Marty Knollenberg, Chuck Moss, Rocky Raczkowski, Ethan Baker and Al Gui face off
To say the race for Michigan’s 13th Senate seat is crowded would be an understatement. The Republican primary includes three former state representatives and two newcomers who say they are in it to win it.
The 13th is currently held by the term-limited Sen. John Pappageorge, R-Troy. The district is within Oakland County and includes the cities of Berkley, Birmingham, Bloomfield Hills, Clawson, Rochester, Rochester Hills, Royal Oak and Troy. It has a 54 percent Republican base, based on turnout averaged from the 2008 and 2010 elections.
Capitol Confidential focused on three issues that will likely be important in the coming years. The candidates were asked whether they would vote to shift new teachers off of the underfunded teacher pension system, whether they support special tax credits and subsidies for select companies (especially relating to the $50 million film subsidy), and whether they would vote to repeal the state law mandating higher construction costs on government projects.
Each of the candidates except Gui and Moss said they would vote to shift new school employees to 401(k)-type account. State employees, beginning in 1997, now receive defined-contribution retirement plans like the bulk of the private sector; teachers do not.
Moss was in the Legislature in 2012 when the State House killed a bill that would have begun shifting new teachers. The legislation eventually did, however, make significant changes to other post-employment benefits (OPEB), which were mostly underfunded health care costs. But it left teachers in the current system.
He argued that shifting from a defined-benefit to a defined-contribution plan required too many “transition costs” and the state needs to fund liabilities as they come up.
“Instead of continuing a legal Ponzi scheme, with current beneficiaries paid for by current active workers (or worse, beneficiaries paid with general tax revenue), you need to put an actuarially approved amount aside right away,” Moss said. “This is extremely expensive up front, because addressing this problem was put off for years. By keeping the plan open you avoid having to make those high cost initial payments. The trick is not to incur more liability down the road. Obviously, defined-benefit systems are unaffordable … 401(k) or Health Savings Accounts are clearly the way to go. The issue is getting out from under the current debt overhang without breaking our fragile government units with upfront costs."
Raczkowski and Knollenberg were more succinct.
“I would have also supported this to be part of any vote on the Detroit 'Grand Bargain,’” Raczkowski said. “This is one of the issues that have added to the bankruptcy of our largest Michigan cities, and this issue must be dealt with, otherwise it will lead to more issues with financial emergencies amongst our public sector local governments.”
“Given the huge burdens that pension systems cause and that it is unsustainable, actuarially very difficult to predict future costs and has been ripe for governmental units not making proper contributions, I believe that government needs to get out of the pension business,” Knollenberg said. “Oakland County, one of the most successfully run counties in the state, got out of the pension business years ago.”
Baker said he does not want to “punish” teachers, but pension systems are “no longer feasible.”
In Michigan, the Michigan Economic Development Corp. (MEDC) hands out about $300 million annually in select subsidies while having the reputation of lacking transparency. In the past, former representatives Moss, Knollenberg and Raczkowski have supported select subsidy and tax credit deals. Each now says they support reforms or ending the program.
Raczkowski said the approved credits should be honored but once they are done, the state “should let all of these credits expire and focus on a statewide policy of lowering taxes for all businesses, and not just a select few. “
Knollenberg said: “Government shouldn’t be in the business of picking winners and losers and given their track record, we need to do away with subsidies and tax credits as they expire. In addition, it is simply unfair that the 'elite' benefit at the expense of taxpayers and the little guy.”
Moss: “State subsidies and tax credits are a dangerous game — we see in Washington how ‘crony capitalism’ now corrupts our political system and economy. If Michigan made agreements to businesses in the past, those agreements should be honored — but no new ones made.”
Baker said the $300 million currently appropriated should be used to incentivize all businesses — large and small — with a lower, flatter tax system.
“We need our taxes low, our regulations minimal, and with the right business climate that treats everyone equally and fairly, Michigan businesses will thrive,” he added.
Gui said these types of programs “lead to a lack of a code of conduct which translates to shadowy contracts and money mismanagement.”
While Moss and Knollenberg voted for the original film subsidy program, they have had a change of heart. Each candidate derided the incentive, which has spent $450 million in taxpayer funds with no uptick in jobs.
Gui said the subsidies were “unfair and discriminatory.”
Raczkowski said the program should pay out what is promised and then end.
Moss wants the industry to “stand on its own two feet.”
Knollenberg said the program should be phased out and added, “I don’t support incentives of any kind.”
Baker called it “picking winners and losers."
The candidates were also in agreement over ending the state’s prevailing wage law, which mandates union-scale wages on public construction projects. This costs taxpayers hundreds of millions of dollars each year.
“I believe prevailing wage should have been repealed in 2012, when right-to-work was passed,” Moss said. “I proudly voted for right-to-work, and would have happily voted to repeal prevailing wage at the same time. That way the [protesting] mob could have saved on gasoline and travel expenses.”
Baker: “The prevailing wage law should absolutely be repealed! It will save Michigan taxpayers $400 million a year. Repeal it.”
Capitol Confidential also allows the candidates a “chance to answer like a politician” question where those running are able to say why they are the best choice for office. Here is how they responded:
I am the only candidates that went to public school in the district and have owned a home in the district (25 years) and have owned a business in the district (26 years). Because of these ties, I best understand the community’s needs. I introduced legislation that eliminated lifetime healthcare for legislators which is now law. I voted to reduce my pay 10 percent which is now law. I introduced legislation that prohibits lawmakers from using their campaign funds for criminal defense purposes which is now law (this was in response to Kwame Kilpatrick’s abuses). I introduced legislation that would dock legislator pay if they don’t show up for work. I introduced the House version of right-to-work. I am the only candidate that has an actual plan to fix our roads without raising taxes. It is easy for candidates to say that they want to fix our roads without raising taxes, but quite another when they have no plan.
A candidate should be judged by their actions, and not by their political slogans. A candidate's history speaks volumes. I do not believe that the only way someone can serve their community, state and nation, is in public office. That is why I enlisted in the U.S. Army, and was later commissioned as an Officer in the Infantry. I serve on many charitable boards and my wife and I are committed to the tenants of what made our nation great. Of all the candidates running for the State Senate, I am the only one who has served in the military, in political office and in business. As a conservative, I am steadfast and will challenge our governor when he is wrong. Also, I have led by example and believe that is the greatest tenant of leadership there is.
I believe I'd be a better Senator because of my budget and Appropriation experience. As Chairman of Appropriations I helped work to fix the fiscal damage of the Granholm years and get our financial house in order, and I'm the best candidate to keep us moving on the right road. A right-sized government is one that lives within its means, and a prosperous state needs a government that doesn't strangle enterprise.
I’m the best person for Michigan’s 13th State Senate seat because our citizens are looking for new blood and a fresh perspective in Lansing because they are tired of career politicians. I would bring to the Senate the experience I have working for President Reagan and what I learned from him about building relationships to accomplish big goals. Combining my Reagan experience with my perspective as a citizen-politician with a young family, I know that I would be a successful Senator for the 13th District. Further, I believe I am the best Republican to go head to head with Ryan Fishman, should he indeed be the Democrat nominee. Mr. Fishman’s perceived strength is that he is running as a new voice in government and I would be able to counterbalance that in a way that none of my opponents would be able to. If the electorate truly is tired of career politicians, then we Republicans need a nominee who is not a career politician, someone with new ideas and a fresh perspective. I am that choice.
Editor's note: Michigan Capitol Confidential will be reporting and writing about key primary races leading up to the election on Aug. 5. The series of stories are designed to provide readers with some insight into candidates who have said they support free market issues. The stories are not endorsements and readers are encouraged to give every candidate a serious look before the election.