Talk About A Conflict Of Interest

January 27, 2004
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The headline topping a news analysis in a recent edition of one of the region’s daily papers read: “2005 State Budget: More Cuts On The Way.”

The article said the Granholm Administration assumes it faces another $1 billion shortfall. It said the governor instructed staffers to make deeper budget cuts, but to keep their blades off K-12 and health care. Instead, she has indicated they instead ought to target universities and local governments.

We’re not impressed.

Lansing’s Medicaid reimbursements already have dropped into the realm of indecency, forcing hospitals to shift costs to the private sector. That, in turn, has inflated private sector health insurance premiums, causing the dilution or loss of many private sector workers’ health coverage.

Such tactics are behind-the-scenes tax increases, a hallowed Lansing tradition to which this administration seems likely to cling. A local CPA, Paul Hense, brought two such ploys to light last year. One, which legislators blocked, was the attempt to levy 50 percent penalties against small businesses that were late in filing state tax returns.

Later the Michigan treasury department in effect demanded that tax preparers file business returns electronically starting this spring. Otherwise, treasury warned, clients could face long, long and harassing delays in processing. Hense saw the move as treasury’s way of shucking administrative costs into the private sector.

What other “cuts” may come our way? Might the governor, for instance, persuade the legislature to delay the scheduled 2003 state income tax cut for yet another six months?

Well, as politicians say in election years and at budget time, tough times call for tough decisions. Well, here’s a real tough one we wish Lansing had the sand to make.

As recently revealed in these pages, Michigan government this year is paying 35 percent above its current payroll to finance its platinum-plated health care program for retirees. That huge surcharge on the state’s single biggest budget item — its payroll — has accelerated for five years.

It soon will accelerate beyond control if the governor and legislators don’t act. No, we don’t recommend that they terminate retiree benefits. No court would sustain such an act.

But they can modify current civil service health benefits, thus alleviating the cost of health insurance for the next retirees. Lansing should throw the meat on the table by opening negotiations with employee unions for higher deductibles, higher employee shares of premiums and modest reductions in benefits.

We don’t think it will happen, though — and not because it’s a Democrat vs. GOP thing.

It’s government vs. the people; civil service vs. John Q. Taxpayer

Lansing is populated by career politicians and bureaucrats convinced that the public owes them a comfortable living. We just can’t see legislators tackling this issue. They probably could handle the furor from employee unions. But our courageous, tough, cost-conscious guardians of the public tax dollars are about as likely to cut their own health care benefits as they are to vote against their own pay raises.

That’s why, when we mention this issue to area legislators, they get glassy-eyed, mumble that the issue hasn’t come up, and either change the subject or walk away.

Well, we’re bringing the issue up. If they don’t address it now, within a few years it will erode the fabric of the state.    

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