Michigan's Competitiveness Depends on Defined Benefit Reform For Teachers
State could save $10 billion by the end of the decade
Michigan stands at the threshold of pivotal reform that could easily save its taxpayers $10 billion by the end of this decade.
The state Senate has already acted in support of legislation that would close the chronically underfunded "defined benefit" school pension system to new employees starting in 2013. Indications are that Gov. Snyder would support this. Current public education employees would still be covered under the existing system.
This transformational reform would be wholly consistent with a 1997 measure that did the same for new state employees, providing them with a 401(k) "defined contribution" pension plan. (Public school workers were not included in the 1997 reform, although Gov. John Engler had tried to do so.)
Such reforms are essential if Michigan's public sector is ever to achieve an economic status consistent with real-world dynamics, and if our state ever hopes to have a public sector whose compensation and benefit costs are affordable to taxpaying firms and individuals across Michigan's private sector.
Bond and credit ratings for Michigan and its local units of government will improve once this reform is enacted. This is because, as years roll by, it adds predictability, transparency and financial viability to public employee "legacy costs."
Financially and economically, this reform legislation is an essential measure for restoring Michigan to nationwide pre-eminence.
David L. Littmann is senior economist with the Mackinac Center for Public Policy, He retired from Comerica Bank in early 2005 as senior vice president and chief economist after a 35-year career in charge of Comerica’s Economics Department and Research Library. He also served as chairman of the Economic Advisory Committee of the American Bankers Association in Washington, D.C., where he met regularly with governors of the Federal Reserve Board.
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FROM MICHIGAN HOME HELP PROGRAM PROVIDERS — OFTEN FAMILY MEMBERS
ATTORNEY GENERAL ORDERED THE STATE TO STOP TAKING MONEY ON MAY 25, 2012
opinion May 25, 2012
The Service Employees International Union (SEIU) "organized” Michigan's self-employed Home Help Program providers for the purpose of skimming dues from their ailing and disabled clients' Medicaid subsidy checks. The majority of these providers are relatives or friends taking care of loved ones. It’s been estimated that less than 25 percent of the providers are hired in an employment setting.
The first counter tallies SEIU dues skimmed since the union and state officials first launched this scheme in late 2006. The second shows the amount skimmed since June 9, 2011, when the Michigan House passed and sent to the Senate a bill to ban this and all similar “stealth unionization” efforts. The third counter shows the dues skimmed since the Governor signed the bill into law on April 10, 2012. The fourth counter shows the amount skimmed since May 25, 2012, when the Attorney General opinion was announced.
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