Leaders of multiple statewide business organizations came out in one voice in calling on Gov. Jennifer Granholm and state legislators to significantly structurally reform state government.
“Michigan’s government is out of step with the real world,” said Chris Fisher, president of Associated Builders and Contractors of Michigan. “The state has run out of Band-Aids, and if things continue as they are, we may never stop the bleeding.”
“Passing a budget that once again patches things together and kicks the can down the road another year or two would be considered a complete failure of state government,” said Jim Holcomb, vice president of business advocacy and associate general counsel of the Michigan Chamber of Commerce. “Michigan’s business leaders expect that Michigan’s elected leaders will go beyond their minimum constitutional duty and set Michigan on a path to reform and revitalization.”
The major business and trade organizations joining the call for reform include Associated Builders and Contractors of Michigan, the Michigan Association of Realtors, the Small Business Association of Michigan, the National Federation of Independent Businesses, Detroit Renaissance, the Michigan Manufacturers Association, the Michigan Association of Home Builders, the Michigan Bankers Association, the Michigan Chamber of Commerce, the Detroit Regional Chamber, the Grand Rapids Area Chamber of Commerce, the Lansing Regional Chamber and the Kalamazoo Regional Chamber.
The list of suggested reforms for consideration include:
- Exempt government construction from prevailing wage statutes.
- Pool all health care plans for public employees.
- Establish an Office of Medicaid Inspector General to investigate Medicaid fraud.
- Reform Public Act 312 to change arbitration standards for police and fire.
- Reform Urban Cooperation Act and two other similar acts to eliminate the requirement that when a service merger occurs, the higher wage and benefits must be paid.
- Require all new teachers hired by a certain date in the future to have defined contribution, rather than defined benefit, retirement plans.
- Move all administrative functions of local schools to intermediate school districts, leaving local school boards with only academic and athletic functions.
- Privatize food service, mental health services and transportation in prisons.
- Increase minimum retirement/years of service for all public employees to be eligible for retirement benefits.
- Increase state employee and retiree health care premium co-pays.
- Eliminate the road patrol function of the Michigan State Police and let county sheriff’s departments take over that function.
- Require that school districts competitively bid all noncore functions, including transportation, food service and custodial work.
- Reduce the number of school districts.
- Reduce mandatory minimum sentences and increase parole rates for all crimes.
- Make Michigan Promise scholarships a forgivable loan, rather than a scholarship, requiring participants to work in Michigan for two years following completion of their degree.
- Make school employees pay 25 percent of health insurance costs (a tax savings of $650 million, according to the Mackinac Center for Public Policy).
- Reduce state worker benefits to the national average ($269 million in savings – Public Sector Consultants, 2008).
- Cap school superintendent pay ($6.1 million – The Center for Michigan).
- Require program efficiency studies in all government programs to eliminate waste.
- Eliminate undocumented and potentially fraudulent child care payments ($231 million – Auditor General Report 2008).
In a letter to the governor and lawmakers, the group expressed that more than ever, Michigan’s business community is united in its call for serious, significant, structural reform of state government to pull Michigan out of its chronic fiscal crisis. Business organizations representing employers large and small across the state are speaking with one voice to demand that this moment of crisis be turned into an opportunity to reform and revitalize Michigan.
Although the various organizations supporting the effort see various degrees of merit in the individual reform proposals, the group made clear that not acting will be considered a failure on the part of the governor and Legislature.
Associated Builders and Contractors of Michigan hailed the state House’s passage of legislation to enhance the state-mandated high school curriculum as a major step toward helping all students prepare for the future job market.
“The change will help prepare students for good, stable jobs in construction and other industries,” explains ABC President Chris Fisher, adding that demand for skilled construction workers is expected to grow in Michigan during the next decade.
House Bill 4410, introduced by Rep. Joel Sheltrown, D-West Branch, would allow for a career technical education option that may be counted toward a high school diploma.
It sailed through the House in a 97-10 vote in early September.
“This bill is an important step toward ensuring that Michigan’s high school students graduate with marketable job skills and are ready to fill the jobs of retiring workers,” Fisher says.
The Michigan Merit Curriculum, adopted in 2006 for graduates beginning in 2011, is geared mainly toward students who plan to pursue a four-year college degree. The goal of Sheltrown’s legislation is to make the curriculum flexible enough to include technical and trade offerings as well.
“Our member contractors are fearful of a shortage of qualified laborers,” says Fisher. “We need to be able to replace an aging work force. The bill offers an integrated curriculum toward a high school diploma that will enhance the Michigan Merit Curriculum with tougher and more relevant standards than Michigan has had throughout its history in order to help meet such needs.”
ABC was the lead business group advocating passage of the legislation.
On Sept. 10, an ABC-opposed effort to expand the state Prevailing Wage Act failed to pass by a single vote in the state Senate.
Had it passed, it would have for the first time expanded Michigan prevailing wage requirements to privately owned projects that receive grants through the Michigan Economic Growth Authority.
Currently, the state prevailing wage act extends only to public projects.
“Extending prevailing wage mandates into the private sector is a significant departure from the intent of the law and would have hampered Michigan’s economic competitiveness,” says Chris Fisher, president of Associated Builders and Contractors of Michigan.
In a mostly party line vote, the measure failed 19-17. The only senator crossing over to vote in favor of the measure was Randy Richardville, R-Monroe.
ABC of Michigan was on hand for the vote and offered thanks to the senators who opposed the amendment: Allen, Cropsey, Jelinek, Patterson, Birkholz, Garcia, Kahn, Sanborn, Bishop, George, Kuipers, Stamas, Brown, Gilbert, McManus, Van Woerkom, Cassis, Hardiman and Pappageorge.
Those in favor were Sens. Anderson, Clark-Coleman, Jacobs, Scott, Barcia, Clarke, Olshove, Switalski, Basham, Gleason, Prusi, Thomas, Brater, Hunter, Richardville, Whitmer and Cherry.
“The closeness of the vote reinforces the need to be politically active and ensure that allies of the Merit Shop are elected,” observed ABC President Chris Fisher. “Without the efforts of ABC and ABCMI PAC, the outcome would have turned out quite differently, to the detriment of Merit Shop firms statewide. This is the reason that ABC members need to be politically active by donating to the PAC.”
Next year, 30 of 38 state Senate seats will be open because of term limits, meaning that the body’s political makeup could go either way.
Politically, the stakes have never been higher than they will be in 2010, with not only the Senate critically close but with the governor’s race potentially even closer and more than half of the state House seats opening up as well. “Now more than ever, it’s time for ABC members in Michigan to ‘Get into politics or get out of business,’” Fisher stressed.