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Well, it’s been four days since Gov. Rick Snyder presented his so-called “atomic bomb” budget, and opposition has started to harden. There are those who are concerned about the poor, largely because of the repeal of the Earned Income Tax Credit.

For example, Detroit Free Press editorial page editor Stephen Henderson said yesterday that this amounts to a “government-sponsored shift of capital away from the most needy citizens to those who are already more comfortable.”

Senior citizens’ groups are upset because the governor wants their constituents to have to begin paying Michigan income tax on their income, just like everybody else does on theirs.

The film industry is screaming about the potential loss of the film credits. The education community isn’t happy with the cuts they’d have to take, though they seem to be bearing them with more grace.

But the interesting thing to me is that none of these groups seems to be offering any kind of alternative plan. They want what they want, but don’t have any kind of broader vision.

Yet something radical does have to be done. The state is running an enormous deficit that has to be gotten rid of, and our old automotive-based economy doesn’t work anymore, not the way it did.

So the question for the critics is, if you don’t like the governor’s plan, what are you going to offer instead?

Photo courtesy of www.governorelectricksnyder.com

Governor Rick Snyder travels to Kalamazoo today where he will speak to the Kalamazoo Regional Chamber of Commerce and the Rotary Club of Kalamazoo. He's set to speak at 12:30 p.m. and a question-and-answer session is also scheduled. As the Associated Press reports, it's expected the Governor will spend his time defending the budget proposal he released last Thursday:

Last week, Snyder proposed a $45.9 billion budget that includes spending cuts for schools and getting rid of many personal tax breaks. His plan includes a corporate tax change that would save businesses $1.8 billion a year.

Snyder has been working to defend the plan. Critics say it means that the poor and the elderly, public education and local governments would be the ones picking up the tab for businesses.

Lieutenant Governor Brian Calley
Photo courtesy of www.governorelectricksnyder.com

Senior aides to Governor Rick Snyder say they don’t expect the massive budget protests in Wisconsin will spread to Michigan. Lieutenant Governor Brian Calley says Governor Snyder’s style is less combative than that of Wisconsin Governor Scott Walker. Calley also says he expects most critics of the Snyder budget will be persuaded to change their minds. He says that’s because tough choices this year will avert the need for more cuts in the future.

“Number one, we’re not going to kick the can down the road. Number two, we’re not going to employ one-time gimmicks and quick fixes and those sorts of things. We’re actually going to fix it so that, take a look at Year Two – this actually does solve the problem so going forth, we can actually spend more time on, where do we go from here? How do we work and grow together?"

Nevertheless, some public employee and retiree groups are trying to organize a protest march on Lansing this week. They oppose a demand for public employees to pay more of their health care costs, and a proposed end to the tax exemption on pension income. Governor Snyder presented his budget proposal to state lawmakers last Thursday.

User mtsn / Flickr

Governor Rick Snyder (and Budget Director John Nixon) presented the 2011 budget to a joint session of the Michigan legislature yesterday.

Michigan Radio's Jennifer White hosted a call-in show, “Funding Our State,” to take a look at the state of the state’s budget, which is currently facing a 1.8 billion dollar budget deficit for the new fiscal year that begins October 1st.

To find out what this budget means for educators, for finances, for business, and for you, click the link below.

(pchgorman, Flickr)

Michigan's budget debate is just getting started.    The governor has called for deep cuts and tax increases.   The plan has been criticized. But the situation is no where near as passionate as in Wisconsin. 

The streets of Madison, Wisconsin continue to be a battleground between Republican state lawmakers and their supporters who want to  end collective bargaining for state workers and state workers and their Democratic state lawmaker supporters who oppose it.     For several days, the budget impasse has stalled business at the state capitol.

Governor's Budget Draws Praise, Criticism

Governor Rick Snyder's budget proposal drew praise and criticism (though slightly more criticism) on Thursday.   The budget calls for deep cuts in spending across the board.  It also calls for taxing private pensions.   The Detroit Free Press described Snyder's budget as 'ambitious, but controversial:

The Budget

Feb 17, 2011

Well, the governor’s budget has landed, and people are  shocked. They shouldn’t be. This is what we bargained for. This budget is, in part, a legacy of the last thirty years.

Starting with Ronald Reagan, we’ve been told repeatedly that taxes were bad. Not that they were sometimes too high, but that they were bad, period. So we cut them, and cut them again.

Photo courtesy of www.governorelectricksnyder.com

Update 6:46 a.m.:

Governor Snyder has given a copy of his $45 billion budget plan to the Associated Press. The AP reports:

Rick Snyder is asking for "shared sacrifice" from everyone from senior citizens to state workers, public schools to city halls as he seeks to make up a huge budget gap with a massive budget overhaul.

Even before Snyder presented the plan to lawmakers Thursday, he was defending it. He says it would put the economically troubled state on sound financial footing.

It would cut spending for schools, universities and local governments while ending many personal tax breaks. It would eliminate before- and after-school programs, cut hundreds of state jobs and ask public employees for concessions.

6:30 a.m.:

Governor Rick Snyder will unveil his budget proposal today at 11 a.m. in Lansing. As the Associated Press reports, the proposal is expected to make, "sweeping cuts to spending and gets rid of billions of dollars in special tax exemptions, including those for seniors."

The state faces a projected $1.5 billion dollar budget deficit for the fiscal year that begins October 1st. 

GOP leaders won't reject Snyder pension tax plan

Feb 17, 2011
Photo courtesy of http://senate.michigan.gov

Republican leaders in the state Legislature say they want to give Governor Rick Snyder time to roll out his entire budget proposal before passing judgment on pieces of it that have become public.

State Senate Majority Leader Randy Richardville says he’s been briefed on the entire budget proposal and is telling people to be patient.

“We’re a little premature making an evaluation of an overall big picture solution. I commend the governor for not being afraid to take on a tough issue and not being afraid to take on a tough issue, not being afraid to roll out a plan. But this is his day, this is his budget. It’s his time to throw out his plan."

The governor is expected to propose lifting the tax exemption on pensions as part of a plan that will also include repealing the Michigan Business Tax, but replacing only part of the revenue.

The governor will make his formal budget proposal to the Legislature this morning at 11 a.m.

Lester Graham / Michigan Radio

Each Wednesday, Morning Edition Host Christina Shockley sits down with Michigan Radio’s Senior Political Analyst Jack Lessenberry to get an update on state politics. This week, the focus is on Governor Snyder’s budget proposal and what cuts he might suggest.  

Report: "Fireworks" over part of Snyder's Budget Plan

Chris Christoff, the Lansing Bureau Chief for the Detroit Free Press, says Governor Snyder plans to "eliminate Michigan's generous income tax exemptions for retiree pensions and IRA withdrawals as part of his budget plan" to be released tomorrow. Christoff wrote "a source familiar with the plan" says doing away with the tax exemption could generate more than $1 billion in revenue. From the Free Press:

Many expect Gov. Rick Snyder to set off political fireworks Thursday when he unveils a budget and tax revision plan he says will be simple, fair and efficient...Perhaps nothing will boom louder than a plan to tax pensions and other retirement income the same as all other income -- at 4.35%.

A Snyder spokesperson would not comment on the "speculation." Doug Pratt, a spokesman for the Michigan Education Association, told the Freep that Snyder will "will hear from a lot of retired employees in this state that are not going to be happy with that one." And an aide to republican State Senator Jack Brandenburg said the plan is "a nonstarter."

The Associated Press writes that Michigan's benefits for retirees are one of the most generous in the country:

The Washington-based Center for Budget and Policy Priorities says Michigan's benefits are twice as generous as those of second-place Kentucky. A retired couple in Michigan can have more than $100,000 of income without having to pay any state income tax...

Political pressure in the past has made it hard to reduce senior tax breaks to help the state's bottom line, even as Michigan steadily loses more to the tax breaks as the number of older taxpayers grows.

Governor Snyder will release his budget plan tomorrow.

Prison staff fear privatization is coming

Almost everything in the state is on the chopping block. There has been talk of privatizing parts of the prison system as a way to save money. The Associated Press says the Governor's budget plan will look at cutting around 10 to 20% out of the state's corrections budget.

State workers in prisons fear that will mean privitization. The Associated Press spoke with United Auto Workers Local 6000 spokesman Ray Holman:

The Prison support staff fear the governor may outsource their jobs to private companies to save money.

"If you're cutting $400 million ... you're going to have to go after something," said Holman, whose union represents tens of thousands of state workers, including prison support staff. "We stand to take a substantial hit." 

Former GM exec may return as advisor

The Detroit News says former GM executive Bob Lutz may return to the company as an advisor. From the Detroit News:

General Motors Co. has been in talks with former product chief Robert Lutz about bringing him back as a paid consultant, The Detroit News has learned.

The details were unclear Tuesday, but the 79-year-old Lutz continues to have a close relationship with GM, and the two have been in discussions about formalizing an advisory role, according to sources familiar with the discussions.

Lutz was known as a plain speaking executive at GM who was skeptical of the commercial appeal of electric cars and hybrids. As the Guardian reported when he retired in 2010, Lutz once described global warming "as a total crock of shit."

The Guardian writes that Lutz "predicted the internal combustion engine would reign supreme for at least a further decade, and that it would be "years and years" before alternatives make up even a tenth of the market."

Shawn Campbell / Flickr

Update 4:23 p.m.:

Rick Pluta, from the Michigan Public Radio Network, says the House will likely vote on a repeal of the Item Pricing Law tomorrow. Pluta spoke with the sponsor of the bill, State Rep. Lisa Lyons. She says individual price tags wouldn't be required, but stores would be required to prominently post prices so consumers know how much things cost:

"It does eliminate the antiquated requirement that every item be priced which has been in effect since before I was born, but it also upholds and provides for consumer protections that Michigan shoppers have come to know, expect and they deserve," said Lyons.

2:06 p.m.

The Michigan legislature is a step closer in repealing the state's Item Pricing Law.

The law requires that most items on store shelves carry an individual price tag.

The Lansing Bureau of the Detroit Free Press reports:

Legislation to rescind the requirement that almost all retail goods sold in Michigan be individually priced cleared its first hurdle in the state House this morning, winning approval in the Commerce Committee on a 16-3 vote. The measure was approved after its sponsors agreed to an amendment that will require retailers to clearly display prices in close proximity to the item for sale.

Governor Syder has said that a repeal of the law will send a signal that Michigan is a business-friendly state. Retailers say the law is antiquated and drives up prices.

Rick Pluta reported for the Michigan Public Radio Network that

The last effort to repeal the law was five years ago, but it failed under the threat of a veto by Governor Jennifer Granholm.

Proponents of the law say the individual price tags protect consumers from being overcharged.

Derek Key / flickr http://j.mp/1SPGCl0

Michigan Attorney General Bill Schuette says the state should save money in the corrections budget by cutting the costs of incarceration - not by closing more prisons or releasing more inmates.

Schuette says he hopes that's the strategy Governor Rick Snyder will display when he unveils his budget proposal on Thursday.

Schuette says he advised the governor to focus on reducing the cost-per-inmate by bidding out more prison services:

Jame Fairbrother / Flickr

Update 3:50 p.m.:

The city of Flint did not get approval today from the state for a $20 million bond.   The city needs the money to pay its bills.

The state Treasurer’s office asked the State Administrative Board to table the bond request, which it was expected to approve. The Treasurer’s office is concerned that the city doesn’t have a plan to deal with its long-term debt.   

Flint Mayor Dayne Walling is optimistic the city will get some help from the state. 

“I’m confident the city of Flint and the state Treasurer’s office will work together on a short-term, if not a long-term solution here in the next few weeks.”

Flint faces a multi-million dollar budget deficit.   The city has laid off police officers and dozens of other employees and has reached pay cuts with other city unions. But it still might have trouble making payroll in the coming months. 

Update 2:50 p.m.:

The State Administration Board put off a decision on the city's budget plan this morning. The city wants to borrow money in the form of $20 million in bonds to cover its budget deficit.

The Flint Journal has an update from Flint City Councilman Josua Freeman:

By the end of this month or next month, the city will only have about $500,000 in cash on hand, Freeman said. That's not nearly enough money to meet the payroll expenses of $1.5 million to $2 million every two weeks, he added.
"If nothing changes and we don’t improve our cash flow, we're not going to have enough money to operate," Freeman said.

If the city cannot make payroll, a state takeover or Chapter 9 bankruptcy might be next.

12:42 p.m.

The city of Flint wants to issue bonds to cover it's $17 million budget deficit, but state officials have yet to green light that plan.

The State Administration Board was scheduled to vote on that plan today, but it appears plans have changed.

The Flint Journal is reporting the Board voted to remove the city's request from its agenda today. The Journal reports that led to a cancelation of a Flint City Council meeting scheduled for tomorrow:

Tomorrow's City Council meeting to discuss a $20 million bond request from the state has been canceled.
The meeting, which was scheduled for 5:30 p.m. at City Hall, was canceled after The State Administration Board voted to remove the city's request from its meeting agenda this morning...That move came at the request of the state treasurer's office...City Council President Jackie Poplar said she was made aware of the situation and had no comment until she receives further information.

I was looking at President Obama’s proposed next year’s budget yesterday, trying to get some clues for how all this would affect Michigan. Suddenly, I was hit by a revelation.

Nobody really understands this budget, I thought. Nobody understands this budget because nobody really can understand it. It is too big, too vast, has too many contours and moving parts.

Sleeping Bear Dunes
Rebecca Williams / Michigan Radio

President Obama released his 2012 budget yesterday.

In it, he calls for major cuts to the Great Lakes Restoration Initiative.

The goal of this multi-year program is to restore habitat... clean up pollution... and keep new invasive species out of the Lakes.

Initially, President Obama requested $475 million for the first year of the program. He got that under a democratic Congress.

Congress is wrestling with how much money to allocate for the second year (this current fiscal year).

President Obama's budget deals with the third year of GLRI funding.  Obama wants to cut $125 million out of next year’s budget for the program.

I talked with Jeff Skelding, the campaign director of the Healing Our Waters-Great Lakes Coalition, to find out what this might mean. He says:

"The state of Michigan has a huge stake in this. They need their share of that funding to insure that restoration activities proceed forward under severely challenging economic times."

Skelding calls the GLRI "probably the most historic restoration program ever enacted by Congress for the Great Lakes." He says there is strong bi-partisan support for the program from the Great Lakes Congressional delegation, which makes him hopeful.

Governor Rick Snyder says his budget will not call for cuts in payments to doctors, clinics, and nursing homes that take Medicaid patients.

Snyder administration officials say it is important to maintain those payments at their current levels to make sure providers continue to see patients.

The governor’s communications director, Geralyn Lasher, says that is a less costly alternative to people showing up at emergency rooms when they get sick:

"We want people having a medical home, having a physician’s office, having that physician really guiding as far as quitting smoking, leading a healthier life, we're going to see much lower healthcare costs down the road if people take those steps right now."

Lasher says there will be other changes in Medicaid.

There are almost two million people in Michigan in the health coverage program for low-income people.

Medicaid makes up about 20% of the state budget.

The end of Borders

Borders Book Group Inc. can't pay its bills.

Several reports say the company is expected to file for bankruptcy sometime this week. From Reuters:

Bookseller Borders Group Inc is reviewing bids from liquidators to close hundreds of stores as it works out the final details of its impending bankruptcy filing, according to people close to the talks. The review is part of its plan to close about 200 of its 650 stores, which are a mix of Borders superstores and smaller Waldenbooks shops, these people said. The store closings will remove weak stores that have bled the retail chain's cash in recent years and provide immediate funds from the sale of inventory.

A Border's spokesman is quoted in the report saying, "Borders will not comment or speculate upon Borders' future course. If and when the company has something to disclose, it will do so."

President's Obama's Budget proposal and Michigan

President Obama released his budget proposal to Congress yesterday saying "Even as we cut out things that we can afford to do without, we have a responsibility to invest in those areas that will have the biggest impact in our future."

The Detroit Free Press says the President's budget is a "mixed bag" for Michigan. On the up side, the budget continues to invest in advanced vehicle technology research, it asks that a $7,500 rebate be put in place to encourage electric vehicle purchases (instead of a tax credit), and it would help the state avoid a big payment it owes the federal government for borrowing money to cover unemployment benefits.

And the down side? From the Freep: 

...it cuts in half a program to help poor people pay energy bills, cuts community block grants and Great Lakes restoration funding and ends plans to build an amphibious Marine Corps vehicle that could have created hundreds of Michigan jobs. 

A big day for Flint

The city of Flint will likely find out today whether it can go to the bond market to cover it's $17 million budget deficit.

The State Administrative Board is meeting today at 11 a.m. to decide the city's fate.

If the plan is not approved, the State of Michigan may eventually have to take over the city's finances.

City Administrator Greg Eason told WJRT

"This stabilization bond is critical to the survival of the city over the next three to five years."

Steve Carmody / Michigan Radio

By some estimates, the city of Flint is facing a $17 million budget hole.

Flint's Mayor is hoping state officials will allow the city to go to the bond market to overcome the budget deficit.

The State Administrative Board is meeting tomorrow to give a thumbs up or a thumbs down to the city's request.

The Flint Journal reports:

A state board made up of Michigan's top elected officials (or their delegates) is expected on Tuesday to consider the city's application to issue $20 million in bonds, part of Flint Mayor Dayne Walling's budget plan.

The State Administrative Board meeting will take place at 11 a.m. in the Lake Superior Room of the Michigan Library and Historical Center in Lansing. The meetings are open to the public.

Michigan Radio's Steve Carmody reported that without the money, Mayor Walling said the city will have trouble making payroll in March:

“There is nothing more important for our city right now than the bond.   We’ve been carrying a crushing load of past deficits on our shoulders.  And we’ve come to the point where the pooled cash is not there to make payroll throughout the entire month of March without an infusion of cash,” said Mayor Walling.

If state officials do not approve of the bond plan, the state may eventually takeover Flint’s finances.

Lt. Governor talks more about the coming budget

He didn't liken the proposed state budget to an atomic bomb this time around, but Lt. Governor Brian Calley continues to talk about the big changes Governor Snyder is seeking with his budget proposal.

The Snyder Administration will unveil the budget proposal to the State Legislature this Thursday. The Muskegon Chronicle wrote about Calley's remarks made on Saturday:

Michigan Lt. Gov. Brian Calley told the Muskegon County Republican Party that Gov. Rick Snyder's first proposed budget to be unveiled Thursday to state legislators will make good on the promise of “shared sacrifice” and a taxing system that is “simple, fair and efficient.”
He said the first weeks of the Snyder administration has laid the groundwork for the most extensive change in public policies this state has seen in generations.

Detroit Symphony Orchestra talks continue

The DSO is trying to avoid a cancelation of its entire season with stepped up talks between management and the striking musicians. Both sides were negotiating over the weekend, the Detroit News reports:

While both sides were tight-lipped Sunday, musicians spokesman Haden McKay did confirm late this afternoon that talks that began Friday to end the work stoppage and avert cancellation of the rest of the 2010-11 season were still ongoing.

Friday and Saturday's talks were indirect, with each side making its case to an unnamed intermediary, who then communicated it to the other party in a form of shuttle diplomacy. McKay did not specify whether today's talks were face-to-face or indirect.

Aretha Franklin Honored

Aretha Franklin was honored last evening at the 53rd Grammy Awards. The Detroit News writes:

A noticeably slimmer Aretha Franklin appeared in a videotaped message at the 53rd Grammy Awards, following a tribute to the singer that kicked off today's awards show. She thanked fans for their support since her "hospitalization" but didn't get into any specifics of her illness, and she apologized for not being at the ceremony in person. "Next year, OK?" she said.

A video of what some of the artists think of Aretha:

(photo by Steve Carmody/Michigan Radio)

Next week, Governor Rick Snyder will deliver a budget plan that his own Lt. Governor has described as an ‘atomic bomb’ of spending cuts. Michigan’s Corrections Department is expected to be a prime target. 

Michigan is facing a state budget deficit next year estimated at $1.8 billion. 

Michigan spends nearly $2 billion a year housing more than 44,000  inmates. The number of inmates has declined by more than 7,000 during the past five years.  And the number of prison employees has shrunk by nearly 4 thousand in the past decade.  

Still, conservative groups say more savings can be wrung out of the Corrections Department with privatization.

Mel Greishaber is with the prison guards union.  He warns privatizing some prison jobs might save money, but it will increase security problems.  

“Often...civilians who come in and work are not as sensitive to the safety issues and security issues that they need to be.”  

Greishaber is also worried about the level of experience state lawmakers have with Michigan's prison system.  A large percentage of state lawmakers are new to the job.   Greishaber notes that few members of the largely first term legislature have ever even visited a state prison.

 “Everyone comes in with preconceived notions.  They’ve watched movies which almost always are not the real life situation."

Photo courtesy of Fellowship of the Rich, Flickr

The City of Grand Rapids is working to revive its urban forest. Lindsey Smith visited the committee in charge of the effort to find out how things are going.

Three things to know about trees in Grand Rapids:

  1. The committee values the 61,000 trees within the city’s boundaries at $71 million.  (How'd they get that number?  It's based on the benefits trees provide: capturing storm water runoff, increasing property values, improving air quality and reducing heating and cooling costs for nearby buildings.)
  2. In 2010, more than 1,500 trees were planted in Grand Rapids.
  3. This year they’re working to add a wider variety of native trees - to better protect the urban forest from new pests and disease.  (i.e. things like the uber-destructive emerald ash borer)

Lindsey talked with Dottie Clune, the committee chair.  She says the importance of trees is often overlooked - especially these days with tight city budgets.

“We know that for every dollar we spent on the municipal urban forestry program we received $3.60 in benefits. That’s a pretty good return on investment.”

Photo courtesy of www.governorelectricksnyder.com

Governor Rick Snyder's budget proposal for the fiscal year that begins October 1st will be released next Thursday, February 17th. The state currently faces a projected $1.8 billion budget deficit for the new fiscal year. Snyder says he plans to ask lawmakers to do away with billions in business tax exemptions, according to the Associated Press. The AP reports:

Snyder has said he plans to review tax credits to see which are worth keeping, but hadn't said how many would be eliminated.

Lt. Gov. Brian Calley told the Holland Chamber of Commerce on Tuesday that the administration is counting on $2 billion from such cuts.

Calley also says the budget proposal will be like an "atomic bomb" going off in Lansing, a comment that drew criticism from Snyder spokeswoman Sara Wurfel.

Wurfel said Wednesday that Calley's comments were an "extremely unfortunate choice of words."

She also denied Calley's claim that Snyder plans to present an all-cuts budget.

Steven Depolo / Flickr

Appointed officials in Grand Rapids agreed to scale back the wage increases they recently received.

In a press release, the City officials said they were "responding to Governor Rick Snyder's call for realigning public employee compensation."

City Manager Gregory Sundstrom, City Attorney Catherine Mish, and City Treasurer Lauri Parks said they will return to their salary levels that were in effect in 2009.

City Treasurer Albert Mooney agreed to return 2% of his salary increase.

The Grand Rapids Press reports that if their request is granted:

Sundstrom's pay will fall back to $142,000; Mish's pay will return to $114,092; Parks' pay will go back to $93.731; and Mooney's pay will fall to $108,755.

The officials said in 2010, "appointed officials again led by example, voluntarily accepting an additional 10% reduction in overall compensation." This included turning down a 2.5% pay increase that was scheduled to take effect on June 30, 2010.

The Grand Rapids officials say the the 2.5% pay increase was "received, and is still being enjoyed today,  by all of the City's unionized workforce."

The city is in the middle of re-negotiating it's collective contracts with the City's unionized workforce. And the negotiations are "difficult" as Mayor George Hearwell said in his State of the City address last Saturday.

As Michigan Radio's Lindsey Smith reported, Heartwell said:

The city’s financial future depends on city employees taking further concessions in pay and benefits.

"There’s no doubt in my mind that unless we tackle this problem today, we cannot be sustainable over the long term," says Heartwell.

The vast majority of the city's workforce in Grand Rapids is unionized.

I called up City Attorney Catherine Mish, one of the officials taking the pay cuts. I asked her whether she and the others are sending a signal to the city's unionized employees:

"I would have to say 'yes.' We're hoping the unions agree to similar concessions."

Mish said the unions are under current contracts that run from July 1, 2010 to June 30, 2013.

Cedar Bend Drive / Flickr

Republican state Senator Roger Kahn introduced a bill yesterday that would eliminate the state's Earned Income Tax Credit. The tax credit currently goes to low-income working people in Michigan. The Associated Press reports:

He (Kahn) says the credit is expected to cost the state roughly $370 million in the upcoming fiscal year and the state can't afford it. Many House Republicans also support eliminating the tax credit. The tax credit is staunchly defended by groups including the Michigan League for Human Services and the Michigan Catholic
Conference. They say eliminating the credit would be the equivalent of a tax increase on the working poor.

The state faces a projected $1.8 billion shortfall for the fiscal year that begins October 1st.

A study commissioned by a union-backed think tank says reports that state and local government employees in Michigan are overpaid compared to workers in the private sector are wrong.

The study is by the Washington D.C. based Economic Policy Institute.

It says college-educated public employees earn 21% less than private sector workers with degrees.

It also found local government workers were compensated at about the same rate as their private sector counterparts.

Jeff Keefe is the Rutgers University management and labor relations professor who conducted the study:

"So the study concludes that state government employees are under-compensated in the state of Michigan, while local government employees are neither over- or under-compensated in the state of Michigan."

The report takes into account education, salaries, and benefits.

Ethan Pollack, with the Economic Policy Institute, says employee compensation is not the biggest factor behind the state’s budget trouble:

 "Michigan isn't significantly different than the deficits you are seeing all across the country…This is not about over-compensation of public sector workers. This is [about] two things. The cyclical deficit is from the recession, and the structural deficit is health care costs."

The Economic Policy Institute says its seven-state study found growing health care costs, and not employee compensation, are the biggest factor in budget deficits.

Photo by Rebecca Williams

At the moment, all royalties from oil and gas development in Michigan go into something called the Natural Resources Trust Fund. The trust fund money is used for improving wildlife habitat and parks and it's used to buy land for conservation.

But at a time when pretty much everything’s up on the chopping block... the future of that trust fund is in question.

State Representative Dave Agema (R) from Grandville has introduced legislation to divert oil and gas royalties away from the Trust Fund.

Under his proposal:

  • 60% of oil and gas royalties would go into the State Transportation Fund
  • 20% would go into the State Aeronautics Fund
  • the remaining 20% would go into the Natural Resources Trust Fund

The NRTF has been around since 1976. It was negotiated as part of a larger deal to allow oil and gas development in Michigan's Pigeon River Country State Forest.

I talked with the Michigan Environmental Council's policy director, James Clift, about this.  He says:

"Every corner of the state has obtained some of this trust fund money, either buying parkland or developing parkland, setting aside public land for hunting and fishing... It’s a very popular program and I think people are going to be very supportive of the way it’s spent currently."

Photo courtesy of www.governorelectricksnyder.com

Public employees are taking issue with Governor Rick Snyder’s citizen’s guide to the state’s finances. They say it presents an incomplete and inaccurate picture of employee compensation in the public and private sectors.

Unions say the data in the guide does not compare similar jobs in the public and private sectors. They point to half a dozen studies that paint a different picture than the Snyder administration’s data.

Nick Ciaramitaro is with the American Federation of State, County, and Municipal Employees:

"Salaries tend to be a little lower, benefits tend to be a little higher in the public sector, but if you look at total compensation, which is what the governor says he wants to look at, we’re very close or a little behind the private sector."

Ciaramitaro also says the data in the guide may not take into account unpaid furlough days taken by state and local workers.

The governor acknowledges the numbers in his guide are a broader overview of compensation trends, but he says he’s open to looking at other data before he presents his first proposed budget later this month: 

"I’m happy to have people react to it whether they agree with it or don’t agree with it because that may bring other data forward that may be worth considering as part of this process. It’s an open  dialogue. This is how you actually set the framework to have the open discussion you’d really like people to have.”

Snyder says that discussion will influence his administration’s budget plans. The governor will present his budget proposal to the Legislature on February 17th.

A brick church
User VanZandt / Flickr- http://j.mp/1SPGCl0

State lawmakers trying to eliminate the Earned Income Tax Credit are hearing from the Catholic Church.

The Michigan Catholic Conference says keeping the credit for the working poor is its top policy goal for this year.

The Conference is the official lobbying arm of the Michigan’s Catholic Dioceses and represents 2.25 million people.

Dave Maluchnik is a spokesperson with the Michigan Catholic Conference.

We have urged members of the House to reconsider their proposal to eliminate the earned income tax credit. There are numerous other groups out there in the state who are very concerned. In fact, there are many protestant organizations, Jewish organizations, that are very interested in protecting this policy.

Lobbying on all sorts of issues will heat up in the coming weeks when Governor Rick Snyder announces his budget priorities for the next fiscal year on February 17th.

Sarah Alvarez - Michigan Radio Newsroom

Pure Michigan

A measure to fully fund the Pure Michigan advertising campaign for the rest of the year appears poised for a vote next week in a state House committee.

Tourism officials and travel-related business owners showed up at the first hearing to support the legislation.

Dan Musser’s family owns the Grand Hotel on Mackinac Island. He says the national ad campaign has helped draw a growing number of out-of-state visitors to the island.

"Our potential is even greater than our success at this point, but if the campaign is not fully funded, we’ve wasted the opportunity for the Pure Michigan brand to reach its full potential. That potential brings tax revenues to the state, supports and creates jobs for Michigan residents."

Musser also says Mackinac Island is splitting the cost of a $1 million nationwide Pure Michigan ad purchase with the state’s tourism agency, Travel Michigan.

The ad will use the Pure Michigan brand to specifically promote Mackinac Island to travelers.

The Henry Ford in Dearborn will also share the costs of national campaign promoting the museum and the Pure Michigan brand.

Travel Michigan says about 30 other resorts and regional tourism offices  are also forming Pure Michigan ad partnerships with the state.

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