News Story

'Budget Cut' Doesn't Mean the Same Thing to Public and Private Sectors

Leon Drolet says there is a communication gap between the private and public sectors when it comes to the definition of “cutting a budget.”

“Government employees have a very different definition,” the president of the Michigan Taxpayers Alliance said. “Government claims to cut its budget every year, but spending never goes down. Citizens spend less when they cut their own budgets. This is part of a language gap that exists between government workers and citizens.”

A recent example is Warren Fitzgerald Public Schools Superintendent Barbara Van Sweden, who told the Macomb Daily that school districts have resorted to “disguising” the impact of annual budget cuts so that more students don’t flee to a different district. Yet, Van Sweden’s district general fund expenditures increased every year from 2005 through 2010. In fact, according to the financial audit on the school’s own website, general fund expenditures climbed from $27.01 million in 2005 to $33.82 million in 2010.

Van Sweden didn’t respond to an email or phone message left at her office.

A Warren Fitzgerald teacher who had six years of experience with a bachelor’s degree would have earned $53,672 in 2005-06, according to the union contract. That teacher would have had a 7.4 percent raise for 2006-07, a 7.3 percent raise for 2007-08, and a 6.5 percent raise for 2008-09, leading to a base salary of $66,048.

That district would have paid 100 percent of the premium for health care insurance for that teacher. According to a Kaiser Foundation survey of employers in Michigan, the average employer pays only 80 percent of the cost when they offer health insurance to employees, with the employee expected to pay the remaining 20 percent.

In the Macomb Daily, Van Sweden suggested that school officials should take a stand against the new governor’s plan to cut funding by $300 per pupil.

“There comes a time when you have to say, ‘This is it.’ And we’ve reached that point,” Van Sweden said in the article. “Because we’re the ones who face the kids every single day.”

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.