August 2018 update: Bill Schuette wins Republican nod for Michigan governor
Attorney General Bill Schuette has released his 2017 federal income tax return and more details about his personal finances, four days after a Bridge Magazine report chronicling how other candidates for Michigan governor disclosed the information.
Schuette’s finances have been the subject of recent attention, as he and Lt. Gov. Brian Calley — his main rival for the Republican nomination for governor in the August primary election — have sparred over Schuette’s level of financial disclosure.
Schuette on Thursday released his tax returns and the financial disclosure to The Associated Press. He released them to Bridge and other news outlets on Friday morning.
Schuette spokesman John Sellek on Friday said via email: "We released Bill’s finances and taxes when the documents were ready and to media with the widest possible reach for the greatest level of transparency. We (are) also happy to share this information with Bridge Magazine."
Early this week, Bridge published its second report this year on the candidates’ level of self-financial disclosure to help voters gain more insight into the people running for governor and to determine whether the candidates may have potential conflicts of interest once in office. Michigan has been ranked as one of the least transparent states in the nation for government.
Related: Which Michigan governor candidates disclosed 2017 taxes, and which haven’t (May 2018)
Related: Michigan governor candidates release tax returns, other assets (March 2018)
Schuette did not release his 2017 tax return in time for Bridge’s story this week, citing an extension from the traditional April filing deadline he took with the IRS. He also did not release the financial disclosure form by Bridge’s deadline, and previously has said his assets are in a blind trust set up to protect against conflicts of interest while serving as Attorney General.
Among the new disclosures, Schuette cited an adjusted gross income of $648,684 on his 2017 federal tax return, which he filed jointly with his wife, Cynthia. That includes $104,906 in wages and salaries, more than $221,000 in dividends, more than $255,000 in income from capital gains and nearly $46,000 in income from pensions and annuities.
The Schuettes reported owing $73,810 in total federal income tax in 2017.
Schuette’s financial disclosure statement showed he had $323,049 in checking accounts, with $2,156 in unearned income last year. The statement defines “unearned income” as “income received as a return on investment.”
Schuette listed two individual retirement accounts that are considered blind; the first contains $25,652 and the second has $561,253, according to the statement.
Of two blind trusts containing assets, the first is valued at $139,488, according to his statement. The second trust contains nearly $5.6 million in blind assets and close to $5.4 million in non-blind assets.
The non-blind assets are real estate holdings, including two properties in the U.S. Virgin Islands worth a combined $4 million, a 50-percent share of an inherited family home in Colorado worth $211,595 and a one-third stake in an inherited family home in the Virgin Islands that Schuette shares with his two sisters worth nearly $1.2 million.
Schuette did not disclose the real estate when Bridge first requested candidate financial information in February. His campaign did not disclose the property until after Calley cited the Virgin Islands holdings during a recent Michigan Press Association-hosted candidate forum. Schuette and his campaign said previously there was no need to have put the inherited island properties into a blind trust because they could not possibly have posed a conflict of interest.
Schuette and his sisters sold four properties in the U.S. Virgin Islands, inherited after the deaths of their mother and stepfather, in 2012 and 2013 for $7.2 million.
Crain’s Detroit Business reported this week that Schuette’s campaign has not released tax records from the trusts that contain the property, so it’s not known how much he paid in taxes on his one-third share of $7.2 million — or roughly $2.4 million — in Virgin Islands property sales in 2012 and 2013.
Sellek told Crain’s that the property sale proceeds and related taxes went to Schuette’s trust, not Schuette's personal income tax return. Sellek added: "The bottom line is that by working with his personal attorneys Bill has used common estate planning methods, according to the law, and taxes have been paid as required by the appropriate entities, also in accordance with the law.”
Calley spokesman Mike Schrimpf said via email to Bridge: “We know Bill Schuette profited $2 million from his offshore land deals in 2013, yet he only reported taxable income of $313,000. Bill Schuette has repeatedly misled and lied to voters about his finances. The only way to prove that taxes were paid on the millions of dollars in offshore land sales he conducted while Attorney General is by disclosing the tax and financial documents for his trusts.”
Sellek previously has pushed back against Calley’s description of the Virgin Islands property as “offshore,” saying that the use of that word improperly suggests he was seeking a foreign tax benefit when in fact the island chain is a U.S. territory.
In the disclosures Friday, Schuette’s statement also included his Midland home worth $688,000 and a family cottage in northern Michigan worth $555,200, based on state equalized values.
He has $180,192 in a state 401(k) retirement account that is considered blind, according to the report. He earned $112,410 as Attorney General in 2017 and $45,902 in earned income last year from a state Senate pension.
All seven of the Republican and Democratic candidates to succeed term-limited Republican Gov. Rick Snyder have said they support increased financial disclosure among candidates for state office.
View the documents Schuette released here: