Governor Granholm’s retirement proposal for State Employees is running into opposition.  The House of Representatives refused to vote on House Bill 5954 this week.  The House and Senate will only meet three times before the 2010 spring break which means the governor’s original plan to allow eligible employees to retire between Aril 15 and May 15, 2010 is over.  This is because the state constitution requires this bill to pass out of the House and sit on the Senate floor for five days to allow a “cooling off” period and/or time for Senators to think things over.

The governor’s plan is very controversial and is an opportunity for state employees to have influence and get involved in the debate and the legislative process by writing, emailing, and calling State Representatives and Senators.  The UAW Local 6000 Legislative team has already testified in the House Oversight and Investigation Committee regarding the retirement bill.  On March 23, 2010 the team will testify in the Senate regarding the companion Bill 1226 – this will occur AFTER our rally and we encourage all rally participants to attend the hearing (on the 3^rd floor of the State Capitol in the Senate Appropriations room).  The Senate will be told the dignity of our work force must be maintained and it is not fair to change the rules for thousands of hard working public servants at the end of their careers. 

It is crucial to continue speaking out against Resolution 35, which is the attempt to take our 3% raise because the Senate Republicans and big business are making a full-court press to take the raise and violate our bargaining contract.  Do not let them be successful in their attempts to isolate the Senate Democrats who have stood up for and defended us.

These reasons are part of what makes YOUR attendance at the rally on March 23, 2010 at 10:30 a.m. on the front steps of the east side of the State Capitol so important. 

Business Leaders for Michigan?

 By Gloria Emmons  DHS-DDS

 On February 19, 2010 Kalamazoo Gazette offered a viewpoint from Bill Parfet, one of the CEO's that are involved with "Business Leaders from Michigan ". In his missive he states that two generations ago Michigan was a top ten state for economic growth and that for the past generation we lagged behind the nation as we have become economically poorer, smaller and less competitive. This generous, wise group known as,” Business Leaders for Michigan " has laid out a plan on how to turn our state around.    

Changing the way the state manages its finances:

Nowhere does this group take any of the responsibility for the state that Michigan currently finds itself in. Michigan thrives on tax revenues.When more taxes are coming in from more places then individual taxes can be lower.  Does it make sense when business leaders, in order to make excessive profits, send good jobs offshore to Mexico and Third World countries? Unemployed people and empty facilities do not pay taxes.  

Unemployed people do not buy as many goods. However, these CEO's  continue to make profits and bonuses off the goods that they produce (or have produced) out of the country and import back into the United States for us to purchase. The state of Michigan does not get revenues on the factories, the goods or the wages that are paid to foreign workers.  How can the state forecast revenues when these same said business leaders are involved in mass lay off s? Mass layoffs look good to Wall Street. The price of your stock goes up. Will companies like Steel-Case, MPI give the state a two year warning so they can properly be prepared? If they could then the State could prepare for those newly unemployed employees as they will most likely seek unemployment benefits and  food stamps. Others might need housing assistance while others might need  medical assistance....Thus, the state has to foolishly waste its money on these people that our businesses dropped without warning. Much like people who drop unwanted pets off in the country-  Once they are out of sight and then out of  the minds of the past employer. All the while thinking that someone else will take care of them. Its not our worry. In the last 10 years how many jobs have our business leaders for Michigan cut?... And now that they've cut most of the jobs they want to continue their feast of excessive profits by giving themselves a 1.1 billion dollar tax cut.

 Rightsizing and enacting structural budget reforms: 

Budget rightsizing  this learned group stated should address public employee’s compensation and benefits.  The state work force is now the smallest it has been in a decade. Two decades to be precise. This group believes number of state employees should be cut by 10%. Charles Ballard, a Michigan State University economist who has studied Michigan ’s economy, has noted that state employees earn less their private sector counterparts. State employees with bachelor's degrees earn seventy-two cents for every dollar that a private sector worker with a bachelor degree. State workers with the master degrees earned sixty-two cents to the dollar. State employees saw a 2.4% cut in wages from 2008 to 2009. Health benefit co-pays of also went up with the monthly cost at family coverage more than doubling. Michigan State ’s employee workforce shrank by 11,000 or 18.1% between 2001- 2008. In 2001, 62,057 people worked for this the state. By 2008 that number shrank to 50,799.The state work force was at its peak in 1980s when its members numbered around 70,000 employees. Altogether, the state employees through various cuts had saved Michigan $3.7 billion. This came thru by having savings of 3.3 billion in wages,143 million in pension costs and 300 million in health costs. Michigan is already cutting the state employee workforce to the bone. When you keep trimming away, all it affects the quality of life and your professional reputation to provide for your citizens. These cuts effects the type and quality of state employees that the state attracts. Look at all the problems that happened this year at unemployment agency. Imagine it now  with 10% less staff.  One of our state agencies was levied a very hefty fine in the hundreds of millions because its resources were spread so thin. The backlogs are so high that  more than one child died child in our state.Yet, these business men call for 10% reduction in staff.  Also, it should be know that when average state employee wages are quoted in the papers, the statistician is likely to roll in the salaries of the doctors, the dentists, the lawyers, the psychologists and agency directors. These people make 2- 3 x what the average state employee makes.

When I first came to work for the state of Michigan thirty years ago, Michigan ranked in the top ten states for wages.  We are now in the bottom,  Alabama  now pays more. 

 Getting Michigan competitive to attract and retrain jobs.

 We had great jobs, so why did your companies send them to China and Mexico where the average wage is under 5 dollars a day? Its hard to compete with that. Your view point seems to indicate that if companies had to pay less tax they would be happier. My Son, when he got his first check, was outraged that they took taxes out. Business leaders seem to be the same. All of you are business leaders should figure out how to be competitive... Hint the answer is not right sizing state workers.  

 Making Investments that create a great job environment.

 Now where is that money supposed to come from? Business leaders and companies don't want to pay it. They seem to forget that the biggest investment is in human capital. If you do not capture a child's imagination when they are younger, you have lost them. Teachers can only do so much. Most of their day is taken up with non teaching activities and paperwork. Our students are behind in math and science. As well as most other academic subjects. It seems that it is more important to them that we have new schools with atrium's and single light fixtures that cost over 30,000 a piece. Not to mention football fields with professional stadium quality lighting and audio systems.While having really high quality collegiate  style sport uniforms.   WE  seem to focus more money on things, than their actual education. If we wait until our students are in college to get them interested in careers and work, the damage is done, the twig is bent, the cradle rocked. Europe spends more money on our equivalent of 1-12 then we do. And they spend much less on universities. It cost only 5,526 dollars a year to go to Cambridge in the UK . That is what community college cost a year here.... Someone is getting cheated and it is not the students in Cambridge . Our roads have been bad for a long time. We just ignored them by putting the minimum top coating on them so it looked like the were repaired. Fixing roads cost tax money. Yet no one wants to pay tax money. The roads were also better when done by state of Michigan employees. They are now done by for profit contractors. If the roads get bad they can just patch them up again. Companies keep fighting ergonomic standards to prevent employee’s getting hurt. Does any of the corporations have any idea how much carpal tunnel syndrome cashiers get from scanning groceries all day. Wouldn't that be a good investment? 

 Accelerating job growth through innovation and entrepreneurship;

 You offer a plan to fix Michigan . That is quite noble, as most of you helped destroy her. You did not reinvest in your companies but took compensation packages that bled your companies. We have always read where workers are being asked for concessions. When is the last time a CEO gave anything back? Your companies buy other companies.Then a large group of people are left jobless. No Jobs are created. Yet, enough money is somehow made for every one get an extra bonus. . You ask for tax breaks then leave for other countries. Older unemployed workers that are 55-60 years of age are left in your wake with no where to go. Their pension plans are left unfunded. The government has to makeup the shortfall. Pensions are now worth only two cents on a dollar. These workers  are often left without insurance. Most thought they had a job for life. The government  then takes care of them one way or another. Medicaid, Medicare, sometime food stamps. Oh and another job the government does-it buries the dead no one wants.

Your group says it is doing this for the younger workers early in their careers. I believe that some of you are already aware that our children don't seem to have the loyalty to companies that their parents or grandparents did. They talk about careers in terms of  a few years or months. They don't like working overtime. They want more time off to live life. Innovative companies like Zappos and Google will lure our children.They keep reinventing themselves and the workplace. 

 Everyday I deal with those people thrown on the refuse pile because their company has closed. These people are afraid of losing their homes. They are ill because they can not go to the doctor. Their medical benefits went with the plant closure. They are depressed and suicidal. Some break down crying on the phone, when all I asked was, "tell me what kind of work you did?"   

The same people you believe should be right sized by 10% takes care of these people and their families on a daily basis. When the economy is bad we are called on to do more with less.  Big business and banking have caused this mess that the State of Michigan is in. When is the last time someone asked one of your group that. Why  is it always the employees and the government that is asked to do so.  

Invest your talent with the state of Michigan…. The rewards are enormous!                                                                       

                                                by Miya Williamson, Financial Secretary Treasurer

            Fasten your seatbelts here we go again!  If you haven’t been keeping up with the latest, the State of Michigan is attempting to attract newer, younger, and more talented workforce.  The headline you see is taken directly from the states web site for Civil Service job openings. ( http://www.michigan.gov/mdcs) OK let’s get down to business dissecting this puppy. 

            Invest your talent with the state of Michigan – code phrase  for spend approximately 30 plus years dedicated to serving the citizens of Michigan and you can look forward to some pretty enormous rewards (see below).  Also code phrase for run for the hills because your talents are not appreciated by those in power.

            The rewards are enormous- code phrase for the legislature and Governor will kick you out before you’re ready and leave you blind and toothless via taking away your vision and dental benefits upon retirement.  Also code phrase for Senate Republicans will try to take away your hard earned and negotiated 3% raise and slap the newly acquired talent with a health care plan that will bankrupt them.  Oh don’t forget when you begin to get to top pay there will be another plan to attract an even younger and more talented work force to buy the same line and even more enormous reward.

            Feeling rewarded yet?  Even better - are you blown away yet?

I grew up in Detroit, in a city that was composed of a variety of different ethic, racial and cultural groups. It seemed that each entity had its own special foods and customs, and each tried to hold onto part of their special identity. But I found that one value transcended each neighborhood, ---a person’s word was reliable, was golden.

If you told a neighbor you would watch his house, you did. If you hired the man down the street to lay cement, you sealed the deal with a handshake and your word. I remember my father telling me “you fight to keep two things—your good name and your word. With out those two you are nothing”.

I went to work for the state. And I remember the selection process, filling out the application, and being interviewed. And when I was hired, I was given a run down on the wages, benefits and retirement plan. These were all available to me and would be mine, if I did my job and fulfilled the requirements of the position.

Like thousands of state employee, I agreed to work hard, give my labor to the state, follow policy and procedures and in return we would have a secure job, good benefits and retirement. We went to work daily helping the state perform its functions. And as times became more difficult, we were asked by the Governor to “go the extra yard” and we did; working with exploding workloads and fewer resources. When asked by the Governor to help with the state budget crisis, we voluntarily took days off, worked with no pay.  Governor Granholm praised the dedication of the state workforce.

Now Governor Granholm is turning her back on the state’s “agreement” with workers and seeks to unilaterally change the retirement plan. She is hoping that the state legislature will follow her lead and break the state’s promise to thousand of workers.

Shame on you Governor Granholm! We held up our end of the deal –we work hard providing state services. Now instead of looking at real solutions to the state fiscal crisis, you come after your own employees.  Instead of looking at the massive overspending in state contracts or closing tax loopholes or even restructuring the state tax system, you choose to lead the charge to renege on a promise made 30 years ago.

Shame on you Governor Granholm--“you fight to keep to things—your good name and your word. With out those two you are nothing”.

Alan J. Kilar, editor

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A Tax on Working Families Benefits – A Wrong Direction

By Alan J. Kilar 

A tax on middle-class health benefits is the wrong way to finance health care reform. The U.S. Senate health care bill, the Patient Protection and Affordable Care Act (H.R. 3590), would tax plans worth more than $8,500 per year for individuals and $23,000 per year for families. (For workers in high-risk occupations and for retirees 55 or older, the bill would tax plans worth more than $9,850 for individuals and $26,000 for families. And in 17 high-cost states, thresholds would be increased by 20 percent in 2013, 10 percent in 2014 and 5 percent in 2015.)

The tax would hurt one in five workers with health benefits and more over time.This would amount to an enormous tax on workers’ health care benefits. The Senate’s benefits tax would affect 19 percent of workers with employer-provided health coverage in 2016, according to the Congressional Budget Office (CBO). The international benefits consulting firm Mercer similarly estimates that the tax would hit a fifth of all employers after it becomes effective in 2013.

More and more workers and employers would be affected in subsequent years because the threshold amount at which the tax applies would rise at a much slower rate than plan costs are expected to rise. The CBO projects that revenues from the proposal would increase by 10 percent to 15 percent over the second decade. So over time, the tax would hit lower and lower cost plans.Whether health benefits are taxed has little to do with generosity of benefits and more to do with industry and geography.

The tax would affect many plans that have relatively high costs for reasons that have nothing to do with the generosity of benefits. According to Linda Havlin, a partner with Mercer, “It’s important to note that not all the plans that would be subject to the tax are particularly generous. There are other factors besides plan design that drive up cost.”

In fact, according to a recent study published by the prestigious journal Health Affairs, only 3.7 percent of the variation in the cost of family plans can be explained by benefit design, and only 6.1 percent can be explained by benefit design plus plan type (HMO, PPO, POS or high-deductible). The same Health Affairs study found that two powerful variables explaining the variation in premiums among plans are industry (which may capture characteristics such as health status) and the cost of medical inputs in particular geographical areas, both of which are beyond a firm’s control.

According to the actuarial consulting firm Milliman, “whether someone hits the [excise tax] ceiling is not so much driven by benefit richness as it is by age, gender, profession, health status and the geography of the covered population.”

The tax would result in increased costs to workers and benefit cuts.

For some workers, the benefits tax would mean higher premiums, as insurers increase premiums by the amount of the tax.

For the majority of affected workers, however, the benefits tax would mean higher out of-pocket costs, as employers avoid the tax by offering health plans that increase cost sharing and cover fewer services.

According to a Mercer survey of 465 health plan sponsors, 63 percent say they would cut covered benefits to avoid paying the excise tax, 23 percent would maintain their current plan and pass along the tax to their employees and only 2 percent would absorb the new tax themselves.

Also according to the Mercer survey, 7 percent of employers would terminate their plans altogether in response to the tax. Of small employers, which typically offer only one health plan, 9 percent would terminate their plans, potentially forcing their employees into the individual market.

Professors Joseph White and Timothy Jost conclude that “the excise tax is simply a fallback cost-control method that targets beneficiaries: If health care costs rise too quickly, the federal government will slash health insurance benefits for people in the employer-based system, even if costs are high because of the need for care.”

The benefits would thus violate the fundamental commitment of health care reform that workers should be able to keep the health care coverage they have now.

One of the principal goals of health care reform is to guarantee quality, affordable health care for working families as health care costs spiral out of control. This benefits tax, by contrast, would raise health care costs for workers, including some of the most vulnerable workers—workers in small firms, workers in firms with sicker employees and workers in firms with older employees.

Advocates for the benefits tax argue that it would be a “win-win” for workers, since employers would replace lost health benefits with increased wages .

However, the Mercer survey found that “less than a fifth of respondents (16 percent) say they would convert heir cost savings into higher pay.” It is especially unlikely that retirees whose benefits are cut to avoid the tax would see any corresponding increase in wages.A benefits tax will not lower health care costs.

Advocates for the excise tax also argue that it is essential to “bend the curve” of health care costs and expenditures. However, a recent report by the Commonwealth Fund found that “there is little empirical evidence that such a tax would have a substantial effect on health care spending.”

The key to reining in health care spending is to get providers to deliver care in more cost effective ways. Increasing out-of-pocket costs for workers may actually lead consumers to forgo necessary care and make counterproductive health care decisions. There are better ways to pay for health care reform. The U.S. House bill pays for health care reform through surtax on the very wealthiest earners, who benefited so much from Bush-era tax cuts, not through a benefits tax. The House bill gets it right.

In short, the Senate’s benefits tax would shift costs onto the backs of workers, it is unnecessary, it would be politically disastrous, and there is very little evidence that it would have a substantial effect on national health care spending. 

So what can you do? 

 Call or email our US Senators and tell them “no tax on our benefits”. Call Senator Debbie Stabenow: 133 Hart Senate Office Building ,Washington, DC 20510 Phone: (202) 224-4822, e-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it   Sen. Carl Levin; 269 Russell Senate Office Bldg, Washington, DC, 20510, Phone (202) 224-6221, email: levin.senate.gov/contact/