Sen. Patrick Colbeck Talks State Government

The original interview was conducted in Lansing on Feb. 28, 2018.

EVAN CARTER: Hi there, my name is Evan Carter, I’m a reporter with Michigan Capitol Confidential. Today I’m joined by Republican gubernatorial candidate Patrick Colbeck. Sen. Colbeck, thank you for being with us today.

PATRICK COLBECK: It’s great to be with you, Evan.

CARTER: So first, help us get to know you, Mr. Colbeck. What brought you to Michigan and what do you like most about this state?

COLBECK: Well, technically what brought me to Michigan was my mom and dad, ‘cause that’s where I was born. And I was born out in Dearborn, Michigan, out of Oakwood Hospital. But I will admit that when I graduated from the University of Michigan with aerospace engineering degrees, I wanted to go off and work on the space program and Michigan wasn’t exactly ground zero of the space program, so I went to Huntsville, Alabama, and worked there for a few years after I graduated. But it’s good to be back here now. I actually went to — after I got married, my wife and I had lived in Florida for about a year, but we came back here for her job, and it’s just good to be back with family. A lot of the initiatives I have been pushing at the state of Michigan have been focused on, you know, stemming that tide of exodus from our state, and bringing people back here, ‘cause wherever I go outside of the state, I was working with Michigan graduates, and so now it’s time to go off and promote a state where we can keep ‘em here.

CARTER: So, on the policy side of things, last year the state passed two large economic development packages, giving specific businesses select tax breaks –

COLBECK: Yep.

CARTER: — and for a number of years, the state has done the same thing—

COLBECK: Yep.

CARTER: — it’s cost about a billion dollars annually from the state’s general fund. Is this a good plan, or is this a bad one?

COLBECK: Bad plan. It’s crony capitalism at its worse. Essentially the state has deemed it upon itself to play venture capitalist with taxpayer money to the tune of about a billion dollars. It’s about halfway split between MEDC and Michigan Strategic Fund. I think that’s the wrong way of doing it. I propose broad-base tax incentives that honor Article I, Section I of the Michigan Constitution, which means that our policies are meant for the equal benefit of all of our citizens.

Right now, with these venture capitalist approach to economic development, like the ones you mentioned, the only people that get the deals are the ones with the ears of the power brokers up in Lansing, and you got to scream pretty loud in order to get those. I think that it’s turned into more of an “old friends and family discount” than something that benefits all the citizens of Michigan. It’s something that I’m vehemently opposed to.

CARTER: Okay, and if you were given a bill that lowered Michigan’s income tax rate back down to 3.9 percent as governor, would you sign it?

COLBECK: Yeah, why stop there? I mean, I’ve actually got a plan, a practical milestone based plan, to take it all the way down to 0 percent. And, this down to 3.9 percent, it would be 0.3 percent decrease on it, and I think there’s a huge opportunity, especially when you look at where the real job growth engines are in states, it’s at the small business level. Most of them are passed through entities.

You eliminate the state personal income tax, not only do you eliminate that paperwork, you eliminate things like the senior pension tax, but you also create an economic development incentive.

Businesses thrive when you lower the total cost of doing business. One of the major costs for businesses is the cost of government, and we can get into some of the other costs here down the road here, but health care is another one and energy is another one, and if you can lower all three of those costs, you actually create an economic development incentive package that’s not picking winners and losers; that applies to everybody equally. And the best part about that approach to economic development is that it also benefits our families, which is somebody that sometimes doesn’t seem to get their voice heard very well up in Lansing.

CARTER: Well, briefly explain to us where you’d get the revenue to do that, because last time I checked a lot of the income tax revenue goes to general fund —

COLBECK: Yep.

CARTER: — and people are wondering, is there enough general fund revenue to even cut below our current income tax rate. Where would you get that revenue?

COLBECK: Well, it’s about a $9.7 billion hole, for net income, and so what I’ve done, if you go to colbeckforgovernor.com, I’ve laid out the solution, also Detroit News, I penned an op-ed that they published as well.

And you start off with looking at the single largest line item in the Michigan budget, and that’s Medicaid. That’s coming in at $18 billion out of our $56.6 billion, probably about now $57.3 after supplemental, that’s a very large budget. I’ve deployed, and Mackinac has actually covered, several of my free-market health care solutions, particularly around direct primary care. I’ve got a pilot going on in Medicaid right now for Medicaid enrollment; it’s to get access to primary care services via something called a direct primary care service delivery model. Well, it’s been demonstrated that when you apply this to providing care around primary care, you still need the catastrophic care, but for primary care, what it does is provide better preventive care, and lowers the overall cost of healthcare by over 20 percent. Twenty percent off of an $18 billion line item is $3.6 billion. Now, all of the sudden, you’ve gone from $9.7 billion down to $6.1 billion.

Now you can go off and start looking at the next biggest item. You already talked about it. That was the Michigan Economic Development Corporation and Michigan Strategic Fund. That’s another billion dollars you can take off the top once you’re pursuing broad-base economic development incentive. So now you’re already down to $5.1 billion.

There’s sales tax fraud that’s going on in our state right now through use of devices called zappers. My former colleague Sen. Pappageorge forecast that’s about a billion dollar loss to state revenue, not by — because we simply don’t enforce our current sales tax laws. If you remember, La Shish restaurant actually got busted for funneling about $20 million to Hezbollah every single year, and uh, well, that’s a large line item. They use zappers to go off and accomplish that. So, there’s another billion dollars, so now we’re down to what, $4.1 billion?

And uh, when you actually have economic growth, and you actually add jobs like we’ve done over the last seven years, we’ve put in about – over 500,000 private sector jobs. That actually puts you to the point of another $1.9 billion to the good, just from that economic growth, because you’re taking people off of welfare, you’re taking them off of Medicaid, you save about $6,000 per person or per job in that context, and you also provide, I think it’s roughly a little over $1,000 per person on the revenue side, and so the net impact is about $1.9 billion dollars.

So, hopefully you’re seeing that if you actually have a constancy of purpose around the objective of eliminating the state personal income tax, we can achieve it. I mean, I’m one of those guys that likes shooting for big goals. That’s why I worked in the space program, that’s why I led the effort to make Michigan the 24^th right-to-work state. You know, you got to sometimes swing for the fences, because those are the policies that are gonna have the best impact in the life of our citizens.

CARTER: Okay. So switching gears now to criminal justice reform. That would be a big issue for anyone who became governor. Is there any specific issue within our criminal justice system that you think needs reform?

COLBECK: Well, as you know, it’s probably one of the largest general fund line items in our state budget, and so it’s an opportunity that if you deliver those services more effectively, more efficiently, you’ve got a huge opportunity to free up dollars to put towards other priorities and give back to the citizens. Which, by the way, $300 million, it’s another – you can get about $300 million in savings by focusing on programs that actually encourage recidivism.

I serve on the criminal justice policy commission, and one of the reasons I’m on there is because we’re actually lacking data and what the impacts there of different policies. And I’m an IT geek at heart, that’s what I used to do, Microsoft small business specialist, and one of the things I like to do is actually show the connected threads that we need as policymakers that show the impact of our policy decisions upon the bottom line. And I’ve been pushing for legislation and policies that actually help us do that.

My focus is on defining all the different programs that are out there, highlighting how they have an impact on recidivism. The ones that are the lowest cost implement but have the best bang for the buck and actually decrease recidivism, those are the ones we want to promote going forward. The stuff that’s just a bunch of Ph.D.s from universities going off and getting in big grant money and then want to go off and test it into the prisons, but it actually ends up costing a boatload of money to go off and implement, probably those aren’t the ones we’re gonna go off and pursue.

We want to have the ones that are the most impactful, and that provides ultimately, we want to get away from corrections being about warehousing people; we want them to be rehabilitated and turn back in society. We want to pay their dues for society for the crimes that they’ve done, but we also want to get them so they can be productive members of society afterwards. That’s why I’ve been focusing on getting us the data about what actually works and what actually doesn’t work.

CARTER: Okay. In 2008, former Gov. Jennifer Granholm signed the renewable energy portfolio standard into law, and then it was expanded by Gov. Rick Snyder in 2016. And for the viewers who don’t know, it mandates that Michigan’s energy utilities get 15 percent of their energy from what the states deem as a renewable source by 2021. Do you believe this was a good move, or a bad move?

COLBECK: It was a bad move, and I’ve actually – I’ve introduced counter-legislation that focuses it on empowering the individual consumer with the choice of whether or not they want it from renewables or not, renewables based on what the rate is for, that and they would actually pay the actual rate it takes to produce that electricity.

I had some bills that were introduced along those lines, but right now unfortunately the powers that be, pardon the expression, heh, are focused on making Michigan a monopoly state. And 90 percent of our consumers are forced into getting their electricity from one of two providers throughout the state. That’s wrong. I’m for complete, a hundred percent energy choice, so if you want to go off and get your energy from a solar panel, get it from a solar panel, if you want to get it from a wind farm, get it from a wind farm. You’re gonna pay the actual market price for that when you do that, if you want to get it from a coal firm, burning plant, or a natural gas plant, get it from that, but I think the consumer should be put back in charge, and we’ve seen that my office has been at the forefront of making sure that consumer rights are protected with the Michigan Public Service Commission right now.

Right now, the Michigan Public Service Commission is not really serving the public effectively. People are getting their power shut off for simple things like not wanting a smart meter on their, even if they’re elderly, which is a clear violation of statue, and my office has been at the forefront of holding them accountable. So when you’re in a virtual monopoly like we are right now, that Michigan Public Service Commission is supposed to be our consumer voice, and they’re not doing that right now, so that’s something that’s got to get fixed right away, and one of the best ways of fixing that is putting the consumers back in charge, and making us 100 percent energy choice state.

CARTER: So, do you believe those changes, those reforms, would lower the price of electricity in Michigan, which the government agency that tracks this, the federal agency, says are the highest in the Midwest, on average, for residential customer?

COLBECK: Absolutely. Right now, I mentioned that 90 percent of the market is under regulated utility. The 10 percent that have options with the alternative energy suppliers, they’re paying on average 10 to 20 percent less. Some of those consumers are actually public schools. As a matter of fact, our public school system in the state of Michigan saves about $15 million every single year by being able to get their electricity on the choice market, and so, what I’d like to do is extend those 10 to 20 percent savings to 100 percent of the market and let all consumers benefit from it.

CARTER: Um, so, what would you say is the number one issue where government regulations are getting in the way of our poor residents in the state?

COLBECK: Well, huh. Education is key because if you want to get out of being poor, the best thing you can do is get a good quality education. And so some of our schools right now and some of the inner cities in particular, they’re not really promoting good quality education, and so that denies the opportunity to move up the ladder.

Right now, I’m here at Michigan Association of Non-Public Schools, they’re providing a lot of these opportunities for schools in some innovative ways and getting them a good quality education and I think there’s – what we want to do is make sure that we start giving all parents, independent of their economic status, the opportunity to have access to good quality education opportunities such as those provided by these non-public schools, so I think that’s one of the reasons I introduced the Enhanced Michigan Savings Program, it’s an education savings account legislation. My hope is that eventually that will be broadened up, broadened out to include private schools, so that parents who want to send their kids to a parochial school don’t have to pay twice for their educations, once for their kid, once for their neighbor’s kid.

CARTER: So what would you say is the biggest issue facing Michigan right now?

COLBECK: Um. That’s a big question here. You know if you’re looking at it from an economic perspective, the key is we don’t have qualified employees to fill a lot of the job openings. I got 31,000 job openings in my district right now, and they can’t find qualified applicants who often fill those, but I think what’s more concerning for me, and this is why I’m such a passionate advocate for civics education, social studies education, is that we’ve lost respect for our system of government and how it’s intended to operate.

I’ve been very passionate about making sure we — promote what is noble, true, excellent, praiseworthy, in public service. We’ve got a lot of folks right now that are just serving themselves, they’re serving special interests or looking for their next escalation up the ladder, and here I am talking about that going for governor here, but I feel called to go off and do this, and I think we’ve got a lot to add on that, but there’s a lot of folks who are doing it for own personal self-interest reasons.

I think it’s important that we start electing people to public office that are looking beyond themselves, and so when somebody calls you by the name of honorable that they mean it, and it’s something that’s been earned because you are truly been looking out for the best interests of all the people in the state not just your own self-interest. And that’s what I hope to bring to the table as the next governor of Michigan.

CARTER: Sen. Colbeck. Thank you for being with us today.

COLBECK: Thank you, Evan.

CARTER: And you can find more interviews from myself and Michigan Capitol Confidential with the gubernatorial candidates in the coming months. If you’d like more news from us you can check it out at micapcon.com or look us up on Facebook.

This is the first interview in a series of five interviews with Michigan gubernatorial candidates we will be releasing over the next month. In addition to this interview with Sen. Patrick Colbeck, we also interviewed Dr. Jim Hines, Lt. Gov. Brian Calley and Attorney General Bill Schuette, all Republicans, as well as businessman Shri Thanedar, a Democrat. Michigan Capitol Confidential reached out to Dr. Abdul El-Sayed, businessman Bill Cobbs and former Sen. Gretchen Whitmer, all Democrats, but was unable to secure interviews with them.

In the interest of full disclosure, the interviewer in this video, CapCon reporter Evan Carter, worked as an intern in Colbeck's office and on his campaign following Carter's freshman year of college. He has not worked for Colbeck since.