State Address Raises More Questions For Budget

The Michigan Capitol is shown at twilight Thursday, Sept. 24, 2009, in Lansing, Mich. Lawmakers continue work on budget bills that deal with a $2.8 billion shortfall before an Oct. 1 deadline. (AP Photo/Al Goldis)
By  | 

"The path to a bright future is based on all of us contributing to the solution," Gov. Rick Snyder said during his speech Wednesday.

During his address on the state he also said Michigan had a "unsustainable financial model."

One solution to this model may be cutting the cost of non-salary benefits of state employees. According to Michael Jahr, Senior Director of Communication at the Mackinac Center for Public Policy.

Jahr said benefits like pensions and employee contributions to health-care offer opportunities for the state to save.

"That alone would save 5.7 billion dollars," Jahr said. "For example there are 551 school districts in Michigan in 300 of those school districts teachers do not pay anything toward their health insurance, everybody in the private sector contributes to their health insurance."

But economists believe it's not just about benefits and when you include salary, balancing government compensation with the private sector is not so simple."

"The managers, the technical people, a lot of those people receive a lower compensation package than they could get in the private sector," Charles Ballard said.

Ballard is an economics professor at Michigan State University. He admits some state employees do well but thinks this could result in the state having unqualified workers.

"Some of those people still work for the state because they have a sense of mission," Ballard said. "They believe in the job, they want to provide services but the further you push them with compensation my fear is that it will become difficult to find the qualified people."