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    A little spending sanity please?


    By Nick, Section News
    Posted on Thu Aug 30, 2007 at 07:34:27 AM EST
    Tags: (all tags)

    There's been so much going on with European vacations, jaunts to the middle east, budget bills that approve wild spending and Presidential Primary politics that it's easy to forget sometimes that there's still a battle raging in Lansing not over how much the Democrats are going to raise our taxes but over how much we can responsibly cut and reform in state government to make sure taxpayers get their money's worth.  

    There's a great op-ed piece in this morning's Detroit News that paints quite the picture in one area that's already garnered a bit of public attention but still hasn't received demonstrable action in the legislature.  The issue of public school employee benefits.  

    In a special to the News, Mike Reno, a trustee at the Rochester Community Schools takes the debate a step further than what's typically discussed on the subject.  While political observers now know that the state could save somewhere in the neighborhood of $200 million a year just by sourcing the way we purchase insurance differently, Reno argues that moving public teacher benefits in line with the best the private sector has to offer wouldn't only provide significant further savings, but it'd be the only way to respect parents and taxpayers.

    Read on...

    His preference is a move to a 401(k) type program, like most in the private sector (and state employees) and that school boards should adopt some changes in co-pays and deductibles to restore a little fiscal sanity to our kids' districts.  Because the way things are going, we're not only out of step with the private sector, we're out of step with the rest of the nation.  According to the piece:

    Despite what school officials want you to believe, Michigan legislators have made education a funding priority. Michigan would rank sixth nationally if looking at the percentage of total state and local taxes dedicated to education. Nationally, the average is 32.3 percent, and in Michigan it's 37.1 percent.

    And when you break it down a little further...

    Benefits spending in relation to total taxes is even more alarming. For every $100 Michigan collects in state and local taxes, $7.53 is used to pay for benefits. Nationally, it's $5.13 out of every $100. That difference represents over $1 billion annually in above-average benefit spending in Michigan...

    Clearly this is still going to be a tough one for the legislature to tackle.  Any time you deal with benefits you open yourself up to the charge that you're attacking employees or that you're mean or that you just don't really care about people or that you're not serious about education or that you hate teachers or that... well... you get the point.  

    But when we're talking about a billion dollars being spent above and beyond what other states are spending for the same service that's called an outlier.  And there's a lot of room there for change without even removing our best-in-class status.  

    Will it make the MEA happy?  Yeah, no.  But state Reps and Senators aren't elected to serve the MEA.  They're elected to serve the voters and the taxpayers and with numbers like these it's clear there's a disconnect.  Compare these benefits to private sector benefits and it's even more pronounced.  

    The state spends 25% MORE to provide health-care benefits alone, according to a Michigan benefit-consulting group.  That's not competitive.  And with a budget deficit over a billion dollars we can't afford it.  

    Keep best-in-class.  Continue to provide better for our great educators than the other states.  Just add a little sanity to the approach.  Please.

    Sanity's something that's severely lacking these days.  Look no further than Mark Brewer's boy John Edwards' statement a couple days ago that he'd tell people they weren't allowed to drive SUV's, regulating away the Big 3's most profitable vehicles and throwing a good-sized monkey wrench into their comeback efforts.  

    Not what they need as performance reports start to emerge from the last quarter, indicating Chrysler didn't perform as well as they had.  According to the Associated Press:

    DaimlerChrysler AG and its former partner Chrysler posted weaker results in the second quarter as their trans-Atlantic union dissolved, but executives said Wednesday they're optimistic about the rest of this year despite a sales slump in the U.S. market.

    Sell them while you can, boys.  There's an entire political party out there gunning for you and every manufacturing job in Michigan.

    And speaking of their leader, Edward's buddy Geoff Fieger is in the news again today and probably will be every day until his case is resolved.  Yesterday wasn't that day, despite his best efforts.  The FREEP reports:

    "Under local rule .... The text of a brief supporting a motion or response, including footnotes and signatures, may not exceed twenty pages," U.S. District Judge Paul Borman wrote in an order striking the brief. He also noted that the type size and spacing on the brief violated court rules as well.

    Fieger's motion and the brief supporting it was 31 pages and included another 100 plus pages of exhibits. Fieger's legal team is drafting a request today asking the court for permission to exceed the 20 page limit, said Thomas Cranmer, one of Fieger's lawyers.

    One-hundred-thirty-one pages.  Instead of twenty.  In a motion to dismiss the charges.  Sounds like Geoff was trying to argue the entire case in the motion phase.  

    Fieger-time finds himself under a pretty serious indictment for illegally funneling $127,000 into the Edwards for President campaign.  Serious charges.  So Edwards returned the cash, right?  Oh, right, sorry.  He refuses to return the cash.  

    But the Democrat establishment is up in arms over this gross ethical violation.  They take money laundering and federal indictments seriously.  And they've got LOTS to say.  Here's a sampling of Dem response to Edward's refusal to hand over the money at the center of the massive federal investigation.

    Democrat National Committee:  crickets chirping

    Michigan Democrat Party: crickets chirping

    Democrat POTUS Candidates:  crickets chirping

    Regressisphere: crickets chirping

    Huh... aren't these same groups all up in arms over every single alleged ethical violation (even when it isn't illegal, like Fieger-time's money laundering) in the GOP?  Well, at least they're consistent in their inconsistency.

    < Michigan Pro-Lifers in Action III: Taking on Granholm's DCH regarding Abortionist Robert Alexander | Early primary moves through House despite Edwards / Stupak efforts to disenfranchise millions >


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    Odd (none / 0) (#1)
    by NoviDemocrat on Thu Aug 30, 2007 at 10:01:11 AM EST
    I wonder how Toyota, Honda and all of those other companies manage to succeed selling non-SUV products. Might be something to think about.

    • Odd... by John Galt, 08/30/2007 10:05:01 AM EST (none / 0)
    • unions by prattleon, 08/30/2007 12:16:13 PM EST (none / 0)
    401k is no panacea (none / 0) (#3)
    by NoviDemocrat on Thu Aug 30, 2007 at 10:21:31 AM EST
    Switching retirement plans from defined benefit to defined contribution only guarantees you the certainty of the cost each year. It doesn't guarantee a lower cost for retirement costs and in years when the market is doing well, it can cost more to fund a DC plan than a DB plan. The only way to get lower costs over the long-term is to cut benefit levels.

    Outside of some abuses of the retirement system by double-dippers, the real costs in employee benefits are not retirment benefits, they're health care and retirement health care benefits. Again, the only long-term way to control costs is to cut benefits.

    Sorry... (none / 0) (#4)
    by Nick on Thu Aug 30, 2007 at 11:00:17 AM EST
    $200 million a year (EVERY YEAR) by sourcing it differently sounds like real and significant long-term savings to me.

    What's the source (none / 0) (#6)
    by NoviDemocrat on Thu Aug 30, 2007 at 12:23:42 PM EST
    of your claim that switching plans will save over $200 million a year?

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