In a stroke that could dramatically restructure the workforce of state government and public schools, Gov. Jennifer Granholm today said she’ll prod into retirement 39,000 teachers and 7,000 state employees with at least 30 years of service, and double the cost public employees pay for health care coverage as part of her final year plan to reshape and downsize the cost of state government.
Granholm wants to replace many of the employees who would be pushed into retirement with younger, less expensive employees.
Newly hired public employees would pay 20% of their health care costs, about twice what state workers now typically pay for health insurance, under her proposal, which comes as state lawmakers debate their government reform plans. The 20% figure is the same one Senate Majority Leader Mike Bishop proposed last week when he unveiled a Republican plan for two constitutional amendments aimed at cutting the cost of government state government.
Employees would be given incentives to retire, saving $1.8 billion over 10 years and $87 million the first year. If 39,000(!) teachers retire, that would save $230 million in the first year alone. Problems might occur with the idea of a 20% payment on health care, and the fact that we would lose a lot of experienced employees that are vital to running state departments. But, if we are consolidating departments down in an effort to streamline, we were going to lose them anyway. Nice thing about this is that it would be voluntary. Also voluntary would be the ability for schools and universities to join a new state health care plan, and, if it's cheaper than what they have now, it seems you could entice people to join rather than force them as Dillon's plan would do. Easier said than done, I know. So... we will see if enough people would get on board with this to make it fly.
But wait! That's not all! If we act now, we can accomplish the following items that read like a laundry list of both Republican and Democratic ideas for reforming the government. This comes from the radio address today:
Included in the governor’s agenda are steps to further reduce the structural deficit, facilitate local government and school district cost-cutting, enhance accountability in government, and modernize the budget process. To advance these goals, the governor is proposing to:
• reduce costs by providing positive and negative incentives to encourage 7,000 eligible state employees and 39,000 eligible public school employees to retire;
• increase state employee participation in a new health-care plan that maintains critical benefits for new state workers and their families while reducing the cost to state government by 21 percent;
• eliminate lifetime health care for legislators;
• continue reforming Michigan prison policies to reduce costs;
• shift to a two-year state budget cycle;
• audit state contracts annually and review all tax expenditures biennially to identify needed changes and savings;
• implement pay-as-you-go budgeting;
• give local government, school, university, and other public employees the option to participate in the state of Michigan’s new, cost-effective health-care plan;
• require competitive bidding of contracts and additional shared services among local governments and schools;
• end immunity for prescription drug companies to enable recovery of Medicaid dollars as in 49 other states;
• streamline elections by allowing no-reason absentee voting, on-line registration, and elections-by-mail in some cases;
• require financial disclosures of all state elected officials and candidates;
• tighten ethics standards for elected officials, appointed officials, and state contract managers; and
• better regulate corporate special-interest campaign spending.
This is just the start. More will be announced at the State of the State Address next week, and during the budget presentation on Feb. 11th.
Ambitious much, Governor?