Educators Facing Off In Michigan's 59th House District

With just a little more than two weeks go before the primary election on Aug. 5, the candidates are hitting the ground hard in West Michigan.

In Michigan’s 59th House District, recently retired school superintendent Roger Rathburn is facing off with 27-year-old teacher Aaron Miller in the Republican primary. John Bippus and Bob Sills are also running but did not respond to questions.

The district includes St. Joseph and Cass counties and includes the cities of Dowagiac, Three Rivers and Sturgis. It is currently represented by Rep. Matt Lori, R-Constantine, who is term limited. The district has a 57 percent GOP base.

Capitol Confidential asked the candidates about several issues that will likely be significant in the coming years. The questions were about special tax credits and subsidies for businesses, a proposed reform to the underfunded teacher pension system, and higher mandated wages on state construction projects.

Current state law allows for the Michigan Economic Development Corp., which has handed out select tax credits and subsidies. The MEDC and related programs cost taxpayers about $300 million per year and have had limited economic effect.

Taxpayers also hand out $50 million per year in film credits. There has been a fight between the legislative bodies over whether and how much to spend on that program. In recent years, the House has opposed it while the Senate — particularly the leadership — has supported it. Gov. Snyder is also opposed.

Rathburn said he would support “practical and cost efficient” transparency reforms to the MEDC and would vote to eliminate the film subsidy program.

“The state should not be giving subsidies and tax credits to select companies,” Rathburn said. “In essence, they are picking winners and losers when they do so.”

Miller agreed. He agrees with more transparency and the eventual elimination of the MEDC funds.

“The problem is the words, ‘select companies,’” Miller said. “Who is doing the selecting? How is it fair? How do we know that some other company does not deserve those subsidies more?”

Regarding the film subsidy program, he added, “No, I do not support spending $50 million per year for moviemaker subsides. That money should be spent on our deteriorating roads.”

Both candidates also agreed on repealing the state’s prevailing wage law, which mandates higher costs on construction projects with no better service. This costs taxpayers an estimated $224 million annually.

“Wages for construction workers, just like most other occupational wages, should be driven by the free-market,” said Miller.

“The market should determine the rate,” Rathburn said.

In 1997, the state of Michigan began shifting new employees to a 401(k)-type plan. This has saved billions of dollars for taxpayers and protected workers by putting the money is in their hands. There is a current debate over making a similar shift with new teachers.

The current teacher pension system has $25.8 billion in unfunded liabilities. The potential representatives were asked if new school employees should be shifted to a defined contribution plan from the current defined benefit.

Rathburn pointed out that retiree benefits are a component of an employee’s compensation package and can serve as a way to attract good educators.

“However, pension programs must be sustainable,” Rathburn said. “Defined-contribution plans make sense while defined-benefit plans do not. The defined-contribution plan is an individual account which doesn’t leave anyone on the hook for expenses down the road.”

Miller said he would vote to close the pension system for new employees and encourage local government entities to close their systems as well.

“As a public school teacher myself, I understand that we have a tough job and I absolutely believe in fighting for our profession,” Miller said. “But pensions are not sustainable in the long run. … Every individual’s retirement plan should be based off of what he or she puts in.”

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.