from their savings?
Timothy
Mon, 10/13/2014 - 10:02pm
If all the educators will accept a 401K plan and the rescindence of thier healthcare in retirement. Then there will be plenty of money for the schools. Any takers out there? Didn't think so. Stop bitching.
George Ehlert
Tue, 10/14/2014 - 10:38am
Chuck, Chuck, Chuck: Here you go again. Who says its a good idea to shore up the pension plan? Start with the State Constitution. You don't want it funded yet you lament about the "bill coming due" - like most Democrats, you want it both ways. Oh wait, Pass a tax increase. Why not pass six increases - instead of a rain drop, we can have a real Schauer. One for teachers pension, another for salaries, another for roads, another for EITC, a big one for revenue sharing, and the last to return the "pension tax break" to the MEA. I seem to recall you were an economics teacher - thanks for your insights. PS: I see you also ignored the fairness issue of tax breaks for union pensions but not for 401(k) income. That makes you Democrat of the Day - look for your trophy in the mail.
Chuck Fellows
Sun, 10/19/2014 - 1:49pm
The Consitution of the State says “The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired.” I believe we should fund the retirement plan and be honest in how we go about it. You might say not funding the plan is an "impairment" but the legislature has a tendency to ignore the Constituion, revenue sharing for example. And a simple lesson in economics and business. You take care of your infrastructure and if you want to grow an economy you must invest in the future which does involve taking some risk, not sticking your head in the sand and ignoring the problem. That's the kind of behavior that destroys organizations and societies. In order to proceed in a prudent manner revenue is required. The alternative is to let infrastructure and investment in the future lag which turns businesses away. Let me correct your memory - a business person of forty years that spent six years post retirement discovering the dysfunctional and incompetence present in the management of our schools. Not the teachers, the management. As Deming said repeatedly, 96% of the problem is management, 4% the worker. I do want the state (that's us) to live up to its commitments, commitments made in good faith bargaining and stop playing shell games or changing the rules of the game midstream. Teachers and all municipal employees were handed a set of expectations and now the state (that's us) has decided that they will avoid stepping up to the responsibility for a commitment made. At least they could be honest and up front and let the people affected know that the state (that's us) no longer wants to adequately fund their retirement expectations and instead will transfer some money from the classroom (AKA children) in order to "shore up" the fund and at the same time play accounting tricks to make things look better than they are. I really would prefer that government stop playing politics and be up front about the $142 Billion dollar debt the state carries today. Unfortunately we do not have public financing of campaigns so the golden rule applies, "He who has the gold rules". Our wonderful balanced budget is a plan to oblivion, but it is balanced as the law requires.
Barry
Tue, 10/14/2014 - 3:22pm
Re: Pension tax. I paid into my Civil Service pension for 35 years at a much higher rate than Social Security. Retired in 2006. I did NOT pay into Social Security and as a result do not receive it for those 35 years. My pension system was in Lieu of Social Security. If I had paid into Social Security, Railroad Retirement or a military pension, that money would not be taxed but since I am in a "public pension system" the money is taxed. Where is the fairness in this. My pension should be as sacrosanct as those other "publicly controlled pensions". Governor Snyder and my State legislators are very much aware of this as I have spoken to them face to face and written letters to them explaining it. No reply. They have, in effect, taxed my Social Security benefits, a situation none of you would stand for.
Shaun
Wed, 10/15/2014 - 9:49am
You must have been a federal government worker to be able to opt out of social security. You're lucky to have avoided that tax for 35 years. I am sure your pension provides you a much better retirement than what social security would. The rest of us aren't that lucky. Paying into social security really isn't optional. I have no sympathy that you now have to pay a state tax on your pension considering you avoided a much higher tax all your life.
Bill
Mon, 10/27/2014 - 11:28am
The tax should not have been imposed retroactively .