Does anyone running for governor have a new idea? We asked the candidates

Paul Egan | Detroit Free Press

LANSING — Create a state-operated Internet service provider.

Appoint a school reading czar.

Use corporate-sponsored videos in social studies classes to try to steer students into high-vacancy jobs.

Those were among the responses received when the Free Press asked the seven major-party candidates for governor to each step up with just one new idea to address a Michigan problem — large or small — along with how to pay for it.

Other ideas? Eliminate the state income tax. Shake up the Michigan Department of Transportation to reflect a new emphasis on self-driving vehicles and borrow up to $20 billion to fix roads and other crumbling infrastructure. Transform welfare programs into jobs programs. Spend more than $3.6 billion on a raft of programs to draw more women into the workforce.

With just one month to go before the Aug. 7 primary, four Republicans and three Democrats are fighting for voters' attention and the chance to succeed Republican Gov. Rick Snyder, who, after eight years in office, can't run again because of term limits. It's largely a battle of campaign resources and TV ads, but ideas still matter.

Below are the candidates' answers to the "One New Idea" challenge, condensed and summarized, but mostly as outlined by the candidates themselves.

The Free Press did some rudimentary vetting in cases where a candidate stated something that was factually inaccurate or where the numbers did not add up.

Candidate: Lt. Gov. Brian Calley

Party: Republican

Idea: Transform welfare programs to make them "a springboard to employment."

Issue addressed: A worker shortage and too many people dependent on social services.

"No one grows up dreaming about a life on welfare," Calley said. "And yet, that is still the outcome for too many people."

How implemented: Calley said much of his plan could be accomplished through reorganization and partnerships among existing agencies such as the Department of Health and Human Services and the Department of Talent and Economic Development.

However, some state legislation and federal approvals would be needed for changes in the way social services money is spent and to allow it to be discontinued gradually, he said.

From day one on social assistance, there will be an expectation of work, Calley said.

The application process, he said, will be transformed into an evaluation of why the person needs assistance in the first place, and the job of state officials will be to help develop individualized plans to remove barriers to employment, including the use of internships and apprenticeships through partnerships with businesses, with entry-level jobs used a a stepping stone to bigger things. Some plans will be short-term, others long-term, but all would require work during the process.

The state would also work to obtain federal waivers to allow recipients to be gradually phased off all social service programs, rather than be cut off abruptly, as generally happens under current law with many social programs.

Estimated cost: Calley estimates no significant startup cost because existing social service funds would be repurposed.

How paid for: Over time, Calley believes there will be cost savings as people move off social assistance.

Candidate: Sen. Patrick Colbeck

Party: Republican

Idea: Repeal the state's 4.25% personal income tax.

Issue addressed: Increase state's competitiveness, spur growth.

How implemented: Would require approval from the Legislature.

Reducing state revenues by $10 billion is not so challenging, says Colbeck, considering total Michigan revenues have increased by a similar amount since 2010, primarily as a result of economic growth.

About 72% of personal income tax revenues go to the state's main checking account, called the general fund, which pays for policing, prisons and most other state services. Colbeck said he would gradually eliminate the income tax as the state meets benchmarks related to spending cuts and growth in the economy.

"The fastest growing states are Tennessee, Florida, and Texas because these states have 0% income tax and 7% sales tax," said Colbeck. Once his idea is implemented, "Michigan would be a 0% income tax and 6% sales tax state."

Estimated cost: $10 billion.

How paid for: Reduce $18 billion Medicaid budget by at least 20 percent, yielding $3.6 billion toward the target. Eliminate $1 billion in "targeted subsidy slush funds known as the Michigan Economic Development Corp. and the Michigan Strategic Fund." Colbeck estimates $1.9 billion would be achieved through economic growth and $1 billion through elimination of sales tax fraud. He didn't specify where the rest would come from.

Fact check: Asked for a citation for the claim that the fastest growing states are Tennessee, Florida and Texas, Colbeck spokeswoman AnneMarie Schieber Dykstrapointed to U.S. Census figures that show the fastest-growing states from 2016 to 2017, measured by percentage population growth, were Idaho, Nevada, and Utah. Dykstra said Colbeck's proposal should have said that Tennessee, Florida and Texas were "among the fastest-growing states."

Using the same measure, Florida ranked fifth for growth, Texas ranked seventh and Tennessee ranked 14th. Florida has a 6% sales tax, not 7%, and Florida, Tennessee and Texas each allow local governments to add a local sales tax.

Of the three fastest-growing states, Idaho has a top income tax rate of 7.4% and a 6% sales tax, Nevada has no income tax and a 6.85% sales tax, and Utah has a 5% state income tax and a 5.95% sales tax. Each of the three states also allow for a local sales tax.

More: 14 candidates aiming to replace Rick Snyder as Michigan governor

More: What lies in Michigan's future? Governor candidates debate big issues

Even when looked at over a longer time period or by using gross population growth — rather than percentage population growth — as the measure, some states among the three fastest-growing have income tax rates higher than Michigan's, records show.

On recovering lost revenue, personal income tax revenue primarily impacts the general fund, but many of the cuts and savings identified by Colbeck primarily impact other funds, such as the School Aid Fund, or include cuts to federal matching dollars. As a result, the savings he identifies don't come close to replacing lost income tax revenue on a dollar-for-dollar basis.

In 2016, for example, Michigan Medicaid expenditures were about $17 billion, but only about $2 billion of that came from the general fund and much of the total was federal money.

Colbeck said his plan to replace lost revenue is conceptual and could include legislative changes to remove restrictions on how certain funds are spent. "All of this is fungible," he said, especially when there is strong public support for reducing taxes.

Candidate: Dr. Abdul El-Sayed

Party: Democrat

Idea: Create a state-operated Internet service provider, called Mi-Fi.

Issue addressed: Improves limited access to affordable and reliable high-speed Internet service for many Michiganders, especially in rural areas.

How implemented: El-Sayed said Michigan is one of 20 states with laws restricting the development and expansion of publicly owned broadband networks, to avoid government competition with the private sector, and his administration would work to amend those laws.

He would establish a Michigan Internet Office to coordinate state investments in broadband projects, secure funding for broadband initiatives, and oversee mapping and planning.

El-Sayed said he would next establish a commission to build on the work of the Michigan Commission of Advanced Networks, initiated under Gov. Rick Snyder to increase broadband access.

"We will create a plan that outlines how we can both fully connect Michigan through municipally owned and community-owned broadband networks and contain costs by leveraging public resources," through steps such as regional collaboration and partnering with locally owned utilities, he said.

His administration would work to develop publicly owned broadband networks at the local levels, particularly in underserved communities, he said. And it will mandate that at least 75 percent of state-financed broadband infrastructure is fiber network, which El-Sayed said is the fastest and most durable form of Internet and the most adaptable to future improvements in technology.

Estimated cost: El-Sayed endorses the estimates for state funding for broadband infrastructure found in Snyder's 21st Century Infrastructure Commission report, but rejects the proposal that $1.5 billion be spent on subsidies to private companies, so they will serve rural areas.

How paid for: El-Sayed would use $1.5 billion over 25 years from his proposed Pure Michigan Infrastructure Bank, which would use new property taxes, bonding, revenues raised from the proposed legalization of recreational marijuana, and the state's general fund to raise billions for needed improvements in Michigan, spokesman Adam Joseph said.

The $1.5 billion the bank would specifically need for broadband expansion would be paid from the general fund at $60 million per year, with some of that money eventually offset from revenues the state would earn as an Internet service provider, Joseph said.

Candidate: Dr. Jim Hines

Party: Republican

Idea: Use school social studies lessons to promote economic development.

Issue addressed: A lack of skilled workers to fill available jobs.

How implemented: Use videos produced for history classes to point children in the right direction to meet employer needs.

The local chamber of commerce and other local leaders in cities or counties would produce videos and provide them to schools to use as they see fit.

Students "need the inspiration and motivation to become the economic development engines they can be," Hines said. "They don't yet understand how they can make a difference. The story of their local history can give them a vision for that."

Hines said local history "can teach pride of place, the importance of entrepreneurship, character, values, innovation, and community support," and "it is important for students to see what has changed, what were the causes and effects of change, and how local folks adapted."

He said Michigan has thousands of skilled jobs that can't be filled and "a local history can be designed to point our kids in the right direction and challenge them to straighten up and fly right with intentionality and purpose."

Hines said he is involved in producing a video about the history of Saginaw County that could be used as a template for Michigan's 82 other counties.

Estimated cost: About $30,000 per county, or up to $2.5 million for the entire state.

How paid for: Corporate sponsors.

Candidate: Attorney General Bill Schuette

Party: Republican

Idea: A cabinet-level literacy director, reporting to the governor.

Issue addressed: Improve poor reading scores for Michigan students.

How implemented: Schuette said he would create the position by gubernatorial appointment and possibly use an executive order to move functions from the Department of Education.

He would also place reading coaches in every elementary school, provide individual support for students, cut unspecified red tape so schools can focus on teaching literacy, prioritize local control, reward schools that improve reading scores, fund scholarships for low-income students to access reading camps and tutoring, work with businesses and charitable groups to provide funds and volunteers, hold an annual Michigan Book Festival to promote a statewide culture of reading, and engage colleges and universities to make reading instruction a priority.

"Our reading scores are some of the lowest in the country, which is not only outrageous and embarrassing, but also dangerous for our students and for Michigan's economic success," Schuette said.

Estimated cost: The cost "could be negligible," depending on what currently unfilled positions could be used and/or how current staff could be re-assigned, Schuette said.

How paid for: If necessary, a combination of money from the general fund, School Aid Fund, federal grants, and possibly business and charitable contributions, he said.

Candidate: Shri Thanedar

Party: Democrat

Idea: A four-point plan to help mothers and other women enter or re-enter the workforce.

Issue addressed: Participation by women in Michigan's labor force is low relative to other states and has declined since 2004.

Participation fell from 58.9 percent in 2004 to 57.6 percent in 2015, ranking Michigan 37th nationally, records show.

How implemented: Universal affordable child care through subsidies to low-income families, universal pre-kindergarten for 3-4 year-olds, a paid family leave plan and a $15-per-hour minimum wage by 2025.

Legislation would be required. Also, moving to a progressive personal income tax, which Thanedar proposes as one of the ways he would pay for the program, would require an amendment to the state constitution.

Thanedar said his plan would make "child care and early education free for all families while opening the door to livable wages for working families."

Estimated cost: Based on documents provided by Thanedar, the plan would cost about $3.6 billion a year, though it was not clear whether that figure includes the cost of the paid family leave plan, which he said would be funded by employers.

Thanedar estimates the cost of the child care plan at $3.45 billion and the cost of the pre-kindergarten program at $495 million per year. The cost of the family leave plan was not separately identified. He said increasing the minimum wage to $12 by 2022 and to $15 by 2025 would have no cost to the state.

How paid for: Thanedar proposes $3.6 billion in new revenues, comprised of tax increases to corporations and to individuals who earn more than $200,000 per year, along with cuts to some corporate economic development grants. But he also proposes eliminating the personal income tax for those earning less than $50,000 a year and did not respond to emailed questions asking how much that tax cut would cost.

He said the paid family leave plan, which would require employers to pay 12 weeks of leave at a minimum of 50 percent of the regular wage, capped at the average Michigan wage, would be paid for through a payroll tax of 0.126 percent.

Thanedar said he would increase Michigan's corporate income tax to 10 percent from 6 percent for "qualifying corporations or entities with $1 million in gross receipts." He would increase the rate to 7.5 percent for qualifying corporations with at least $350,000 in gross receipts.

On the personal income tax, Thanedar would increase the rate from 4.25 percent to 8.85 percent for people earning more than $200,000 per year, and increase the rate to 10 percent for people earning more than $1 million per year.

Fact check: Thanedar did not respond to requests for a breakdown of how much each of his proposed tax increases would raise, but it appears he would expect to collect at least $2 billion in additional income through increases to the corporate income tax.

The corporate income tax is currently applied to the net income "C" corporations — ones with stockholders — which make up less than one-third of Michigan businesses. Corporate income tax revenues are currently projected at less than $1 billion a year, so barring a dramatic increase in net income for Michigan corporations, the 6 percent rate would have to triple for Thanedar to raise an extra $2 billion. Alternatively, Thanedar could expand the types of businesses that have to pay the tax or apply the tax to gross receipts, instead of net income. He did not respond to emailed questions about those specifics.

Candidate: Gretchen Whitmer

Party: Democrat

Idea: A state Department of Mobility and Connectivity

Issue addressed: Improve Michigan's competitiveness on self-driving vehicles, improve roads, expand access to broadband.

How implemented: Would issue an executive order to reorganize and restructure the Michigan Department of Transportation as the Department of Mobility and Connectivity. Voter approval of a bond could be necessary for infrastructure improvements.

"The department will oversee the work of fixing our roads using high-quality materials and mix so we get the job done right" and design a regulatory environment that will make Michigan "the place to design, build, test and showcase autonomous vehicles."

Estimated cost: Restructuring and reorganizing MDOT would involve "minimal" cost; infrastructure repair plan would cost $3 billion a year.

How paid for: The MDOT reorganization would come from existing funds. Whitmer would ask the Legislature to approve measures such as user fees to fix the roads, but if those measures were not approved, she would ask voters to pass a bond of up to $20 billion, paid for by eliminating "corporate tax giveaways" and by reducing deposits to the state's Rainy Day Fund, which now has a balance of close to $1 billion.

"We would only go to the ballot if the Legislature doesn't act on user fees," Whitmer spokesman Zack Pohl said.

"This is a 10-year, $30 billion plan. The plan is to generate $2 billion annually in state revenue — either through user fees or bonding — to draw down $1 billion annually in additional federal dollars.

"So out of the $30 billion spread out over 10 years, $20 billion of it will come from the state and $10 billion will come from the federal government."

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.