Governor Looks At Public Employee Compensation

In his executive budget, Gov. Rick Snyder recommends reforms to the compensation offered to employees by Michigan’s state and local governments. Considering that employment costs are a primary reason why government continues to grow, this is a commendable move.

To get employment costs under control, the budget calls for some changes:

  • About $180 million in employee concessions with the state government’s unions. While there are fewer state employees today than a decade ago, increased employment costs negated all of the net savings of a smaller workforce.
  • Providing an incentive for local governments that follow “best practices.” While Gov. Snyder will highlight his preferred policies in March, here are some employment practices that should be emulated.
  • A school district that asks its employees to pick up a larger share of their health insurance costs will be eligible for a piece of a new $300 million incentive.
  • While the governor called for prefunding the state’s health care benefits for retirees, he also recommends reducing the benefit.

All of these pieces begin to address the growing disparity between public and private employees at all levels of government in Michigan. But this only broaches the subject of bringing benefits in balance. Even more should be done.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.