Tough & Painful describes our compilation of reform ideas as budget woes intensify in Lansing.
Just like the checkbook choices at many kitchen tables in Michigan, state government’s options for reform are tough, painful, hard to swallow. But not impossible.
The Center for Michigan has compiled a list of more than $1.5 billion in hard choices for budget cuts and reforms to the way Michigan’s public sector does the public’s business.
Most of these ideas are not new — they’ve floated through the halls of the state capitol for many months. Most of these ideas do not belong to the Center — they’ve been pitched by Republicans and Democrats, and left- and right-leaning interest groups alike.
This list is not the Center’s “magic bullet” plan to solve yet another state budget crisis. It’s not even a recommendation. It’s simply a catalog of every relatively recent reform proposal — Republican and Democratic — we could identify that hasn’t been debunked by state budget experts. We issue this list as a conversation starter, an early serve in a lengthy public policy tennis match.
After a near government shut down and incendiary tax hikes late in 2007, Governor Jennifer Granholm pledged there would never again be a tax increase on her watch.
Now, as a new president calls for a new era of sacrifice, as Michigan’s governor prepares her state of the state address in what is likely to be the toughest year yet in her tenure, and as a new crop of Michigan legislators receive their committee assignments, how will Michigan redefine its public sector?
If not these, what cuts must Michigan make? If not now, when?
These are the questions that will dominate Lansing in 2009.
12 Comments
It would be interesting if you noted on the list which party – Republican or Democratic – and which Chamber – House or Senate – initiated or passed the reform you list as ‘Legislative reform proposal during budget crisis 2007′. I think the information would give people a better glimpse into the past and an clue as to what could happen in the future. People might also get a better idea who they should talk to (Dillon or Bishop)to get it done. For instance, if you find out that the House passed or proposed a particular proposal more than once, as they did, then you know that you need to concentrate on the Senate in the future.
Your list of budget reduction issues is certainly less draconian than those proposed by the Mackinac Center. Still there are some that I think are more harmful than beneficial. State employees (and by extension retirees)have forgone a number of pay increases over the years to gain the health benefits they have. To now freeze pay, which has seen numerous reductions over the years through furloughs and the like, and reduce health benefits is unfair, especially in light of the continued reduction in work force and increase in work load state employees have had to face. All of these imapcts have happened to state workers through the last several years while legislators allowed themselves pay increases exceeding 40%, which have never been rolled back. Your proposal for a mere 5% reduction in their salaries while proposing much larger impacts on state workers is inequitable.
Another idea I think should be looked at seriously is the consolidation and reduction of local units of government. Townships are an anachronism of the Northwest Ordinance and no longer are needed. Elimination of townships with the transfer of their functions and tax authorities to county, city, and village governments will reduce many duplicative services and save millions. It might even allow some local tax relief and reduce the heavy burden on state revenue sharing. Likewise we should reduce the huge number of school districts in the state to a more manageable number, generating significant savings in overhead and administrative costs.
I would agree with Mr Phillips that some consolidation is in order at all local levels city, township and county. Functions of the various levels of local government should also be evaluated. Do we need all the state universities we have? We should begin to pay the true cost of our settlement patterns. Why do we have free park and ride on the interstate system.
I agree that there should be an assessment of the efficient and cost effective delivery of services. I totally reject that township government should automatically be eliminated. An MSU study found that township services were the most economical and residents rate their services highest.
How about “ONE” HR department for all the state employees? Why does each department have their own?
The list of waste and failure of MDOT is large and on-going. I never see this arena approached. There isn’t hardly a taxpayer who does not have a “story” to tell on this issue. This department could easily be entirely outsourced.
A 5% pay and benefit cut for the Gov and legislators is a gesture at best. They don’t want to be a part legislature like most other states so simply pay them the prevailing part-time legislature pay and benefits. Don’t like it? Move aside, others will be available. Living within the budget based on revenues is not hard just because it is state government. They make it hard.
Health care is most often correctly identified as a cost problem.
It is no longer a question that the form and method of delivering health care in the US is the most expensive and least effective in the developed world.
Universal single payor health works better and is significantly less expensive than our current system. Private insurance no longer works.
Savings from moving in this direction will dwarf the $1.5 billion you have identified.
Nationally this nation spends $745 billion on education and about $550 billion on defense.
The health care change will significantly reduce the cost of education. Recognizing that 50% of the staffing for schools is administrative should lead to the conclusion that making education more effective requires a reduction in this ratio – and some school districts are already doing it via half timing administrative staff (eliminating health care as well as lowering salary costs).
Also in education increase educational effectiveness and reduce long term all inclusive costs (what we should really be looking at)by creating small schools within schools, moving away from age grading and curriculum silos (learning what is needed for the 21st will take less time) and dropping the expensive but cognitively useless standardized testing and NCLB-AYP requirements.Taking action such as this in the business world reduces waste by approximately 40% to 70%.
The list presented is a good one but it will not create the profound changes that are necessary. Face the reality of our broken health care system and step up to our responsibility to reality check how we deliver the most important activity for the future of this state – educating our children.
Finally, complel the legislature to cease non cost reducing legislation and spend the next year in a collective effort to rid our legal code of ineffective law and regulation. Require all 83 counties and 1,400 plus local units to consolidate and standardize their codes of ordinances. That action will save individuals and small businesses, especially small businesses, a ton of time and money.
These are real, long lasting, game changing cost savings actions. All that is lacking is the will to do it! And that’s a human problem.
Little things can help as well. Here are a couple of examples:
1. Eliminate child day care licensing…this is a parents responsibility, not the state (which based on my past experience doesn’t do a good job anyway). Not sure of cost savings. If not eliminsted, make it optional, with licensees paying full cost of license for the opportunity to ‘market’ themselves as ’state licensed’ (should anyone think that designation has meaning).
2. Allow citizens to ‘volunteer’ service to planning commissions and similar boards. Because of an AG Opinion, I can’t be an unpaid PC member because the Township has chosen to pay other members…should be my choice…the state statute is permissive as to whether to pay, and that permissiveness should pass down to me. I get paid about 6 times what I pay in taxes, and I would gladly volunteer (giving the money back is not the same thing either because the Township still has to process payroll and I still have to pay taxes on the income).
Regarding local government consolidation… 1. if the theory of economy of scales worked in government, tax rates for cities and villages would be way below townships…That’s not the case by a long shot, 2. The closer government is to the people the better (generally) things seem to work…a little thing called accountability, 3. Don’t need to consolidate school districts (big big part of community identity), but should consider consolidating and/or privatizing administration, transportation, food service, etc. across districts.
First of all, do not make any cuts on teachers health benefits. It’s what makes being a teacher worth the $50k difference in non-teacher salaries. Second to help with crime issues, start with youth’s education. We need to make education enjoyable! A good example is the learning of sheet music. Sheet music is a whole other language, but somehow people can learn how to read it at amazing rates. That’s because music is learned through the heart and the head. Americans are known for their ability to dream (Which uses the heart and head). We need to incorporate this into our youths every day lives. We need to encourage their imaginations because imaginations lead to dreams and with advancement dreams can become possible.
With term limits in place it is clear that the bureaucracy runs Lansing now–I don’t know how the formula works given union representation–but why can’t we incentivize government workers at all levels by creating a bonus pool for each government department. Departments that come in under budget or that can squeeze out efficiencies can keep a large percentage of their gains/savings. Gov’t workers on the front lines should be the first be able to detect fraud and waste and weed it out. Gov’t workers as workers everywhere take pride in their jobs and do not like being told they are overpaid–this creates the right environment for productivity.
While we talk about cutting costs we better start addressing the equality of the taxing side of the state activities. It is time that the legislature and the administration seriously review the “subtractions” that are allowed on our tax return. If we reduced the amount of what is allowed as “subtractions”, we could reduce the tax rate that all the rest of the taxpayers are paying and increase the revenue collected. The recent articles about 90,000 teachers being provided an incentive of $6,000 more in pension benefits to retire after 30 years of teaching will cost us $540 Million more per year in pension payments. At the same time, these same taxpayers will no longer be paying $3,000 per year in state taxes because their pension benefits are not taxed and they will be eligible for a property tax credit of $1,200 per year. Combined this will cost the state another $450 Million in lost revenues from just these 90,000 retired teachers. This will result in another $1 Billion shortfall. If we don’t address these issues the revenue shortfall crisis will be even more serious than what it has been in the past.
I agree with Mr. Visel; there is more accountiblity with a governemnt closer to the people. He also states “Don’t need to consolidate school districts (big big part of community identity), but should consider consolidating and/or privatizing administration, transportation, food service, etc. across districts.” That would save a tremendous amount of money for the K-12 portion of the budget, yet a bill initiated in 2007 to do just that was watered down by the time it was passed and ended up being a complete waste of time (see HB 4592 – 2007). Hopefully this will be brought up once again. The ISDs are a level of state bureaucracy and that means they should be looked at also.
Cheer the Governor on corrections cuts people. You call for it and we provide it and all you do is call for more. This is the biggest decarceration effort in the history of the U.S. Pay attention and be realistic on how much further cuts cn go. Bone is all that is left. Do you want marrow?