PDF 48-month limit for Family Independence Program recipients
What Snyder’s Budget Said: "The budget presented today is a balanced, two-year spending plan with recommended fiscal year 2012 appropriations, as well as anticipated appropriations for fiscal year 2013. This new two-year approach to budgeting will allow for more long-term strategic planning, and if enacted by May 31, 2011, as requested by Governor Snyder, it will give schools, municipalities and other local service providers more time to manage their operations."
Background: Snyder made his pledge to enact a two-year budget a staple of his gubernatorial campaign. The idea has been around for a while. Oakland County, for instance, operates on a three-year rolling budget.
Fact Check: Snyder can propose a two-year budget and the Legislature can enact one. However, only the first budget for fiscal 2012 will have the force of law, according to an attorney general opinion written for Senate Appropriations Chair Roger Kahn. So the fiscal 2013 budget will be advisory.
Analysis: A two-year budget is a new approach in state government. This could provide more stability, as governmental entities will have an idea how much money they'll be receiving in fiscal 2013. But the fiscal 2013 estimates could change for a number of reasons, including the national economy's performance, how much revenue the new Corporate Income Tax brings in and how the domestic auto industry performs. Practically speaking, a two-year budget could ultimately prove to be a cosmetic reform.
What Snyder’s Budget Said: "The two Executive Budget bills presented today for legislative introduction are also 'omnibus' in nature, with one bill including all departmental operations and the other bill comprehensive to education. The two consolidated bills will allow for greater transparency in government spending, making appropriations easier to monitor across agencies."
Background: In the past, there have been bills for each Michigan department, as well as general areas, like K-12 education and general government, which includes the secretary of state, attorney general, the Legislature, courts and aid to local governments. For fiscal 2011, the Legislature passed 17 bills. Snyder's approach has only two big budget bills, one for education -- early education, K-12, Community Colleges and Higher Education -- and one for everything else.
In addition, past budgets included dollar amounts for specific programs, like the Michigan Tuition Grant in the Higher Education bill, known as "line items." Snyder's budget would "roll up" these line items to give departments "more flexibility" over spending.
Analysis: Snyder promises "greater transparency in government spending" via his omnibus budgets and rolled up line items. This could make it difficult for the public to keep track of government spending and see exactly what dollars are going to which programs. Some senators, including Kahn, have noted this is a big shift in power from the legislative to the executive branch and said they aren't planning to go along with it.
This approach could give the executive office a major increase in power. It could move money around throughout the year with little oversight by the Legislature, or input from the public or affected constituencies.
What Snyder’s Budget Said: "Adoption of this budget plan by May 31, 2011, will send the message that Michigan is ready for a new, sound foundation, and it’s the necessary budget for job creation and moving forward together."
Background: The constitutional requirement to enact a budget is by Oct. 1. For two of the last four years -- 2007 and 2009 -- the Legislature has failed in its only constitutional duty. Lawmakers have proposed several pieces of legislation setting a July 1 deadline, including Senate Joint Resolution E, which would withhold pay from lawmakers for each day past deadline. Those accountability proposals have not been approved by the full legislature.
Analysis: Snyder wants to send the message that the days of blown deadlines and failed deals are done in Michigan. However, there are already signs his ambitious goal won’t be met. A spokesman for Senate Majority Leader Randy Richardville (R-Monroe) told the MIRS Newsletter Feb. 19 that May 31 is "probably not really possible" to get the budget done, in light of the tax shifts and cuts proposed by Snyder. Richardville's goal is to get it done by mid- to late June. That would be three months earlier than in recent years.
What Snyder’s Budget Said: "Additional agency-specific performance measures that compliment MiDashboard are available for each program area supported in the Governor’s budget recommendation. These measures, along with an indicator of how performance is trending, are key to the Governor’s focus on managing for results. The measures presented are transitional, and reflect the initial steps of a work process that will culminate with the development of detailed balanced scorecards for each agency."
Background: In his State of the State address, Snyder proposed his Michigan Dashboard, which assesses how the state is performing in 21 key areas, including unemployment, bond rating and obesity. Building on this idea, Snyder's budget contains more than 100 metrics for each budget area, including the Department of Environmental Quality, Community Colleges, Corrections and the Department of Community Health. The performance measures gauge efficiency, effectiveness or quality. The rating is either declining, stable or improving.
Analysis: This benchmarking is meant to bring accountability to each aspect of the budget. It's also a quick and easy way for citizens to see how well departments and programs are working. From a government transparency perspective, this is the highlight of Snyder's budget.
What Snyder’s Budget Said: "Recognizing Michigan’s economic realities, university operations funding is reduced by 15 percent or $222 million to $1.2 billion. To protect students, Governor Snyder sets aside $83 million to reward those universities that contain tuition and fee increases below the historical five-year annual system average. In addition, the Governor maintains student financial aid funding at $51.5 million for needy students, but merges existing programs into a single Pathway to Higher Education program to streamline administration."
Background: Snyder is proposing a significant change to how Michigan's 15 public universities receive funding. They would receive a 15 percent cut for fiscal 2012 for sure. However, if they do not raise tuition past 7.1 percent -- the five-year, rolling average -- universities will not be hit with further reductions. That's Snyder's incentive to keep tuition increases down. But that also means if universities don't comply, their cuts will be even bigger, from 19 percent for Eastern Michigan University to 23 percent for Central Michigan University, according to the Presidents Council, State Universities of Michigan.
Snyder said he wants universities to make reforms, including bidding out non-instructional services, to keep costs down. But most universities have already privatized many of those operations, such as food service and bookstores and most also have a health care pooling plan.
For fiscal 2013, the funding level remains the same at $1.2 billion -- the high end for fiscal 2012. All line items have been rolled up into a single fund. In the past, each university received its own line item. There's also boilerplate language on using an incentive-based formula to be determined by the budget director and stakeholders. The metrics have not been established, although the budget document contains seven, including college graduation rate. It's not clear if the formula will be used for the entire budget, or just a small part.
Snyder is also restructuring financial aid, combining the Michigan Tuition Grant and Michigan Competitive Scholarship into a single program, the "Pathway to Higher Education" grants, which are need-based. There is no restoration of the Michigan Promise, which provided $4,000 for college to all Michigan students who met a few requirements.
It is unclear whether private universities will face any state aid cuts under this new scholarship program. If not, this would be a 15 percent cut to state universities, while scholarships to private schools escape any reduction.
Fact Check: Michigan's 15 public universities have been cut 18 percent from fiscal years 2002 to 2011 -- not adjusting for inflation -- according to the Presidents Council. Michigan ranked last of all states in higher education funding, the state Budget office reported in 2008. If all universities comply with the tuition requirement, that will mean universities have been cut 33 percent over 11 years.
Snyder criticized the elimination of the Michigan PromiseScholarship on the campaign trail in May 2010. He committed to restoring the program, but based on student need.
Snyder's fiscal 2012 and 2013 budget does not restore the Michigan Promise. The total amount of financial aid is $51.5 million and the average student award in $875.
Analysis: During the campaign, Snyder said Michigan's “world-class universities are one of our biggest assets" and he wanted the state to "invest in our talent" in the long-term. That's not happening in the short-term. And there is little evidence there will be revenues to do so in the long term under this budget.
As far as metrics go, there's a lot of uncertainty about how this will shape the fiscal 2013 funding formula. Universities are improving on all seven metrics laid out in Snyder's budget document. But the message being sent is that it isn't about pay for performance, as the universities received one of the deepest cuts in the entire budget. And the one university that decided not to increase tuition for the current school year, Eastern Michigan, is subject to the same 15 percent cut as the other schools.
Snyder has reformed the structure of financial aid, shifting it to be completely needs-based. But in this budget proposal he has not yet upheld his campaign pledge to restore the Michigan Promise.
What Snyder’s Budget Said: "For fiscal year 2013, the Governor sets aside $300 million from discretionary funding and, at a minimum, makes it available to eligible school districts whose employees’ share of health insurance costs is comparable to that of state employees. Program details will be included in Governor Snyder’s April 2011 special message on education reform."
Background: Since Proposal A was enacted in the 1990s, the state has largely established funding for schools, and it has been on a per-pupil basis. Snyder is changing this formula to include incentives, as he is doing for higher education and local revenue sharing. Districts that keep their health care costs down will be rewarded with more money from the state.
Analysis: Snyder hasn't released details of how this would work yet. But it is in keeping with his approach to reward departments and programs that are meeting the goals of his administration.
What Snyder’s Budget Said: "The Governor’s budget also eliminates statutory revenue sharing payments for cities, villages and townships in fiscal year 2012, leading to a net savings of $92.1 million. This reduction will impact 509 local units of government; currently, less than 30 percent of all local units receive statutory revenue sharing payments. To encourage necessary reforms, the Governor’s budget includes $200 million for a new incentive-based revenue sharing program available to cities, villages and townships that meet specific standards and adopt best practices. Program components will be provided in Governor Snyder’s March 2011 special message on government reform."
Background: Revenue sharing for local governments comes in two forms: constitutional -- which can't be touched -- and statutory, which can. Snyder's re-imagining comes on the statutory side. The idea is to reward municipalities that are helping themselves. Snyder hasn't detailed all the metrics, although service sharing is on the list.
This is a net cut of $92.1 million at a time when dozens of local governments are struggling to keep afloat. But the fiscal 2012 budget increases constitutional revenue sharing payments to cities, villages and townships by $25.5 million -- a 4 percent increase. State revenue sharing payments to counties are down by $51.8 million in fiscal 2012.
Fact Check: "Revitalizing Michigan's Central Cities is essential to the economic recovery of our state. With vibrant cities that have both economic opportunity and offer a great quality of life, our state will be positioned as a world leader again. As Governor, I will provide the leadership and vision necessary to support the restoration of our cities and control urban sprawl."
That's the top quote on the governor's web page devoted to central cities. He goes on to say that cities have been "ground zero" in the recession, thanks to high unemployment rates, and they've often suffered from poor management.
Local governments are taking a significant hit in his budget plan, after suffering $4 billion in statutory revenue sharing cuts over the last 10 years, according to the Michigan Municipal League. The old revenue sharing formula is based partly on population, so big cities like Detroit were favored. They also stand to lose the most under Snyder's new formula.
Analysis: Snyder is shaking up the way cities, villages and townships receive funding from the state. It will no longer be given; it will be earned based on how municipalities meet certain benchmarks. But this has been roundly criticized by groups like the Michigan Municipal League, which argues the cut will push more local governments into insolvency.
What Snyder’s Budget Said: "Ongoing declines in the prison population will allow for the closure of one facility late in fiscal year 2011, providing full-year savings of $18.9 million general fund. Other administrative efficiencies, supply chain transformations, elimination of the public works program, and competitive bidding of food service and prison stores in the Department of Corrections will save $32.3 million general fund."
Background: The Corrections budget has grown from 2 percent of state general fund expenditures in 1971 to 23 percent this year, to 23.7 percent under Snyder’s proposed budget. It is up to $2 billion, a .6 General Fund increase and .2 percent overall. In fiscal 2013, it climbs to $2.1 billion, a 4.3 percent General Fund hike and 4.1 percent overall. There are some cuts with the closing of an unnamed prison.
Reforms are limited to privatizing food service and prison stores. There's nothing about sentence reform, whether in terms of letting out prisoners who have served their minimum sentences or changing how long sentences should be for certain crimes.
Analysis: In terms of total budget amounts, the Corrections budget remains a sacred cow, as it was under former Govs. Jennifer Granholm and John Engler. There were signs Snyder would take it on, as the administration requested an analysis of reforms from the Corrections Coalition, which includes the Center for Michigan, Detroit Regional Chamber of Commerce and the Michigan Manufacturing Association. There are some small cuts and reforms. But the overall budget is up over both fiscal years, even though the prison population is down.
Snyder has hinted that bigger reforms are in the future, perhaps involving prisoner sentences. But those aren’t reflected in the fiscal 2012 or 2013 budgets. Politically, it could be difficult for Snyder to push those changes going into his 2014 re-election campaign.
What Snyder’s Budget Said: "Governor Snyder’s budget includes savings of $180 million general fund for employee concessions to be negotiated with represented employee organizations. These concessions reflect the necessary, long-term reforms needed to bring state employee compensation in-line with current fiscal realities."
Background: Five of the six state government labor contracts are up this year. The Office of State Employer and state employee unions will have to negotiate the finer points of these concessions in terms of pay and benefits, to be approved by the Civil Service Commission. The $180 million figure translates to about $3,200 per employee.
Snyder last month issued his Citizens Guide claiming that public employees are compensated more than double the rate of those in the business world. Several other studies contradict the findings, however. In his budget document, Snyder makes the overall case that compensation costs are increasing at an "unsustainable pace."
Analysis: This is a significant savings in keeping with Snyder's promise to streamline state government and get public compensation in line with the private sector. However, if the State Employer isn't able to negotiate these concessions, that will mean a hole in the fiscal 2012 and 2013 budgets.
Snyder said at his budget presentation that more reforms are forthcoming, although he didn't specify what they would be. Other reforms the administration has expressed support for include changing Public Act 312, which impacts binding arbitration for local police and fire, and cutting the amount of time it takes businesses to receive environmental permits. There's no shortage of reform ideas floating out there, which could include a health care pooling plan proposed by now-Treasurer Andy Dillon.
This Truth Squad report analyzes four key components of Gov. Rick Snyder’s new tax proposals:
Elimination of Various Tax Breaks
What Snyder’s Budget Said: “In order to stimulate the economy and ensure that the state is open for business, my plan includes the promised elimination of the Michigan Business Tax, to be replaced with a flat corporate income tax set at 6 percent.”
Fact Check: Snyder’s proposed two-year budget makes good on his campaign pledge to replace the Michigan Business Tax with a simpler, 6 percent corporate income tax.
Businesses would get a $1.73 billion tax cut by fiscal year 2013. Snyder would pay for it by increasing the personal income tax by $1.86 billion.
Virtually all credits in the MBT would be eliminated through the corporate income tax. And 95,000 of the 136,000 businesses that file MBT returns would not be subjected to the corporate income tax, said Terry Stanton, a Treasury Department spokesman.
The tax would apply only to “C” corporations that have public or private stockholders. All other businesses would be exempt from the tax.
Business Leaders for Michigan President Doug Rothwell told the Detroit News that swapping the MBT for a 6 percent corporate income tax would put Michigan “in the top 15 states in terms of lowest business taxes.”
But the Michigan Manufacturers Association said many of its members could be hit with a tax increase under Snyder’s plan to reform business taxes. That’s because the corporate income tax would eliminate a 35 percent credit against the personal property tax in the MBT, which raises about $1 billion a year for local communities.
In his budget message to the legislature, Snyder said he plans to address the property tax burden on businesses at a later time. And he said the corporate income tax would eliminate double taxation for most small companies whose owners pay the MBT and are taxed on personal income from their businesses.
The Tax Foundation ranks the MBT as the 48th worst business tax in the country. But it rates Michigan’s overall business tax climate as 17th best in the nation, up from 28th in 2006.
Local economic developers have said Michigan needs to reform its tax code in order to better compete with other states for business investment. But they worry Michigan could lose potential new jobs to other states by the elimination of tax incentives called for in Snyder’s budget.
Analysis: Snyder fulfilled a campaign promise by proposing to kill the MBT and replace it with a 6 percent corporate income tax.
Snyder has said cutting business taxes will lead to economic growth and more jobs. Recent history in Michigan shows the link between low taxes and more jobs is a tenuous one.
Under the MBT approximately 100,000 businesses in the state, about 40 percent of all businesses, were not subject to the tax, according to the Treasury Department. The state government’s overall tax burden—taxes as a percentage of personal income—fell from 9.5 percent to 7 percent over the past decade. And in the past five years, the Tax Foundation said Michigan’s business tax climate showed a marked improvement.
Yet, Michigan lost about 850,000 jobs in the past decade and 540,000 in the past five years alone. It was a decade-long recession marked by extreme manufacturing decline. Tax-cutting advocates could argue those losses may have been even larger without an improved tax climate. But, without question, other factors – global recession, a cratering in demand for new cars, and outdated cost structures at the Big Three auto companies – arguably overshadowed the finer points of state tax policy throughout the decade.
What Snyder’s Budget Said: “Governor Snyder supports a tax code that is simple, fair and efficient for individual taxpayers, as well as businesses. Along with a flat corporate income tax, the governor proposes that the individual income tax rate be reduced on October 1, 2011, from 4.35 percent to 4.25 percent, as currently planned.”
Fact Check: As part of a 2007 agreement to balance the budget, the state income tax was temporarily hiked from 3.9 percent to 4.35 percent. The rate was scheduled to be cut annually until it reached 3.9 percent again Oct. 1, 2015.
Snyder’s plan would halt further reductions and freeze the rate at 4.25 percent. His plan represents a major shift in the tax burden to individuals, in order to pay for a $1.73 billion tax cut for businesses.
Michigan still would have the second-lowest flat income tax rate among neighboring states, behind only Indiana at 3.4 percent. Ohio and Wisconsin have graduated income tax rates with top rates of 5.925 percent and 7.75 percent, respectively. Illinois recently raised its income tax rate from 3 percent to 5 percent.
The Tax Foundation ranks Michigan’s personal income tax as the 12th most competitive in the country.
In the 10-point plan presented during his campaign, Snyder said he “believes that we need to reduce the tax burden on families and businesses in Michigan.”
Analysis: Snyder did not specifically address how he would deal with the personal income tax during his election campaign. A considerable shift in tax burden from business to personal income taxes gets halfway to the goal in his policy papers: “Rick believes that we need to reduce the tax burden on families and businesses in Michigan.” In the budget proposed last week, business largely wins, but many who pay personal income taxes take on a bigger overall burden.
What Snyder’s Budget Said: “Further, Governor Snyder believes all taxpayers should pay the same rate regardless of their source of income. In conjunction with the reduced rate, the governor recommends broadening the base to which individual income tax is applied in order to capture all individual income in the state regardless of source. This more equitable application will ensure that all income is taxed at the same 4.25 percent rate.”
Fact Check: Snyder’s plan to tax private pensions would produce nearly $1 billion in new revenue. Michigan is one of only three states that shield most pension income from state taxes. His plan is to tax all income, regardless of its source (except for Social Security).
The senior population is growing in the state. A Census Bureau chart in Snyder’s budget proposal shows the percentage of residents who are 65 and older is expected to grow from 12.8 percent of the population to 19.5 percent over the next 20 years.
Michigan has never taxed public pensions, but private pensions were fully taxed when the state enacted the personal income tax in 1967, according to Treasury Department documents. A portion of pension income was exempted beginning in 1974. The size of the exemption rose over time to the current $45,120 for single filers and $90,240 for joint returns.
His tax plan also ends the earned income tax credit, which reduces taxes paid by low-income working families by an average of $400 a year, but costs the state budget about $330 million a year.
The earned income tax credit, a companion to the federal credit, was proposed by then-Gov. Jennifer Granholm and enacted in 2008.
Snyder says eliminating the credit will allow the state to maintain Medicaid benefits for the state’s poorest residents. But proponents of the credit say it boosts the state’s economy because families spend much of the cash it generates in their own communities. Proponents also say the credit keeps thousands of families from falling into poverty. And they note that while this proposal will keep the income tax rate the same across the board, renters pay higher property taxes than do homeowners today, and the poor tend to pay more of their income in Michigan sales taxes than do the rich.
Analysis: Documents from the Treasury Department estimating how various classes of taxpayers would be treated under Snyder’s proposal show that most retirees with modest pensions would not pay income taxes. And Michigan is one of only 24 states that supplement the federal earned income tax credit with a state credit.
Workers at the bottom of the income scale also would not pay the income tax, according to the Treasury estimates. But the size of their tax refund checks would be smaller than under the current system.
Snyder said taxing all personal income is part of a “shared sacrifice” needed to put Michigan on a strong financial footing.
What Snyder’s Budget Said: “Consistent with his simple, fair approach to the corporate income tax, the Governor also recommends that all credits and deductions related to the individual income tax, with the exception of the personal exemption, the exemption for individuals with disabilities, special provisions dealing with military personnel and veterans, the homestead property tax credit and a few other subtractions, be eliminated. These changes are designed to provide equitable treatment for taxpayers.”
Fact Check: These are the major credits and deductions that would be eliminated in Snyder’s tax plan:
--The Homestead Property Tax Credit would be set for everyone at 80 percent on taxes paid above 3.5 percent of their income. Currently eligible taxpayers get a credit of 60 percent of taxes paid above 3.5 percent of income, but those older than 65 get a 100 percent credit.
The phase-out range for the homestead credit would be lowered to $61,000 to $70,000 from the current $73,650 to $82,650.
--The personal exemption would be phased out on single taxpayers with incomes above $75,000 and on joint filers with incomes above $150,000.
--A variety of other credits, including college tuition and fees, car donations, medical care savings accounts, and gifts to public radio, universities, museums and libraries would be repealed.
Analysis: Snyder’s proposal would simplify tax returns for many filers. And while changes to the personal income tax may mimic Snyder’s “simple, fair approach” to the corporate income tax, there is one major difference: changes in the corporate income tax sharply reduce revenue while changes to the personal income tax greatly boost revenue.
48-month limit for Family Independence Program recipients
What Snyder's Budget Said: "The Executive Budget includes nearly $8.8 billion in funding for schools' basic operations, a reduction of $564 million from the fiscal year 2011 level. Foundation allowances are reduced 4.1 percent, an additional $300 per pupil to reflect available revenues."
Background: Public schools have absorbed multiple cuts over the past decade, but are often a last resort. Snyder's predecessors made K-12 education a higher priority than other public services, protecting the School Aid Fund at the expense of the General Fund.
Fact Check: Michigan teachers were the 11th highest paid in the nation in 2008-09, with an average salary of $57,237, according to a National Education Association report. The report said Michigan ranked 3rd in state and local education revenue as a percentage of personal income in 2007.
Analysis: While the governor's budget message says the cuts are needed "to reflect available revenues," the reality is that no cuts would be needed if his proposal didn't, for the first time, fund higher education with what has historically been K-12-earmarked funds. That will take $895 million that could have gone to K-12 away from local schools.
To pay for that shift, along with changes in tax law that also reduced K-12 funding, Gov. Snyder's budget is proposing deep cuts in education. He says that this will force local school districts to become more efficient and lower their costs. School districts would get $300 less per student, on top of a $170 cut this year. In particular, he wants school boards to extract concessions from unions by getting employees to pay 20 percent of their health care premiums. The governor also asserts that schools can save through consolidation of services and improving purchasing practices. The budget cuts will also make it much more difficult for unions to negotiate pay raises.
Concessions with labor unions are unlikely to come easily. If unions balk, teacher layoffs will be imminent, leading to impacts such as larger class sizes.
48-month limit for Family Independence Program recipients
What Snyder's budget said: "The Governor recommends a 48-month lifetime limit for Family Independence Program recipients, saving $77.4 million ($65 million general fund). Exemptions for incapacity and hardship will provide safeguards for those clients who are unable to achieve self-sufficiency in four years. With this policy change, the Family Independence Program will provide financial support for 71,000 families at a cost of $356.8 million ($141.7 million general fund). "
Background: The Family Independence Program provides payments to low-income families with minor children and two pregnant women. The grant for a family of three is $492 a month. Recipients are required to have jobs or get involved in employment-related activities. Current law has a four-year lifetime limit with some exceptions.
Analysis: Snyder's proposal allows for exceptions in cases of hardship or incapacity. An estimated 12,600 families are expected to lose benefits as a result of the change. It would save the state $77.4 million in general fund money, about 6 percent of the Michigan Department of Human Services budget. The savings are about $10 million more than the state will spend to enhance child welfare services.
What Snyder's Budget Said: "A recommended change in the delivery of police services will accommodate the public safety needs of various areas throughout the state while saving $3.2 million general fund. The number of police posts will be reduced, and investigative services will be expanded to all seven districts."
Background: Snyder has proposed a virtually flat state budget — up by 0.5 percent to $262 million. In recent budget years, the state has struggled to avoid laying off troopers. The governor said that one still-to-be-identified post will close.
Analysis: Snyder says the closure won't diminish public safety because technology enables troopers to do more work in their cars. It will, however, make it harder for citizens to know where to go if they need to meet a state trooper or make a report.
What Snyder's budget said: "The Governor's budget includes $75 million in 21st Century Jobs Fund revenues to support economic development activities in the state. Fulfilling a commitment made during the Governor's State of the State address, $25 million of that amount will be used to continue the award-winning Pure Michigan tourism promotion program".
Background: The Pure Michigan ad campaign has been rated as one of the 10 all-time best state promotion campaigns in the country, and according to one study, returns nearly $3 in tax dollars for every dollar spent. But its funding has been fragile. A budget cut last year — later rescinded — forced the Michigan Travel Bureau to cancel last fall's program.
Analysis: The strong support from the Republican governor working with a Republican-controlled Legislature is likely to create stability in the program. What should translate into better long-term advancement of efforts to promote Michigan tourism.
What Snyder's budget said: "Governor Snyder's budget includes savings of $180 million general fund for employee concessions to be negotiated with represented employee organizations. These concessions reflect the necessary, long-term reforms needed to bring state employee compensation in line with current fiscal realities."
Background: State government employees have agreed to concessions over the past decade, including increases in health care premiums (new employees pay 20 percent, others 10 percent). But Snyder believes compensation is higher than for the private sector and more than Michigan taxpayers can afford. He issued a report that said compensation for state government workers in 2009 was 113 percent more than private sector workers. Labor unions say such comparisons are flawed because more state employees have college educations.
Analysis: Snyder will be looking for all state employees to pay 20 percent of their premiums, which is more in line with what the private sector pays and, Snyder says, more in line with what taxpayers can afford. Last year, unions agreed to contracts requiring newly hired state employees to pay 20 percent of their premiums. Now, the push will come for veteran workers to pay it as well.
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