Reform demands outlined
Business organizations across Michigan, led by the state's largest chambers of commerce, have sent Gov. Jennifer Granholm and state legislators a list of suggested changes to reform the structure of state government — hopefully before the beginning of the Oct. 1 fiscal year.
The 20 suggestions range from opening a state office to investigate Medicaid fraud to reducing mandatory prison sentences and increasing parole rates for all crimes, plus a number of suggestions related to public employee pay and benefits.
"We are sitting where we were two years ago," said Jared Rodriguez, senior vice-president of government affairs for the Grand Rapids Area Chamber of Commerce, at a press conference in the chamber headquarters last week. He was referring to the state budget impasse two years ago, which some political observers fear will happen again.
“Passing a budget that once again patches things together and kicks the can down the road another year or two would be considered a complete failure of state government,” said Jim Holcomb, vice-president of business advocacy and associate general counsel of the Michigan Chamber of Commerce.
Holcomb was also at the Grand Rapids press conference, one of three held simultaneously in Detroit, Lansing and Grand Rapids last week.
“Michigan’s business leaders expect that Michigan’s elected leaders will go beyond their minimum constitutional duty and set Michigan on a path to reform and revitalization,” said Holcomb.
Other organizations and companies were represented at the press conference by Bill Martin, CEO of the Michigan Association of Realtors; Rob Fowler, president of the Small Business Association of Michigan; Bob Roth, president and CEO of RoMan Manufacturing; John Weiss, president of DesignPlus; and Brad Williams, a director of the Detroit Regional Chamber.
Williams said he was at the press conference in Grand Rapids "to emphasize this isn't a local or a regional thing.”
The following list of suggested reforms was sent to Granholm and the Legislature, although the items are not necessarily listed in order of their priority:
- Pool all health care plans for public employees.
- Establish an Office of Medicaid Inspector General to specifically investigate Medicaid fraud.
- Reform Public Act 312 to change arbitration standards for police and fire.
- Reform Urban Cooperation Act and two other similar acts to eliminate requirement that when a service merger occurs, the higher wage and benefits must be paid.
- Require all new teachers hired by a certain date in the future to have defined contribution, rather than defined benefit, retirement plans.
- Move all administrative functions of local schools to the ISD, leaving local school boards with only academic and athletic functions.
- Privatize food service, mental health services and transportation in prisons.
- Increase minimum retirement/years of service for all public employees to be eligible for retirement benefits.
- Increase state employee and retiree health care premium co-pays.
- Exempt government construction from prevailing wage statutes.
- Eliminate road patrol function of Michigan State Police and let county sheriffs take over that function.
- Require that school districts competitively bid all non-core functions, including transportation, food service and custodial work.
- Reduce the number of school districts.
- Reduce mandatory minimum sentences and increase parole rates for all crimes.
- Make Michigan Promise scholarships a forgivable loan, rather than a scholarship, requiring participants to work in Michigan for two years following completion of their degree.
- Require school employees to pay 25 percent of health insurance costs, saving $650 million, according to the Mackinac Center.
- Reduce state worker benefits to the national average, saving $269 million, according to Public Sector 2008.
- Cap school superintendent pay, saving $6.1 million according to The Center for Michigan.
- Require efficiency studies in all government programs to eliminate waste.
- Eliminate undocumented and potentially fraudulent child care payments, saving $231 million, according to the Auditor General Report 2008.
The Business Journal asked a spokesperson at the governor's office if Granholm had a general response to the list of suggestions.
"The Governor and legislative leaders have been meeting on the 2010 budget and discussing reforms. The Governor is continually interested in reforming and streamlining government," replied spokesperson Liz Boyd.
Holcomb said the speakers at the Grand Rapids press conference may not be in complete agreement regarding each one of the listed suggestions, but the group is united as a whole in support of major structural reform in state government.
Martin said the list presented at the press conference is not all the suggested changes: "There is a much larger list available."
Roth said the suggestions add up to "taking waste out of the system," much like his company's adoption of the lean manufacturing process.
"Let's stop talking about raising taxes or revenues," said Roth.
The press conference did include positive comments on some recent actions in Lansing. Fowler mentioned "bold ideas" brought up lately, including Granholm's closing of state prisons to save money, plus House Speaker Andy Dillon's suggestion to pool all public employees in Michigan in a single health insurance program. And Republican Senate Majority Leader Mike Bishop, according to Fowler, has been leading support for a budget "that lives within its means."
In a letter sent to the governor and Legislature, the organizations noted that "the federal stimulus money in 2010 should not be an excuse to not fix Michigan's underlying chronic structural deficit. We realize that none of these decisions are easy, but they have been put off for far too long and only exacerbate the size of the state's spending-to-revenue gap for 2011 and beyond, when there will be no federal stimulus money."
The letter noted that "many (suggestions) are long-term reforms that may take several years to produce significant savings."