How Taxpayers Are Funding Political Lobbying

Michigan law requires public school districts to report publicly on their website how much taxpayer money they use to lobby the Legislature. But districts in Oakland, Macomb and Wayne County have found a way to work around the law.

In practice, this means that these public school districts can appear less politically active than they really are, while simultaneously spending hundreds of thousands of dollars on political lobbying.

The Setup

Enter the Tri-County Alliance.

The TCA is a 501c(4) non-profit, which means it is a tax-exempt organization that can lobby for or against legislation. The organization spends its money on a staff, contracted lobbying services, and a public relations machine aimed at inciting grassroots political activity. All this is done with funding from taxpayers via their school districts.

Here’s how it works: The 86 school districts in Oakland, Macomb and Wayne County use public dollars to pay membership dues to the TCA. The TCA then uses that money to campaign and lobby, but only a handful of these districts end up reporting these membership dues as money spent on political lobbying.

In addition, the TCA operates out of the offices of Oakland Schools, the intermediate school district in Oakland County. Information obtained through a Freedom of Information Act request show that the ISD provides the TCA operating space, employees, office supplies and services, such as mailing, fax, copying, printing, Internet access, information technology support, phone services, audio visual support, graphic design and more, all free of charge.

One document shows that "annual support costs" are split among the intermediate school districts in Oakland, Macomb and Wayne counties.

Oakland Schools superintendent, Vickie Markavitch, is paid about $250,000 per year and has spent the past few months traveling around the state speaking out against education reform bills — a position that aligns with the information pushed out by the TCA.

"The Tri County Alliance covers our major counties here, but it's actually an advocacy, nonprofit advocacy group for public education," Markavitch said in December.

Interestingly, Oakland Schools lists the TCA as a lobbying group on the district website, something few other districts in the three counties appears to do.

How Taxpayer Money is Used

According to the TCA's Form 990 filed with the Internal Revenue Service, the TCA brings in about $210,000 per year in revenue, most coming from dues paid by school districts. Documents show that the TCA received $151,344 in membership dues for the latest fiscal year and that the vast majority of the group's funding is public dollars.

Many of the trustees for the organization are current or former superintendents in the three counties.

The TCA reports that it sends invoices to collect membership dues from all 86 school districts, but a review of the district websites show that only 34 of them actually report in their transparency documents that they send any money to the TCA.*

Despite being under such severe financial stress that they are required to have emergency managers, Detroit Public Schools and Highland Park School District were reported to have paid $3,500 and $750 respectively to the TCA.

"What 'services' is the TCA providing districts for these dues?" said Audrey Spalding, an education policy analyst with the Mackinac Center for Public Policy. "If that service is lobbying then it should be reported as lobbying."

Top-ranking Democrat’s Former Chief-of-Staff Now Runs TCA

The 2011 executive director of the TCA was Thomas Svitkovich who retired from the Genesee ISD as superintendent in 2010. During his tenure at GISD, according to a story on MLive, he was accused of an inappropriate use of money for travel expenses and of having an affair with one of his assistant superintendents, who, according to MINBCNews, was also alleged to have embezzled money. The state police eventually decided against filing charges over the objections of the current board and administration at GISD. After the initial accusations, he was put on leave from the TCA and no longer serves as its executive director.

That position appears to have been handed over to Lansing lobbyist, Mark Burton, who was previously the chief of staff for Senate Democratic Leader Gretchen Whitmer, D-East Lansing.

Burton left the staff of Sen. Whitmer in February, at which time he took the job as TCA executive director. At the same time, he runs a political consulting firm, Burton Consulting, LLC, which, according to documents obtained in the FOIA, was paid $16,257.53 from Oakland Schools on Feb. 28, 2013.

It is unclear why the district paid for the consulting or whether Burton was receiving a salary as executive director for the TCA while Oakland Schools was at the same time paying Burton Consulting (in which Mark Burton is the sole member) for services. A request for comment on the matter was not returned.

The salary range for the group's executive director historically has ranged from $110,000-$132,000 per year. According to the TCA’s 990 form, the executive director works fewer than 30 hours per week.

On the TCA's IRS forms, the group justified the director's compensation, stating: "Executive Director's compensation based on comparative compensation paid to area school directors."

But the area school directors (principals and superintendents) oversee many employees and large budgets. The director of the TCA oversees a small budget and only themselves and sometimes one part-time employee. Additionally, as mentioned, Oakland Schools provides the TCA with most operating services.

Capwiz

The TCA also operates the "Tri-County Capwiz," an email service that allows the group to mobilize public school employees and others to lobby legislators.

According to a client of the group, "Capwiz is an online advocacy program developed by Capitol Advantage that allows for users to send advocacy messages and alerts to supporters or members in a variety of ways. It also allows for messages to be sent to key legislators at the state and national levels."

When someone signs up for Capwiz, they receive direct emails from the TCA urging them to support or oppose legislation and the service provides them an automated method to contact legislators.

Some of the emails from the TCA are factually incorrect. For example, on Feb. 19 one of its emails described Gov. Rick Snyder's proposed school budget as a "cut…on top of the nearly $500 per pupil cut they gave our kids in 2011."

The governor's budget proposal at the time added about 2 percent to the school aid fund. And there was not a "nearly $500 per pupil cut" in education funding in 2011. The Legislature actually trimmed the budget $270 per pupil with $170 of that being the result of the loss of one-time federal stimulus dollars.

A more recent email sent on April 16 included the following:

"The House and Senate are considering versions of the school aid budget this week, and both versions will again cut funding for your school. They continue the trend of disinvestment towards our K-12 schools, and while their methods are different, the result is clear: your school will have less classroom funds to then they did last year."

That's incorrect.

According to an article in The Detroit News just a few days before the email, "The Senate Appropriations subcommittee that writes the school aid budget voted Wednesday to raise the minimum per pupil foundation grant $100 to $7,066. The panel also adopted Gov. Rick Snyder's recommendation to give the state's lowest-funded schools a one-time $34 per pupil equity payment, giving about 440 school districts $134 more per pupil next school year."

And CBS Detroit reported, "The House and Snyder want the minimum grant raised $34 to $7,000 per pupil [for 2012-13]."

A request for comment sent to the TCA and to the Capwiz account asking how they determined that Legislature proposals would "again cut funding" for districts was not returned. 

When asked about the discrepancy, Oakland Schools Superintendent Markavitch wrote in an email: "House and Senate fiscal analysis documents should give you the information you seek."

But full funding details on the school aid fund from the Senate Fiscal Agency show increased money going to schools in the upcoming budget.

Publicly funded, private dealings

Because it is a public intermediate school district, Oakland Schools has to comply with open records requests and Capitol Confidential was able to obtain documents used for this story. That will not be the case going forward.

According to an agreement between the Tri-County Alliance and Oakland Schools, the organization will be moving from being housed at the district to the Lansing area. A FOIA request to the public school district was responded to, but an open records request to the TCA was ignored.

This makes sense, since non-profit groups are not subject to the state’s public information law. But this shows the purpose of the school districts compiling money to set up the group: Though nearly 100 percent of the funding for the TCA comes from public dollars, its actions will soon be hidden from public view.

Taxpayer dollars are being used to lobby for more taxpayer dollars with little scrutiny from the people funding it. By creating a nonprofit, southeastern Michigan school districts are able to fund a political lobbying arm and avoid disclosing these activities.

A request to comment on the Tri County Alliance and specific information uncovered for this article were not returned by executive director Burton. A request for comment sent to the school districts of Detroit and Utica also were not returned.

A request for comment from Farmington Public Schools superintendent Sue Zaralec, who served as the interim executive director of the TCA earlier this year, was referred to Burton and not returned.

When contacted with a series of questions, Danelle Gittus, communications manager of Oakland Schools, wrote on Feb. 7: "I will look into your request and be in touch.”

A follow-up email was sent a few weeks later. Oakland Schools did not offer further comment.

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*According to documents obtained with a Freedom of Information Act request, the following 49 districts received invoices to pay dues to the TCA, but did not report the expenditures:

In Oakland County: Avondale, Birmingham, Clawson, Hazel Park, Holly, Lamphere, Oak Park, Oxford, Pontiac, Rochester, Southfield, Troy, Waterford and West Bloomfield.

In Macomb County: Anchor Bay, East Detroit, Fitzgerald, Lake Shore, Lakeview, L’Anse Creuse, Mount Clemens, New Haven, Richmond, Romeo, South Lake, Van Dyke and Warren Consolidated.

In Wayne County: Dearborn, Dearborn Heights, Detroit, Ecorse, Flat Rock, Gross Ile, Grosse Pointe, Hamtramck, Harper Woods, Highland Park, Huron, Inkster, Lincoln Park, Plymouth-Canton, River Rouge, Riverview, Romulus, South Redford, Southgate, Taylor, Westwood and Wyandotte.