Gov presents new document on fiscal state of Michigan

LANSING — Gov. Rick Snyder released a gloomy report on Michigan’s fiscal health Monday. That report — The Citizen’s Guide to Michigan’s Financial Health — presents information on state revenues and spending, demographics and comparisons of state employee salaries to private employee salaries.

Snyder called the statistics he presented “ugly.”

“It’s a sobering day,” Snyder said. “We’re spending more than we’re taking in. We have no rainy day fund and were adding more debt. We’ve been using the credit card on a fairly hefty basis over the last few decades.”

But some public employee unions are taking issue with the way part of the document illustrates the differences in pay and benefits, like health care and retirement.

The document says that since 2000, public employees compensation grew by 19 percent while private sector employment compensation shrank by 13 percent. Income for local government employees grew by 13, percent while compensation for teachers grew only at 4 percent over the same time period.

Snyder conceded that the comparisons were not “apples to apples” and cautioned on the use of the data. He said it was “macro-data.”

Nick Ciaramitaro, a spokesperson for the American Federation of State, County and Municipal Employees (AFSCME), said that acknowledgment by the governor was important.

“In a job to job comparison we’re generally about 11 percent below a similar private job,” Ciaramitaro said. He noted that not all public employee positions had private sector equivalents, noting there was nothing in the private sector similar to police officers or firefighters.

In addition to this fact, Ciaramitaro noted that the groupings likely did not include many of the low paid employees his group represents, like school custodians and bus drivers. Those employees, he said, are paid about $12 an hour for part time work, bringing in about $24,000 a year, and often without any health or retirement benefits.

Ciaramitaro also said public sector employees have conceded much in direct and indirect ways to the state government. He pointed out that public sector union employees had given nearly a half a billion dollars in direct wage and health care concessions in the last six years. On top of that, he says, those employees have also had to increase productivity with fewer people as state government slashed 13,000 positions. That, Ciaramitaro says, saved the state another $4 billion in costs.

Other unions echoed Ciaramitaro’s statements. In a press release from SEIU, union officials called on Snyder to spread the sacrifice necessary to balance the state’s finances.

“Michigan public employees are ready to roll up our sleeves, sit at the table with Gov. Rick Snyder and work together to find solutions that will save money while protecting essential services,” said Phil Thompson, executive vice president of SEIU Local 517M. “Public employees have made sacrifices time and time again, and we want to be part of the solution. At the same time, we strongly believe it is only fair that everyone should share in the sacrifices, not just public employees. Our state faces tough choices about how to create a better future for our children and our communities, and we agree with the governor that the public deserves to know that our tax dollars are well spent.”

Snyder’s statements about public versus private compensation conflict with a 2008 House Fiscal Agency report that compared the wages and benefits of state workers to those in similar positions in the private sector.

The report found that while state workers with only a high school education made somewhat more than a comparable private sector worker, most state jobs require college degrees. People in these positions make less than their private sector peers and the gap in compensation grows with educational attainment.

As a result of worker concessions in 2007 state employees now contribute more to their health insurance than private sector workers, the report found. And that was before another round of steep concessions made by public employees last year, reducing benefits and requiring them to contribute three percent of their salary to their retirement program.

“I’m happy to have people react to it whether they agree with it or don’t agree with it, because that may bring other data forward that might be worthwhile to consider,” Snyder said. “This is an open dialog.”

But these public employee unions who fear they will be the target of a Republican legislature and governor when it comes time to carve the state budget.

SEIU officials said Snyder could address the inequity they see in directing cuts towards unions and public employees by closing tax loopholes that allow a few big companies to profit and ensuring that Michigan isn’t wasting money on tax breaks for big corporations that are not creating jobs.

Snyder addressed tax breaks briefly in his panel discussion with Business Leaders of Michigan. He said that tax breaks had to be examined as well. Following his appearance, he told reporters that he would judge a tax on three basic ideas: simplicity, fairness and efficiency.

But he says this report is not necessarily a foreshadowing of what people can expect on Feb. 17 when he unveils his budget plans.

“I wouldn’t draw any conclusions out of today with respect to what we are doing in February,” Snyder said. “This is to set a baseline of facts.”

In addition to the employee compensation data, Snyder also outlined how heavily in debt the state is, noting the impact of debt continues to climb, while revenues continue to decrease. Among those debt obligations Snyder pointed to were the increasing underfunding of state pension programs.