Balancing the Budget on the Backs of Public Employees

MEA Votes E-Newsletter -- Jan. 20, 2010

Just say NO to balancing the budget on the backs of public employees -- again!
Senate Republicans and their leader, Sen. Mike Bishop (R-Rochester), want to solve the state's budget crisis on the backs of public employees -- again.

This week, Republicans unveiled a 10-point plan that includes measures to cut wages by 5 percent for all public employees and require public workers to pay 20 percent of health insurance premiums -- ignoring the fact that school employees alone have saved the state almost $1 billion during the past three years through concessions made locally.
This plan is the Senate GOP's lame entry into a broader effort to fill an estimated $1.6 billion hole in the 2010-11 budget. Legislators on both sides of the aisle are considering major reforms, and Gov. Jennifer Granholm is reportedly also working on several initiatives, including tax reform.There's no doubt that the state budget is a mess -- it has been for a decade. This year's gubernatorial and legislative elections are likely to make this year's budget process even more rancorous.

But before proposing more cuts to police and fire protection, schools, or other vital public services, lawmakers must consider how to get the revenues necessary to provide services that citizens need -- especially strong public schools to prepare students for the jobs Michigan needs. One place to look for such revenue is by examining tax breaks for businesses; currently, too little is known about how effective these incentives are and whether the promised jobs ever materialize. According to the Pew Center, last year Michigan gave away $6.3 billion more in tax exemptions, credits and deductionsthan it actually collected in taxes -- if only some of those programs are found to be ineffective, their elimination would fix part of this huge budget hole. (For more on real solutions, read the next item on "A Better Michigan Future.")
In addition to public employee wage cuts and mandatory health premium payments, the Senate Republican plan calls for up to $663 million in additional education cuts, including a proposal to require competitive bids for all K-12 non-instructional services. The other ideas include further cuts to state departments, Medicaid, and local police and fire. None of these so-called "reforms" fixes our decade-long budget mess, because Sen. Bishop and his colleagues refuse to address the real problem -- Michigan's antiquated tax structure.

Contact your state senator -- especially if they are Republican. Call or write your senator insisting that they oppose the Republican leadership's cuts-only plan because it would devastate -- not help -- tens of thousands of Michigan families and the communities where they live.
Stay tuned for more information on the 2010-11 budget -- Granholm is expected to present her budget proposal next month.

The MEA Scholarship

If you have a student heading to a Michigan college or is currently enrolled in one, take time during winter break to check out this scholarship opportunity.

Go to www.mea.org/.
Select Grants & Awards, then MEA Scholarship.

A description of the scholarship is available as well as the scholarship application. The scholarship deadline is February 12, 2010.

Race to the Top??

Members,
Many of us are alarmed by the recent "Race to the Top" push by our state and national governments. Take a moment to check out the following websites:

http://www.ed.gov/programs/racetothetop/index.html

www.michigan.gov/mde-recovery


One of the forms districts are being asked to sign has a letter attached from Superintendent of Public Instruction Mike Flanagan. One portion of the letter reads "Because the USED had accelerated the application process for states, we cannot provide you all the details of the state's plan at this time . . . We understand that you will be taking a leap of faith with this agreement . . . " They're asking districts to sign a "contract" before knowing the details. Do you know a single lawyer on the planet that would encourage his client to do such a thing? Visit the websites. Be an informed educator!

Homecoming Parade Friday 4:45, Come On Out, KEA!

Once again we would love to have you come out and join us for the walk in the Homecoming Parade. Parade starts at 4:45 in Pinewood's Bus Lot. Bring a bag of candy to throw if you can, and join the fun. Kentwood parents and kids love to see us out there.

Pinewood Teacher Gets the Facts. Are You Outraged?

Carl Morris, 8th Grade Science Teacher at Pinewood, talked to State Senator Wayne Kuiper's office about the budget. He was was told that the State of Michigan spent $47.9 billion dollars in fiscal 2009, compared to $43.9 billion in 2008. the state budget went up 9.1%. the state spent 3% less on k-12 education.
Reviewing the facts:
2008 State Budget $43.9 Billion
2009 State Budget $47.9 Billion
Increase in State Budget +9.1%
Decrease in K-12 Spending - 3%

Call the Governor, Call your Rep and Senator! This DOES NOT MAKE SENSE!

Budget Cuts Loom, Contact your Legislators!

It is definitely a call to action, we need to let Lansing hear our voice that the political games involving education needs to end. Make sure you check out the facts and make the contact, because the effects on our schools will be devastating if the current proposals pass.

Problems With Speaker Dillon's Plan

From www.MEA.org August 4, 2009

Concerns with Speaker Dillon’s Health Care Proposal include:

NATIONAL HEALTH CARE REFORM

We do not believe Michigan should be initiating major changes in the structure of health care at a time when a national health care reform is among the highest priorities for President Obama and the United States Congress.

• It makes more sense to see what transpires at the federal level and then determine what Michigan should do to take full advantage of any opportunities provided.

ALLEGED SAVINGS OF $880 MILLION

The information on local units of government is particularly questionable and we would like to see the data that supports the $880 million savings.

• This plan will not reduce the 2010 fiscal budget year deficit.

• The cost estimate of $15 - $20 million to administer health benefits for all school districts, community colleges, and local government employees and retirees as well as the other new and major responsibilities for the State Employer seems extremely low.

• Given the large number of school districts, community colleges, and local employees, most of any savings that occur would accrue to these employers and not help the state with its budget deficit.

• These employers, as well as the State of Michigan, (as an employer) are already seeing savings through benefit cuts and cost sharing, to the financial detriment of public employees.

• The $400 - $600 million savings your plan estimates comes from reduced coverage and cost shifts.

BENEFIT COMPARISONS

The November 2008 HFA Study on "Civil Service Salary and Benefit Comparisons" is cited extensively on page 4 of the proposal; however, little notice was paid to the same report indicating the overall costs of state employee health care now falls below private sector health care costs.

• As the report notes, starting in October 2008 state employees began to pay "more than double the amount paid in the previous year."

The Kaiser 2008 “Employer Health Benefit Survey” and Michigan State Benefit websites clearly show that Michigan active state employee benefit plans are about average when compared to state employee plans in the surrounding states.

• A savings of $400 - $600 million cannot be realized by reducing Michigan public employees’ benefits levels to the average of the surrounding states, because they are already receiving average benefit levels as compared to surrounding states.

COLLECTIVE BARGAINING

It is an inherent contradiction to speak of a single "portfolio of health care plans" while stating that the proposal will maintain the process of collective bargaining for public sector employees, whether they are covered under the Public Employees Relations Act, PA 312 or Civil Service rules.

• As your report implies, there are thousands of different collective bargaining units across the state.

• These cover a wide spectrum of employment responsibilities, some of which have intrinsic medical risks.

• What kind of process could be envisioned to bargain with all of these bargaining units and their employers?

EMPLOYER CONCESSIONS

In many instances, public employers have had financial reasons for supporting the trade-offs between wages and benefits that occur.

• Insurance costs, unlike salaries, are not subject to FICA and are not included in the compensation used to determine pensions.

• Forcing employee health care costs into a "one size fits all" or even "several sizes fits some" mode will reduce the ability to make such tradeoffs, which have been helpful in preserving the relatively amicable labor relationships Michigan's public sector has enjoyed during the past decade.

• Public sector employees have negotiated millions of dollars in concessions including unpaid furlough days and workforce reductions to protect their health care.