MICHIGAN TRUTH SQUAD ANALYSIS: Jeff Oesterle v. Tom Cochran
Who: Friends of Jeff Oesterle (http://www.jeffoesterle.com/), Committee to Elect Tom Cochran (http://votetomcochran.com/), Michigan Republican Pary ("Loyalties" mailer, "Sand" mailer), Michigan Democratic Party ("Example" mailer, "Polluter" mailer)
What: Websites and mailers
Truth Squad calls: Flagrant foul and Foul on Democratic mailers; Foul and Technical foul on GOP mailers; Foul on Oesterle website; Technical foul on Cochran website
This Truth Squad report covers numerous campaign materials from both sides in the race for the seat in District 67 of the Michigan House of Representatives.
Michigan Democratic Party "Example" Mailer
The mailer argues Oesterle raised his own pay while residents of Vevay Township, where he was supervisor, were struggling economically.
Questionable statement: "Politician Jeff Oesterle is serving himself and his relatives first, while middle class families struggle in tough times. As township supervisor, Oesterle raised his own salary nearly 300%. He also gave his relatives contracts, perks and even jobs -- paid for by taxpayers.
The mailer cites Vevay Township board minutes ranging from September 1982 through March 2000.
Oesterle served as township supervisor from 1982-2000. According to board minutes provided to back up the claims on the mailer, Oesterle made $790 a month in 1991-92, and that was after a 10 percent increase approved in 1988. In 2000, his salary was up to $1,800 a month.
$1,900 is not 300 percent of $790 -- and minutes were not provided to show what his pay was when he started in 1982.
The board voted to hire Robert Oesterle as assessor, for $500 a month plus $100 a month travel, in September 1982. In October 1982, the board approved a farmland exemption for Donald and Josephine Oesterle. Jeff Oesterle retained Charles Oesterle to represent the township in a lawsuit in November 1985. In April 1995, the board approved wages for Candice Oesterle for a clerical position.
Robert Oesterle was a third cousin, campaign officials acknowleged. They were not sure of the relation of the other Oesterles.
Decisions were made by the five-member Vevay Township board, which includes the elected supervisor post. The board minutes indicated Oesterle would have voted in favor of all of the motions.
The board also, in November 1989, approved a PA 116 application for Oesterle and wife Dawn. The program reduced property taxes on farm land in exchange for an agreement not to develop the land. The application was approved and forwarded to the state on a 5-0 vote, and Oesterle was one of only five members of the board listed as present in the minutes.
Ethics laws for local government officials seem to indicate that hiring family members would not be a violation. The Michigan Townships Association noted that, in many small communities, officials will hire their spouse as a deputy because many of their duties are carried out at home.
Oesterle’s vote on the PA 116 application could be a violation if that application is considered a contract between himself as property owner and the township. The minutes indicate that the application was submitted to the state for action after being approved by the various local governments that could be affected by the tax break.
Questionable statement: "Something’s wrong when seniors and middle class families are forced to pay more taxes and school funds are cut — while wealthy CEOs get tax breaks and politicians get lavish perks."
The statement on the mailer refers to tax changes pushed by Gov. Rick Snyder during his first year in office. These include elimination of most of the deductions on the income tax, including deductions for pension income and the Earned Income Tax Credit, as well as a freeze on the rate at 4.35 percent. The Michigan Business Tax also was replaced with a new 6 percent corporate income tax, though larger corporations are still covered by the income tax, while small businesses, generally, are not.
The package, explained in large part here, did eliminate the tax credit for pension income for some seniors (the change was phased in based on when the retiree was born), increasing their tax bills. The Senate Fiscal Agency had projected the change would mean $409.1 million for the state fiscal year that just ended, though a small portion of that amount also came from elimination of a credit for unemployment income.
In total, the elimination of the various income tax credits was projected to bring $559.1 million the first year and $1.42 billion for the fiscal year that started Oct. 1.
So some seniors and those in the middle class will pay more, but so will the "wealthy CEOs", who saw the same elimination of tax credits.
One change could be considered a giveaway to rich CEOs: the package included changes that ensured business owners who paid small business owners who had paid both MBT and personal income tax on their business’ earnings would only pay one tax.
The package did, however, constitute a shift from corporate taxes to personal taxes. Initial estimates had the new corporate income tax bringing in nearly $2 billion less than the MBT. The SFA analysis showed the changes would bring in $1.09 billion for last fiscal year and $1.65 billion for the current fiscal year.
The budget for last fiscal year did include cuts to education, $475.16 million. It cut $170 per pupil for K-12 education. And the budget for the first time used School Aid Fund revenue for universities and community colleges.
The current year budget restored $200.52 million of that, with $120 more per pupil.
So money to local schools has been cut in recent years.
But so have "lavish perks and expense accounts" for the Legislature. The current members had their pay cut 10 percent under a recommendation of the State Officers Compensation Commission approved in 2009.
The Legislature did increase its funding for the current fiscal year by $6.28 million, but none of that went to operations for either chamber. They held their spending steady from the prior year.
Legislators also in 2011 eliminated retirement health care benefits for current and future members through Public Act 200 (Senate Fiscal Agency analysis).
Members do have office expense accounts, which include wages and benefits for their office staff, and are reimbursed for certain travel including one round trip to the capital each week. They also receive $900 per month (about $11,000 annually) for food and lodging. But the largely unfettered officeholder expense accounts, funded through contributions, have been gone for more than a decade.
Questionable statement: "As Lansing Fire Chief, (Cochran) cut his own pay 10%. He slashed $1.5 million in wasteful spending and closed a $3-million deficit, saving the city money."
When Cochran was chief, the city did save $1.5 million in 2010 by closing a fire station, changing health benefits and reducing daily staffing levels, according to a Lansing State Journal article. City department heads, such as Cochran, absorbed a 10 percent pay cut as part of a city-wide budget reduction.
Foul or no foul: Flagrant foul. The mailer says Oesterle made decisions on his own, while using citations from board minutes that clearly show collective decisions. Michigan does not have a nepotism law when it comes to public officials, such as those who serve on township boards. While individual local governments can choose to adopt ethics rules involving nepotism, they are not required to do so. Also, the mailer would have voters believe that Cochran was making major budget decisions alone. The city of Lansing has an elected mayor and City Council that handle its major budget moves.
Michigan Democratic Party "Polluter" Mailer
The mailer argues Cochran will support legislation that would make polluters pay for chemical spills where Oesterle would support legislation that moves some of those costs to taxpayers.
Questionable statement: "840,000 gallons of oil and $800 million in cleanup costs — the most expensive on-shore oil spill in U.S. history. They expect us to pay for that?"
The Washington Post, in the cited July 10, 2012, article, did quote a National Transportation Safety Board report that, at that time, the spill cleanup cost had exceeded $800 million and that it was the most expensive on-shore oil spill to date.
There are, however, no indications that the government is expecting to take on the costs of the cleanup. The pipeline’s owner, Enbridge, has been billed for all of the costs of the cleanup so far, according to regulatory officials.
Questionable statement: "The National Transportation Safety Board blamed ‘pervasive organizational failures’ at a Canadian oil company for the spill of over 840,000 gallons of crude oil into Michigan rivers."
The NTSB did find in its report that Enbridge found, but did not repair, cracks in the pipeline near the Kalamazoo River as early as 2005. The agency also cited the company for restarting the pipeline twice after leak warning systems had shut it down before sending workers to check the site.
The report also cited federal officials for insufficient oversight of the company.
Questionable statement: "Corporate polluters caused the spill – yet Michigan families are left with the mess."
After the initial spill, some residents were evacuated from the area and much of the area affected by the spill was closed for a variety of recreational activities.
Much of the spill area has since been re-opened to activity, but the U.S. Environmental Protection Agency has not yet declared the area cleaned up. The EPA on Oct. 3 notified Enbridge of three specific areas that needed additional cleanup.
Questionable statement: "Jeff Oesterle is supported by politicians who took huge campaign contributions from oil companies and then eliminated safety measures that protect our air and water. They’re letting oil companies like Enbridge off the hook when they pollute our rivers and lakes — sticking taxpayers with the bill."
The bills cited by the piece do not, though, necessarily transfer costs to taxpayers.
SB 1090 (PA 190 of 2012) allows natural attenuation as a way to clean up spills, allows companies to do no more than monitor if pumping out groundwater shows to have de minimus or no effect on surface water, and allows companies to appeal to the Department of Environmental Quality that the standards for the cleanup are technically impractical. While those provisions could reduce the level of cleanup required, that would not necessarily mean the state would have to do more at its own expense.
The underground storage tank package signed this year (SB 528, PA 108; SB 529, PA 109; SB 530, PA 110; SB 531, PA 111; SB 532, PA 112; SB 533, PA 113) would allow a new owner of a property with a leaking underground storage tank to avoid paying for the cleanup by conducting certain tests, but the owner or operator responsible for the spill would still be responsible for the cleanup, according to a Senate Fiscal Agency analysis of the package.
The package does limit destruction of natural resources fines to $50 million.
Oesterle did receive campaign donations from legislators who had supported the legislation, including $1,000 from House Speaker Jase Bolger’s (R-Marshall) Bolger Restore Michigan Fund, $500 from Rep. Jim Stamas’ (R-Midland) Stamas Leadership PAC, and $100 from Rep. Paul Muxlow’s (R-Brown City) campaign fund. That was out of $28,764 Oesterle had raised as of Aug. 27.
Bolger’s PAC had contributions from Consumers Energy ($5,000), DTE Energy ($2,500), the Associated Food and Petroleum Dealers ($2,500), the Michigan Propane Gas Association ($1,000), the Michigan Petroleum Jobbers ($500). That $11,500 was out of $117,500 the PAC had raised so far this election cycle.
Bolger’s campaign had contributions, during his entire time in office, from DTE Energy ($7,500), CMS Employees for Better Government ($2,100), Cleveland Cliffs ($1,000), Michigan Petroleum Jobbers ($1,000), SEMCO Energy ($950), Michigan Petroleum PAC ($500) and SEMCO Energy ($250). Bolger has raised $204,760 for the election cycle.
So Bolger did take contributions from oil and other energy companies, and some to his campaign committee were at the $500 cap for PAC donations to a House member for the current election cycle, but they were not necessarily "huge" in light of his overall fundraising.
Foul or no foul: Foul. Several claims of taxpayers holding the bill for the Enbridge spill, without evidence provided to support it.
Michigan Republican Party "Sand" mailer
The mailer says Cochran opposes taxes on pensions, but says other residents of the state end up paying for those credits.
Questionable statement: "Tom Cochran says he opposes taxing public pensions, even generous pensions over $100,000. We pay for those pensions with our tax dollars. Is it fair to offer them a tax break at our expense?"
Cochran has said he would fight to reinstate the tax exemptions for public pensions and has not indicated any plan to keep the tax for those with larger pensions. But it is also rare to see a public pension paying more than $100,000 a year given the average wages for state employees.
The funds for public employee wages would come from taxes, but Cochran and others supporting reinstating the credit have not indicated they would push for other tax increases to pay for it.
Questionable statement: "While we pay our taxes and play by the rules, Tom Cochran opposes taxing public pensions."
The statement implies that public employees would be skirting the rules by not paying taxes on their pensions. But the Legislature had set the rules that allowed public employees to avoid taxes on their pensions.
Questionable statement: "Tom Cochran is eligible for a public pension. Is that the reason he opposes taxing them?"
Cochran is eligible for a public pension, having retired as Lansing’s fire chief. But the Legislature is already working on changes (SB 409) that would reinstate some of the credit for retired police and firefighters. Those two professions are not eligible for Social Security.
Foul or no foul: Foul. "Play by the rules"? The rules for many years in Michigan were that public pension income was exempted from the state income tax. That changed in 2011 under a plan pushed by Gov. Rick Snyder -- a change that still provides an exemption for those born before 1946. Taxation is a matter of public policy -- a policy that citizens can disagree over.
Michigan Republican Party "Loyalties" mailer
The mailer claims that, because Cochran was a union leader and received campaign contributions from unions, he will put their interests before those of the rest of the state’s residents.
Questionable statement: "Tom Cochran puts unions first."
The mailer provides no backing for this statement. As Lansing fire chief, Cochran pushed a contract that reduced working hours for firefighters and changed them to a less costly health insurance plan, not something the union would have promoted, though the move did eliminate the need for layoffs.
Questionable statement: "Tom Cochran has been a member and president of several unions, including government unions."
Cochran does acknowledge on his website that he was a member of UAW Local 1753, which represents General Motors Corporation employees in Lansing. He was also a member and, at one point, president of International Association of Fire Fighters Lansing Local 421, which represents Lansing firefighters.
But he also served as Lansing fire chief, negotiating on the other side of the table from the union, for five years.
Questionable statement: "The union establishment is funding his run for state representative."
A number of unions have given to Cochran’s campaign. UAW Michigan V-PAC gave $5,000, Operating Engineers Local 324 gave $5,000, Michigan Professional Fire Fighters Union gave $2,500 and the Michigan Nurses Association PAC gave $250. Those four contributions were out of 127 total listed with the Department of State. But his latest report showed Cochran had raised $20,592, so the union contributions accounted for more than half of his funding.
Questionable statement: "As a public union boss, Tom Cochran negotiated 10 fire department contracts with the city of Lansing — resulting in taxpayer-funded retirements much higher than those of other government employees."
The source cited in the mailer does state that Cochran was involved in negotiating eight contracts for the Lansing Fire Department, five as chief. It also says he served 10 years as president of the local union. But the site, at least currently, does not say anything about the value of the pension benefits resulting from those contracts.
Foul or no foul: Technical foul. The mailer is on solid ground with Cochran's union background, but it fails to substantiate the claim that city of Lansing firefighter contracts in which Cochran was involved resulted in "taxpayer-funded retirements much higher than those of other government employees." The citation offered is for the vote411.org website -- a voting service site from the League of Women Voters Education Fund -- on Nov. 21, 2011. But a review of the site finds no specific reference to Lansing public pensions.
Cochran campaign website
Questionable statement: "An estimated 90,000 older and vulnerable adults are victims of abuse, neglect or exploitation each year. It’s an alarming number that needs to be and can be reduced with the right amount of education and awareness."
Cochran does not indicate where the statistic comes from. The National Center on Elder Abuse said studies show as much as 5 percent of the elderly population faces abuse or neglect. The 2010 Census showed Michigan with 1,361,530 residents age 65 or older. Five percent of that figure would be approximately 69,000. AARP Michigan says it does not have a calculation for the number of elderly abuse victims in Michigan.
The Center on Elder Abuse said, "Educating seniors, professionals, caregivers, and the public on abuse is critical to prevention."
Foul or no foul: Technical foul. Saying a number is "alarming" is a problem without providing the context for the figure.
Oesterle campaign website
Questionable statement: "Unemployment has finally started moving down due to the fact changes have been made in the business climate in Michigan. Job providers are finally showing interest in coming here again."
The implication is that the changes made in the last two years under the Republican-controlled Legislature and Governor’s Office, but unemployment actually began falling in 2010 under former Gov. Jennifer Granholm, and has been climbing since spring.
The tax changes, for the most part, did not take effect until Jan. 1, 2012, so most taxpayers will not see the effects until they file their taxes in April 2013.
Questionable statement: "Agriculture is the second largest industry in the state and an industry that didn’t falter during the economic downturn. We need to help provide markets home and abroad for Michigan agriculture. This includes the manufacturing base for the processing of raw commodities into the merchandise consumers take home every day."
This claim is likely built on a much-referenced Michigan State University study. However, that study took an extremely expansive definition of agriculture as an industry.
As reported back in 2011, a number of economists are harshly critical of claims made off the study.
According to federal economic statistics, agriculture was the 14th largest industry in the state by gross product in 2010. Federal jobs data found about 70,000 farmers, managers, and field workers directly employed in agriculture, out of about 4 million jobs statewide. Agriculture interests have been arguing for many years that theirs is the second largest industry, though some economists have argued the figure used to support that assertion includes some grocery store retail sales that should not be credited to Michigan agriculture.
Reports from around the country indicate agriculture did not lose as much ground during the recession as other sectors.
Foul or no foul: Foul. "Agriculture" is not the state's second-largest industry. And while Michigan's unemployment rate trended down in 2011 and the first part of 2012, it has been on the rise again since April, reaching 9.4 percent in August, the most recent figures available.