By John Bebow - September 26, 2008
$800 million is a lot of dough — almost 10 percent of the State of Michigan's general fund budget.
It's also how much we can slice from that budget through the most obvious reforms, according to a new report from the Detroit Renaissance business leaders group.
"This is going to be an unpopular report," says Bill Rustem, president of Public Sector Consultants, which just gathered a bipartisan group of budget experts to write the new "Budget Action Plan."
True enough, plenty of traditional oxes get gored in this new plan. We'll summarize some of the high points in a minute. But, more important than any specific ingredient in a reform recipe is the idea that numerous and disparate interest groups are beginning to come together to push the Legislature to finally do what they failed to do in last year's budget mess — make major reforms in state government to free up resources for Michigan's most criitcal needs in economic development and education.
Action is possible (though improbable) in the lame-duck legislative session later this year. Otherwise, watch for a reform package to rise up the legislative agenda in 2009. The need is acute. By 2017, the state faces a $10 billion structural budget deficit if we don't change how we tax and spend. Those estimates, by the Citizens Research Council, were developed well before the current national financial crisis now threatening to drag the economy into deep recession or worse.
The essence is this… Very difficult and contentious debates are coming over the nature, size, and role of government in this state, as Phil Power writes this week. There is no appetite among leadership in either state party for tax increases and no room in the economy for any such drag.
Neither Dems nor Republicans can win this fight alone.
They need to work together and move off of rigid and ideological positions on taxing, spending, and reform.
And they know it.
Here's how Detroit Renaissance and Public Sector Consultants propose to begin to get our arms around the crisis with some $800 million in reforms…
Prison reforms. This means taking the best reform ideas from BOTH parties. It means loosening incarceration rates and shortening sentences to bring them in line with practices in other peer states. And it means tightening prison operations through privatization and other efficiencies to bring per-prisoner costs in line with other states.
Medicaid reforms. This means such things as coordinating care, changing the mix of services from institutional to community settings, promoting healthy behaviors and preventative care, and improving efficiencies in the delivery of care.
Teacher retirement reforms. This means moving newly hired teachers to 401k-styled benefits plans and otherwise tightening benefits and elligibility.
Public employee health care reforms. Simply put, state government employees receive Cadillac health care coverage with a Chevrolet co-pay. Bringing public sector health care coverage in line with governments in other states and the private sector could provide big savings while still providing public sector employees with fair benefits.
5 Comments
Medicaid and public sector health care are obvious targets for cuts but they do not represent the root cause of a cost problem in either the State budget or in health care.
The root cause is the world's worst health care system, by any measure, the health care system in the Unitied States. Trying to control costs at the state level is an exercise in futility, since the more efficient the customer gets the higher the cost of basic services will go.
Of GDP the US pays approximately 15% for health care; the rest of the developed world with single payer systems pays from 8% to 10% of GDP – and they cover all citizens.
Wait times in the US for cardiac/cancer care average seventy days; the next worst is Canada which ranges between seven and fourteen days.
If you're over 65 in this country you will pay 88% more, out of pocket, for your prescriptions than medicare does; an expensive doughnut hole brought to you by the drug companies.
Our general health is poorer and lifespans shorter than those in countries with universal health care.
We rank 47th in infant mortality in the world.
So rather than casting your gaze on local issues and costs in the state health care arena, go after the real cost culprit, a health care system designed to support the private enterprise (free market) health care system that is dysfunctional and bloated with waste to its' core.
Then you will be improving everyone's health, the level of service received and cutting cost in huge amounts.
Anyone who has worked for the State or a state-supported organization, such as a state university, has had a score or more identical annual conversations with a boss or supervisor: "Yes, we know you would be earning much more on the outside. We appreciate that your hours are longer than in the private sector, with no overtime and no bonus. But remember, your health care plan is good, and it will continue when you retire. So calm yourself, and remember that some day you'll appreciate the sacrifice you're making today." Yes, the health care system is broken, and the State is burdened with the cost, but why is the Center so antagonistic toward public service retirees. If it's any comfort, our health benefits are shrinking, and the cost assumed by the insured rises every year.
Ya know, i generally think of myself as a conservative populist. I have conservative values… – Does not = Republican. And I am for the betterment of the populace as a whole.
However, whenever i hear people make the veiled threat of "yeah i could make so much more money in the private sector, blah blah blah" I say, go ahead.
Its the same thing just about every employer in Michigan has been saying for the past 8 yrs.
If you think you can do better somewhere else, and thats what you want or need, go.
If you dont go, then either you're wrong and the market conditions dont support your threat, or you do your job because you like it.
End of story. Stop using it as an excuse to try to keep costly abundant benefits when the state is going bankrupt and has already Laid off thousands of people and cut millions in budgets statewide year after year for the past 7 yrs.
The first people that should have their pay slashed is our state legislature. Especially the Leadership.
cut their Staff, Cut their budgets, cut their pay, their benefits and make them feel the pain of the state's private sector for the first time during this downturn.
They dont feel constituent pain when they are making 2 or 3 times what the average michigan citizen is making and has a large well paid staff and plenty of perks.
Its all nice to send a kind letter or receive a courtesy call from a staffer if you've lost your job and retirment and about to lose your car or home… but they have no idea unless they are in the trenches with the 9% Michigan citizens who are currently unemployed, and the 35% making near poverty wages with children. And the 80% that havent gotten a raise or anything that comes close to keeping up with inflation over the past 7 yrs.
An Opportunity to MAKE A DIFFERENCE!Who do you suggest would be appropriate for me to share some information with– about a source of funds for Michigan. After contact with a Michigan Official it appears the proper Michigan officials and organizations such as The Center For Michigan may not be aware of these issues. The issues have involved hundreds of people in NY. Investigations are revealing many instances where funds are being found to be owed to NY, with future expenditures by NY related to these issues potentially being curtailed drastically. Apparently current actions by New York State are resultling in millions in the process of being owed to New York with untold millions to be saved in the future.
I have reason to believe a similiar
source of funds is
available for Michigan.
Please feel free to
contact me.
You can leave your name, number, and best times to contact you. I plan to be checking my phone several times a day.
Ann Cook,
585-334-9473
anncook@frontiernet.net
PS I use to work for Eugene Power, Phil's father.
There is nothing that Chuck has stated that is accurate, and I am appalled that no one has pointed out the error of his ways. We have a higher cancer survival rate than the state run systems of England, Germany, Denmark, or Sweden.
We are able to afford the best machinery and medicines. Canada ranks No. 13 out of 24 in access to MRIs, No. 18 in CT scans and No. 7 out of 17 in access to mammograms.
Canadian citizens who can afford to pay for their health care come to the U. S. for treatment, due to the widely reported 4 to 6 month delays minimum to be treated by the Canadian system. British citizens consider treatment in 4 months a success, and many surgeries have waiting lists of a year. French hospitals leave their windows open in the winter because the building heating system cannot be regulated. Canadian mothers come to the U.S. to give birth because of a shortage of neonatal units in Canadian hospitals. Some British pull their own teeth because they can't find a dentist.
Infant mortality is a meaningless statistic, as every country reports it differently. The U.S. tries to save premature babies, some of which die, which makes our infant mortality appear bad. Other countries simply record these as stillbirths, which are not reported as infant mortality. Also, most countries report the majority of 1st day deaths as stillbirths. We count it as infant mortality.
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