Tagged: state employees

The Michigan Court of Appeals says the Legislature violated the state constitution by illegally taking money from state employee paychecks to cover retirement health care costs.

State employees are in line to get back $60 million dollars that was withheld from their paychecks if this decision stands.

The court of appeals says then-Governor Jennifer Granholm and the Legislature could not take three percent of state employee salaries for retirement costs after lawmakers failed to block three percent pay raises.

The pay raises were approved by the independent state Civil Service Commission, and could only be reversed by super-majorities in the House and Senate.

The appeals court said that was just another way to take away the pay raise, and violated the process set up by the state constitution.

Governor Rick Snyder says the money is needed to help cover a shortfall in the state employee retirement fund. He could ask the state attorney general to appeal the decision to the Michigan Supreme Court.

*Correction - an earlier version of this story incorrectly stated that the current Michigan legislature and Governor Snyder "adopted the plan earlier this year that requires state employees contribute 3 percent of their paychecks toward their retirement health care costs."

The plan was adopted under a previous legislature and then-Governor Granholm.

The headline has been changed as well. (previous headline "Court rules Michigan legislature and Gov. illegally quashed pay raise").

We regret the error.

The Central Michigan University Faculty Association organized a work stoppage on the first day of classes yesterday after they said the CMU administration was not bargaining with the union in good faith.

CMU officials filed in injunction and a judge ordered the faculty members back to work (state employees are not allowed to strike under state law).

The dispute is over cuts to salary and benefits.

Now, a fact finder has been assigned to help the parties resolve the dispute. From a CMU press release:

The Michigan Employment Relations Commission has appointed Barry Goldman to oversee the fact finding process involving the CMU Faculty Association and Central Michigan University.In addition, hearing dates of Sept. 7, 9 and 13 have been accepted by both parties. Fact finding is a process in which an impartial party is assigned to hear both the university’s and the FA’s positions and then render a recommendation on a collective bargaining agreement. Both the FA and CMU filed petitions for fact finding July 14.   

CMU spokesman Steve Smith says Goldman will listen to both sides on the hearing dates and will later issue a recommendation.

Governor Rick Snyder’s administration and state employee unions have begun a new round of contract negotiations.

The Snyder administration has set a big savings target -- $265 million - or an average of about $6,000 per state worker.

Jan Winter is the governor’s lead negotiator. She says saving $265 million in employee costs will be tough.

“Go the table, work as hard as you can. A lot of things can happen and we’re counting on working out good deals here.”

Winter says one idea is to ask state employees to pay more for their benefits.

“One of the things that we have looked at, clearly, moving to something like an 80/20 split on a health plan would mean well over $100 million in gross savings. We have a lot of ideas, and we’re hopeful the unions have lots of ideas, too.”

Cindy Estrada is the lead negotiator for UAW Local Six Thousand, the biggest state employee union.

She says workers are also looking to fix the state’s budget troubles.

“We want to create a Michigan, a state that in 10 years to come is more efficient, has better quality for the citizens that receive those services, and I think we can do that – if workers and management get together and we look for new solutions and we be really creative and stick to the commitment that we’re going to make structural changes, we can get there, definitely.

But Estrada says the savings should not come out of state employees’ benefits or paychecks since they’ve given up nearly $4 billion in concessions over the past decade.

The unions say state government could find big savings if it reduced the number of managers and outside contracts.

Governor Rick Snyder’s administration and state employee unions will open contract negotiations this week. The first topic of bargaining will be whether state workers will give up the salary and benefits they’ve already been promised.

The new state budget is not balanced yet. For one thing, the budget assumes millions of dollars in savings in employee costs. State state worker unions have yet to agree to those cuts. In fact, the state can’t even begin to negotiate unless the unions agree to re-open the current contracts. Kurt Weiss is with the state Department of Technology, Management and Budget.

“We know it’s a significant number. We know it’s a painful number.”

Weiss says the alternative to concessions is layoffs and privatizing services. The largest amount of money would come out of the state Department of Corrections.

State employee unions say state government is currently top heavy with managers and has too many contracts – and the Snyder administration should look those first before looking to squeeze more from frontline workers or lay them off.

Governor Rick Snyder is asking state workers to be patient as his administration tries to set Michigan’s fiscal affairs in order.

The governor sent an e-mail to state workers last week saying he does not want a Wisconsin-style confrontation. The e-mail was sent to 50,000 state employees.

Governor Snyder promised to work within the collective bargaining process on concessions to help balance the budget, and he complimented state workers on their dedication and creativity.

He specifically said,“Michigan is not Wisconsin,” and “tough decisions do not have to be polarizing.”

The governor said his goal is to stabilize Michigan’s finances so state workers don’t have to negotiate new concessions in the future to help address a financial emergency. And, Snyder hinted that future changes to public employee compensation might be in store. He said some public employees are overpaid, some underpaid, and he has some ideas on correcting that.

A study commissioned by a union-backed think tank says reports that state and local government employees in Michigan are overpaid compared to workers in the private sector are wrong.

The study is by the Washington D.C. based Economic Policy Institute.

It says college-educated public employees earn 21% less than private sector workers with degrees.

It also found local government workers were compensated at about the same rate as their private sector counterparts.

Jeff Keefe is the Rutgers University management and labor relations professor who conducted the study:

"So the study concludes that state government employees are under-compensated in the state of Michigan, while local government employees are neither over- or under-compensated in the state of Michigan."

The report takes into account education, salaries, and benefits.

Ethan Pollack, with the Economic Policy Institute, says employee compensation is not the biggest factor behind the state’s budget trouble:

 "Michigan isn't significantly different than the deficits you are seeing all across the country…This is not about over-compensation of public sector workers. This is [about] two things. The cyclical deficit is from the recession, and the structural deficit is health care costs."

The Economic Policy Institute says its seven-state study found growing health care costs, and not employee compensation, are the biggest factor in budget deficits.