Bolger's re-election effort gets fouls from Truth Squad

MICHIGAN TRUTH SQUAD ANALYSIS: House 63

Who: Bill Farmer campaign, Jase Bolger campaign, Michigan Democratic Party

What: TV, radio ads

Truth Squad call: Fouls on Bolger TV and radio ads; No Fouls on other materials

Farmer ad ‘Power’

The 30-second television advertisement from Democratic candidate Bill Farmer slams House Speaker Jase Bolger for his role in a plan to have Rep. Roy Schmidt of Grand Rapids change from a Democrat to a Republican right at the filing deadline for the House and have a straw candidate file as a Democrat to inhibit that party’s ability to field a write-in candidate.

Questionable statement: "Papers have called him sleazy and conniving."

The narrator makes the statement while copies of the articles to which it refers are displayed in the background. So there is no question the papers did write what the ad quotes.

But the quotes are note entirely used in context.

Stephen Henderson, in a column in the Detroit Free Press, wrote of the plan by Bolger and Rep. Roy Schmidt to have Schmidt change parties at the last minute, "It's real sleazy stuff -- Nixonian, really, although lacking the, ahem, sophistication." He did not actually call Bolger "sleazy."

He also said not all the fault lays with Bolger and Schmidt:

"But Bolger and Schmidt aren't the entire issue here. The law is, and it's something that ought to be tightened. Think of how often we see fake candidates put onto ballots to confuse voters. And if you believe that some of those frauds don't involve the exchange of money, well, you probably believe every politician's promises."

Bolger has acknowledged that the current law gives too much flexibility for candidates to change parties and has supported legislation that would put limits on the ability to change parties or would provide the opposing party more opportunity to field a candidate.

Questionable statement: "He has shown a reckless disregard for the responsibilities of his office and a disappointing lack of respect for voters."

The ad correctly quotes this editorial in the Kalamazoo Gazette. The item ends: "Jase Bolger has shown a reckless disregard for the responsibilities of his office and in doing so, shown a disappointing lack of respect for voters in his district and across the state."

The editorial acknowledges the Republican leanings of the district, but urges voters to consider voting for Farmer.

"Bolger’s recent attempt to deceive the public and undermine the legitimacy of the electoral process in Rep. Roy Schmidt’s race in the Grand Rapids area reveals a serious lack of judgment and ethical standards," the editorial said higher up.

Questionable statement: "Bolger is the subject of a grand jury investigation."

This is true. The Ingham Circuit Court, at the request of Democrats, has launched a one-person grand jury investigation into the party switch incident.

Questionable statement: "The Kent County prosecutor said he ‘tried to undermine the very fabric of our country.’"

The Kent County Prosecutor Bill Forsyth did issue a scathing assessment http://www.gongwer.com/public/Schmidt.pdf of Bolger’s and Schmidt’s actions.

But he also found the two did not commit any chargeable offenses in what they did.

Part of the impetus for the Ingham Circuit Court’s grand jury investigation was the Kent County prosecutor closed his investigation before the Michigan State Police had gathered all the evidence officers were seeking.

Foul or no foul: No foul.

Bolger’s involvement in the Schmidt party switch has caused him no end of problems – and plenty of criticism.

Michigan Democratic Party ad ‘Bolger’s Agenda’

This 30-second TV ad also slams Bolger for the party-switch plan, as well as for recent tax law changes that eliminated most of the state’s income tax credits and eliminated the Michigan Business Tax in favor of a corporate income tax designed to bring in less money from business taxes.

Questionable statement: "The stories are shocking. Speaker Bolger caught trying to rig an election."

Bolger and Schmidt did work out a plan for Schmidt to change parties right at the filing deadline and to have a candidate file as a Democrat to make it more difficult to run a write-in campaign to replace him.

But there is still some question how much Bolger was involved with the replacement candidate plan and how much of that was on Schmidt.

Questionable statement: "And the only thing worse is what Bolger’s been up to in Lansing. $1.4 billion in new taxes on middle-class families. $1 billion slashed from Michigan schools."

The tax changes enacted last year, primarily in PA 38 of 2011, is projected to bring in $1.42 million more from the income tax because of the elimination of various credits and a freeze on previously scheduled reductions in the rate.

But the change does not exclusively affect those with middle class incomes. The credits were eliminated across the board, as were the rate changes.

The budget for schools was cut by about $1 billion for the 2011-12 budget (PA 62 of 2011 as part of the effort to balance that budget, much of that through a $170 per pupil cut in the foundation grant. The current year budget (PA 201 of 2012 restored $120 per pupil of that, though the overall replacement for education was $200.52 million.

Questionable statement: "All to pay for a $1.8 billion tax break for corporate special interests."

The tax changes in PA 38 included elimination of the Michigan Business Tax in favor of a 6 percent corporate income tax. That change would mean more or less than a $1.8 billion cut depending on which fiscal years are considered. For the current fiscal year, as was the number provided for the personal income tax changes, the new corporate tax is projected to reduce revenue by $1.65 billion. But the change also cut $1.09 billion last fiscal year.

The actual effect of the change is still somewhat undetermined because a number of companies have taken advantage of provisions that allowed them to remain under the MBT to continue taking advantage of credits they had under that tax.

Foul or no foul: No foul.

Since January 2011, Gov. Rick Snyder and the Republican-led Legislature have advanced a two-prong strategy to reduce the tax burden on the business community and contain spending.

Bolger radio ad

The radio ad features a couple discussing the election and the two candidates, favoring Bolger as the candidate to support and pointing out Democrat Bill Farmer’s flaws.

Questionable statement: "I saw him on public TV. He said we should triple our taxes and government needs to spend more."

On a video interview on MIVote.org, a site run by Detroit Public Television, Farmer compared current tax distribution, indicating corporations and the wealthy are paying smaller portions of the overall tax burden.

In his statement, he does mention a federal taxation rate of 91 cents on each dollar earned above the $100,000 level in "1940." He then shifts to comments about the share of tax burden paid by corporations and the wealthy, specifically saying that for every $1.50 in tax revenue in the 1950s, 50 cents came from the wealthy and corporations, compared to 25 cents of every $1 in tax burden from the wealthy and corporations today.

"What that represents is literally billions, tens of billions of dollars that has been sucked out of the public economy into the private economy," he said.

He asserts in the video that increasing state tax revenue would improve the economy. He did not, however, endorse a specific rate of taxation, either for individuals or businesses.

Farmer said on his website he would work to reinstate tax credits for retirement earnings, but that does not indicate how he would triple "our" taxes.

He also said on his website he would increase spending on education, at least replacing the funds that had been cut over the last few budget years.

Questionable statement: "Remember the last decade: tax hikes, jobs losses, our kids leaving the state for work. Bill Farmer would take us back there."

All of the things mentioned in the ad did happen over the last decade. Job losses, and state revenue losses actually began about 2000 under former Gov. John Engler. The state did increase the income tax to 4.4 percent in 2007 as part of the work to balance the 2007-08 budget, but that included plans to reduce the tax back to 3.9 percent. Gov. Rick Snyder, as part of his tax changes last year, halted the rate reduction at 4.25 percent.

The current decade also has seen tax increases, with elimination of a variety of income tax credits last year, most effective for the 2012 tax year.

The state did vie for highest unemployment rate for much of the decade. But unemployment began dropping before the most recent tax changes designed to improve the job climate. And it actually climbed again this summer, beginning to fall again only in the last two months.

Michigan also has, for much of the last decade, led the nation in out-migration, according to United Van Lines studies, backed up by the most recent census data that showed Michigan was one of only two states to lose population over the last decade.

But, while leaders of both parties have made a variety of efforts through tax policy and other means to attract and develop business in the state, many economists have argued Michigan’s economic struggles were tied to national slowdowns, magnified by the state’s reliance on the auto industry.

Farmer has said he opposes the elimination of the credit for retirees as well as the shift of tax burden to individuals from business. He said on his website that restoring the credits would boost the economy by providing people money to spend at local businesses.

Questionable statement: "Bolger’s our kind of leader. Making the tough decisions. Republicans Bolger and Rick Snyder are working together to balance the budget and cut the debt."

Snyder and legislative Republicans have balanced the budget, but so have every Legislature and governor. The Michigan Constitution requires it. They did manage to have the budget completed sooner than had been done in decades and did put money in the budget stabilization, or rainy day, fund.

The budgets did eliminate debt in that they again prefunded health care for state retirees, reducing money the state would have had to pay in the future for those benefits. They did not pay ahead any of the state’s bonded debt.

Questionable statement: "I saw in the paper that local small businesses are adding jobs again. More than 100,000 statewide."

According to the U.S. Bureau of Labor Statistics, Michigan has added about 100,000 jobs since employment bottomed out in the last quarter of 2009. But about half of that job growth happened during 2010, before Bolger became speaker.

The BLS showed that employment has been growing across economic sectors. So not all of those 100,000 jobs came from local small businesses.

Foul or no foul: Foul. The ad doesn’t provide evidence that Farmer wants to "triple" taxes. The video in question shows a candidate who wants more tax revenue, but also one who doesn't give a specific increase.

Bolger TV ad

The TV ad argues that Bolger is being unfairly attacked for policy changes meant to improve the state’s economy and bring public employee pay and benefits in line with the private sector.

Questionable statement: "Why are liberal Democrats and government unions attacking Jase Bolger? Jase is taking on special interests. Jase Bolger cut taxes, cut wasteful spending, brought government employee benefits in line with hard-working taxpayers. Bolger is fighting special interests and government unions are mad their special deals are ending."

The tax changes the state made in 2011 did cut taxes overall, but the cuts went to businesses. Many individuals will see their taxes increase for 2012 with the loss of a number of tax credits despite a tax rate cut.

The 2011-12 budget did see cuts to a number of programs. But budgets have seen general fund cuts particularly for the past decade as the state’s economy foundered and state revenues dropped. As revenues were projected to increase for the current fiscal year, spending for some of those programs saw increases.

On eliminating wasteful spending, the recent tax changes did include elimination of a number of economic development programs driven by tax credits. But some of those programs, like the film incentive, were replaced with grant programs.

The state also has put limits on how much local governments and school districts can contribute toward their employee benefits (PA 512 of 2011). New school employees also have moved to a hybrid defined benefit/defined contribution retirement benefit (PA 300 of 2012). Republicans had argued that contracts where local government and school employees did not contribute toward health care and retirement were out of step with private sector benefits.

State employees have been on a defined contribution plan for more than a decade.

Particularly education unions have argued that the benefit packages they have under their contracts are warranted because they have given up wages to keep them.

Questionable statement: "Democrat Bill Farmer’s idea of reform: triple our taxes to spend more money."

In the MIVote.org video, Farmer gave a brief review of taxation levels and tax burdens, including a specific reference to a 91 percent federal tax rate for each $1 made beyond $100,000 a year. It's clear from the video that Farmer favors more tax revenue; however, he does not specify an increase for individuals or businesses.

Foul or no foul: Foul. As with the radio ad above, this ad asserts that Farmer’s plan is to triple taxes – without providing evidence to make that case. Farmer certainly favors more tax revenue, but the ad assigns a specific increase it can't back up.

The Center for Michigan (the parent company of Bridge Magazine and the Michigan Truth Squad) has been financially supported by a wide range of corporate and foundation supporters. We are grateful to all funders for helping us create and grow a new nonprofit journalism service for Michigan citizens. Those funders have absolutely no role in the editorial decisions of the Michigan Truth Squad or Bridge Magazine.