By C.J. Carnacchio
Leader Editor
Proposals seeking to reform government in the State of Michigan could result in elected officials and public workers at all levels receiving a 5 percent pay cut while contributing up to 20 percent for their health insurance.
Last week, state Senate Majority Leader Mike Bishop (R-Rochester) unveiled a series of 10 reforms to restructure and downsize government throughout the state, saving taxpayers an estimated $2.24 to $2.6 billion.
‘Some may view this as a mean-spirited attack on government, an attempt to address the problems of the economy on the backs of public employees. This couldn’t be farther from the truth,? said Bishop, in a statement posted on the state senate website. ‘Our neighbors, our family members, the people we serve every day are hurting. I am asking that we and all who serve them make some sacrifices so that we may continue to serve the citizens of this fine state and work to reestablish Michigan’s economic vitality.?
Repeated attempts to reach Bishop for a phone interview were unsuccessful.
In order to accomplish these reforms, Bishop is proposing some amendments to the state constitution.
One amendment would implement a 5 percent pay reduction and three-year pay freeze for all public servants at all levels of government in the state.
That includes all elected officials; all state, county and municipal government workers; and all employees working for public schools and public universities including administrators, teachers and professors.
According to the state Senate website, the pay cut would save an estimated $1.2 billion annually for all levels of government combined. Employee costs make up 75-80 percent of government costs.
Credit would be given for governments that have already implemented a wage reduction.
As part of the constitutional amendment, collective bargaining would be suspended for public employees during the three-year period.
Another proposed reform calls for all public servants at all levels of government in the state to begin paying 20 percent of their health insurance premiums.
However, if the government entity offers a health insurance plan that includes both wellness incentives for healthy living and a health savings account, in combination with a high deductible plan, the required employee contribution for premiums would be lowered to 15 percent.
According to Senate Bill 1046, exceptions would be made for public employees who are currently part of a collective bargaining agreement that differs from these proposed health insurance requirements.
In those cases, the mandated employee contributions wouldn’t take effect until the collective bargaining agreement expires. The requirements would apply to any extension or renewal of the agreement, according to the bill.
In a letter written to township supervisors, Bishop indicated these percentages are in line with what people working in the private sector are currently paying.
‘According to regional data from the U.S. Bureau of Labor Statistics, private sector employees in our region pay, on average, 20 percent of the cost of their health insurance benefits for single coverage and 30 percent for family coverage. Public sector employees in our region pay, on average, 10 percent for single coverage and 15 percent for family coverage.?
Requiring public servants to pay 15 or 20 percent of their health insurance premiums would save an estimated $615 million. Of that $68.8 million is from state employees.
Bishop is facing an uphill fight on these reforms.
Placing a constitutional amendment on the ballot requires either two-thirds approval in both the state House and Senate or the collection of approximately 380,000 signatures from voters in a petition drive.
Right now, the state legislature is divided with the Senate controlled by Republicans and the House by Democrats.