The Legislature may need to use a heavier hand with regard to certain employment benefits offered to government employees and mandate certain levels via statute. This is especially the case when state law defines minimum retirement benefits for government employees, such as those for school employees. Reforming and benchmarking these benefits to private sector averages would require policy change at the state level.
An example of a statutory benefits mandate is the Publicly Funded Health Insurance Contribution Act of 2011. It caps government-employer contributions for health insurance or mandates 20 percent health insurance premium-sharing for all government employees. The act is optional for local governments with a two thirds vote of its governing board, but required for all public school districts.
The Legislature should consider the following policies along these lines to move closer to parity between public and private sector employment benefit costs:
- Statutory reform to MPSERS and MSERS, the state’s largest retirement systems.
- Require community colleges, state universities and other local government entities currently not subject to the Publicly Funded Health Insurance Contribution Act of 2011 to comply with its mandates.
- Eliminate the option of local governments to comply with the Publicly Funded Health Insurance Contribution Act of 2011.
- Cap what local governments can provide by way of paid leave, retirement benefits and other employment benefits, similar to how the Publicly Funded Health Insurance Contribution Act of 2011 caps health insurance costs.
- Make a portion of state funding to local government entities contingent on meeting certain employment benefits benchmarks.