In preparation for the ongoing negotiations with state employee unions designed to force $145 million in concessions, Republican Gov. Rick Snyder ordered departments to prepare to fire some employees.
The $145 million in concessions were planned as part of Snyder’s recently passed budget. Under that budget, Snyder and the Republican dominated legislature eliminated the state’s Michigan Business Tax and surcharge, replacing it with a six percent flat tax. That move added to a budget deficit of $1.2 billion or so. As a result, the GOP hammered away at the budget removing exemptions on property taxes and instituting an income tax on the pensions of retirees. In addition, the lawmakers and governor significantly reduced a tax credit for the working poor.
But now Bloomberg News reports the governor has ordered state agencies to prepare a firing plan “as a last resort.”
Bloomberg also reports that UAW local 6000 has planned negotiations next Tuesday. All the contracts for state employees end Sept. 30 at midnight — the state’s fiscal year begins on Oct. 1. The negotiations will impact some 47,000 employees. The last resort firing plan has not been ironed out enough for the state to have solid numbers on how many employees might be fired if union negotiations fail to garner the state the sought after $145 million in concessions.
This is bad news in light of unemployment numbers for June, which were released by the state Wednesday. The report shows the state has an overall unemployment rate of 10.5 percent.
“Halfway through 2011, Michigan’s labor market has shown no significant changes since the beginning of the year,” said Rick Waclawek, director of the Bureau of Labor Market Information and Strategic Initiatives for the state. “Since January, statewide payroll jobs were little changed and the jobless rate edged down by two-tenths of a percentage point.”