August 2018 update: Gretchen Whitmer wins Democratic primary for Michigan governor
August 2018 update: Bill Schuette wins Republican nod for Michigan governor
As gubernatorial candidates lay out plans for moving Michigan’s economy forward, it’s not too hard to tell Democrat from Republican.
Democrats Abdul El-Sayed, the former Detroit public health chief, and Ann Arbor businessman Shri Thanedar propose spending billions of dollars on roads and education, some form of free college and pose major tax hikes on business and wealthy individuals. Former state Senate minority leader Gretchen Whitmer wants to spend $100 million to make the first two years of college or vocational training debt free. They’d all hike the minimum wage to $15 an hour.
Among Republicans, there’s no call to raise the minimum wage. They’ve no plans for free college. There are certainly no calls for tax hikes to address the state’s dizzying infrastructure and education challenges.
Attorney General Bill Schuette would cut the personal income tax. State Sen. Patrick Colbeck wants to phase it out altogether. Lt. Gov. Brian Calley proposes no tax cuts, while saying he wants to continue Michigan’s economic recovery. Saginaw Physician Jim Hines would keep “taxes and regulations under control” and also cut the income tax.
The two Libertarian candidates, meanwhile, are also averse to any ambitious government spending plans. Redford construction owner John Tatar would dump the personal income tax and abolish the Michigan Public Service Commission. Kent County title examiner Bill Gelineau would ax the Michigan Strategic Fund and lower state spending allowed under the Headlee Amendment.
Here are the highlights of where the candidates facing primary races stand on economic issues:
- Raise the minimum wage to $15, a proposal that would give Michigan a higher minimum wage than the current minimum wage of any state. It now stands at $9.25 an hour in Michigan, and is to rise with inflation in 2019 and thereafter.
- Consider taxing Social Security income, earmark funds from recreational marijuana sales and reduce corporate subsidies to provide two years of tuition-free college, community college or vocational training for children of families making less than $150,000 annually.
- Collect sales tax from online retailers and end other sales tax exemptions to raise the state’s per-pupil foundation grant to school districts to $9,590 per student — about $2,000 more than Michigan currently provides.
- Tax the gross earnings of businesses making more than $2 million a year and raise the state’s flat 4.25 percent income tax to 5 percent for the lowest earners and up to 8 percent for the state’s wealthiest to provide universal health care for Michigan residents up to age 65. Since Michigan’s constitution bars a graduated income tax, any shift to a graduated tax would have to be approved by voters to change the constitution.
- Expand access to high-speed internet by devoting $2 billion in state funding over the next 25 years, including $1.5 billion to public-private internet partnerships.
- Repeal the right-to-work measure signed by Republican Gov. Rick Snyder in 2012 that bars unions from contracts that require employees to pay labor dues.
- Quote: “Nobody should have to work two or three jobs in order to support their family and live a dignified life.”
- Raise the minimum wage to $15 an hour.
- Raise Michigan's 6 percent corporate income tax to 10 percent for C-corporation companies with annual gross receipts over $1 million and create a 7.5 percent tax rate for businesses with $350,000 to $999,999 in yearly gross receipts.
- Raise income taxes on the wealthy by establishing a graduated state personal income tax to replace the 4.25 percent flat income tax. He would tax millionaires at 10 percent and those making between $200,000 and $1 million a year at 8.85 percent. Households under $50,000 income would pay no income tax.
- Use $3.6 billion in projected extra tax revenue to fund universal child care, universal preschool and paid family leave.
- Offer free college for those from families making less than $120,000 a year, “by working with colleges and universities on fiscal challenges.”
- Repeal Michigan’s right-to-work law.
- Enshrine collective bargaining rights in the state constitution. That could be easier said than done - in 2012, voters rejected a proposed constitutional amendment to guarantee public and private bargaining rights by 57 percent to 42 percent.
- Require paid family leave “so families do not lose economic ground when they have a child or when a health crisis hits.”
- Quote: Currently, “the wealthy keep much more of their earnings while middle class workers are paying more than their fair share in taxes and fees.”
- Raise the minimum wage to $15 an hour.
- “Repeal the retirement tax,” a reference to a 2011 change to the Michigan tax code signed by Snyder that taxed public and private pension income. That change was expected to cost pension-receiving recipients $343 million in fiscal 2012-13.
- Offer high school graduates two years of debt-free community college, skilled trades training or the equivalent aid for attending a four-year university. She has not detailed how she would fund its estimated $100 million annual cost.
- Consider hiking motor vehicle “user fees” to pay for a state infrastructure bank capitalized with up to $2 billion in new state bond debt each year for a decade. This would leverage an additional $1 billion a year in local, federal and private funding for state infrastructure.
- Expand training for those on food stamps by tapping into a 50-50 federal match for such training.
- Repeal the right-to-work law.
- Quote: “Many Michigan families are struggling to get by. We have an economy of Haves and Have-Nots.”
- Streamline the social service system by requiring “everyone on assistance to develop and follow a plan to reach independence” and remove barriers to employment
- Back Snyder’s “Marshall Plan for Talent,” which will spend $100 million on scholarships, childcare and school programs to help expand fields such as computer science and skilled trades.
- Reform Michigan’s no-fault auto insurance system by establishing a state agency to investigate fraud and opening the Michigan Catastrophic Claims Association's books to the public.
- Increase spending on roads, by spending $1.2 billion on roads in fiscal 2020, speeding up by a year the phased-increase of road spending first approved by the legislature in 2015.
- Quote: Calley’s campaign website says he is “the only candidate with a plan to take Michigan’s economy to the next level.”
- Phase out the 4.25 percent personal income tax, which raises about $9.8 billion a year. He would do so “by incrementally decreasing the state income tax based upon the achievement of specific expense reduction and economic growth milestones and keeping whole the funding for priorities such as schools and road funding as we do so.”
- Fix the roads “without raising taxes,” by investing more money up front to construct higher quality roads that have lower long-term maintenance costs.
- Improve health care by backing direct primary care, under which patients pay a fixed monthly fee for basic primary care and in some cases basic lab tests and X-rays. It does not cover anything beyond primary care, including hospitalization.
- Quote: “Tax increases always should be the LAST option considered NOT the first.”
- Reform Michigan’s no-fault insurance system by creating a fraud authority to “investigate and root out fraud” and by developing “more equitable” medical fees.
- Keep jobs and businesses in Michigan by keeping “taxes and regulations under control - they are very burdensome to small businesses.”
- Cut the personal income tax from 4.25 percent to 3.9 percent.
- Quote: “One advantage of running for governor as a political outsider is that I am not bound by any obligations to lobbyists or bureaucrats.”
- Eliminate Democratic Gov. Jennifer Granholm’s income tax hike. That refers to legislation passed in 2007 under Granholm to raise the income tax from 3.9 percent to 4.35 percent, with the expectation it would be rolled back to 3.9 percent over a period of years. It now stands at 4.25 percent.
- Reform auto insurance, saying “everybody has to give up a little bit to make it better for everyone.”
- Establish a skilled trade career training plan that, among other proposals, would “redirect existing state resources toward vocational education and the advanced teacher training necessary to make our programs cutting-edge and the best in the nation.”
- Quote: “I’m a fighter with the guts and the vision to write our next chapter.”
- Lower annual state revenue allowed under the Headlee Amendment – approved by voters in 1978 – from 9.49 percent of all personal income to 8.55 percent.
- Eliminate the Michigan Strategic Fund, which has broad authority to create economic development. In May, for example, it approved more than $600 million in tax incentives for $2 billion in proposed Detroit development projects.
- Back expansion of renewable energy, in part by allowing residential producers to write off renewable investments “like any business.”
- Support marijuana legalization but divert no more than 20 percent of revenue from its taxation. The remainder of revenue should “go directly back to taxpayers in the form of an equalized tax credit.” (The legalization proposal on the November ballot would send 35 percent of revenues to K-12 education, 35 percent to roads, 15 percent to communities that allow marijuana businesses and 15 percent to counties where marijuana business are located.)
- Quote: “Government should not be subsidizing businesses. Period.”
- Eliminate the personal income tax, eliminate tax on retiree pensions, reduce property tax.
- Abolish the Michigan Public Service Commission and end “all rate regulation in these industries.”
- Eliminate no-fault insurance “and allow people to shop for auto insurance without mandating it.”
- Eliminate electric “smart meters,” which give utilities real-time data on customer electricity use. Tatar warns of health dangers and possible surveillance risks to consumers.
- Quote: “My attitude is that the State of Michigan has way too much money.”