What Public Employees' Benefits Cost Taxpayers

By: Jamie Edmonds Email
By: Jamie Edmonds Email

Depending on how long you've worked for the state, local government, or school, you are entitled to retiree health benefits and a pension and those things don't come cheap to the state.

In fact, Governor Rick Snyder said in his budget presentation Thursday, that Michigan owes about $18 billion in future obligations to both.

When you factor in total compensation for all of the state's public employees such as health benefits, pensions, time off, sick leave, you get a giant price tag said Jack McHugh of the Mackinac Center for Public Policy. He said taxpayers end up footing the bill for at least in part.

"Michigan public employees collect fringe benefits that extend what they would be in the private sector by $5.7 billion per year," McHugh said.

Calculating for just the difference between what all public employees get in benefits over what the private sector receives, the Mackinac Center said the average Michigan resident pays $580 per year.

"I think if you asked most Michigan residents are you willing to write a check in order to give public employees $580 more than what you get, most would say I don't think so," McHugh said.

"I'm not really sure how they come up with that figure," Ray Holman of UAW local 6000 said.

Holman represents state workers, and he said members have given up $750 million in concessions since 2003.

"New employees as of April pay 20 percent for health insurance, plus a majority of state workers are now in a defined contribution plan, which is like a 401k pension plan," he said. "It's not true state employees have lavish pay and Cadillac benefits."

McHugh would have to disagree, saying that's why the governor is asking public employees for more concessions and contributions to their own health care costs.

The Mackinac Center's statistics account for all public employees, including state, and local government, plus school employees from Kindergarten through the collegiate level.

The governor's office did not have a similar study looking at what the average Michigan resident pays, neither did Holman.

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  • by Tim Location: Kalamazoo on Mar 24, 2011 at 01:56 PM
    I wonder, what are the salary and benefits for the Mackinac Policy Center? They claim they are a non-profit and they accept no government funding, stating "Committed to its independence, the Mackinac Center for Public Policy neither seeks nor accepts any government funding. It enjoys the support of foundations, individuals, and businesses who share a concern for Michigan's future and recognize the important role of sound ideas." Isn't it ironic that they continue with a mantra of "privatize" everything, and that government employees receive too much. Ask some hard questions about this information, their agenda is clear. They are not an unbiased body reviewing the benefits, they are representing a private business management perspective. Sad.
  • by swissin Location: Jackson on Mar 9, 2011 at 04:18 PM
    Pensions it has been at least 13 years since the state has had pensions. The state no longer has PENSIONS GET OFF THIS I WORK FOR THE STATE ALL WE HAVE IS A 401K NO PENSIONS TIME TO CATCH UP WE DO NOT HAVE PENSIONS!!!!!!!!!!!!!!!!!!
  • by ang Location: charlotte on Mar 5, 2011 at 07:08 AM
    I don't think my work I do, as a government employee, should be devaulued because Mr Snyder made a promise to "reinvent" Michigan. You can't tear something like government completely down and expect things to go well. We all work very hard just like any other worker. I applied, interviewed, applied again for SIX YEARS before I got a job. It was not given to me, I don't get "special treatment", I pay for health insurance, I pay towards my own 401k, I don't get a pension and I pay taxes just like everyone else. People like to complain when they say tax dollars pay our salary. How about the companies that pay their employees salaries? Should they be treated poorly for employing people to help the business? Just because we are PUBLIC employees doesn't mean we should be getting hurt over and over again. We deserve respect for once. Respect for what we do, what we accomplish and the fact that we work to make the state run as smoothly as possible. Stop putting us down and saying we caused this
  • by Craig Location: Eaton Rapids on Feb 24, 2011 at 05:09 PM
    These figures are an "average" of all public sector vs all private dector jobs. This is a Apples to oranges comparison and is purposly misleading. Most state employees are Skilled educated people ( Doctors, Teachers Plumbers, Refrigeration mech, Electricians)Not shop rats and burger flippers. in short - it is Total Spin.
  • by local on Feb 23, 2011 at 11:33 AM
    I am not convinced that this group is working with the most recent figures. Most public employees I know (teachers, state workers, MSU staff) are paying a big chunk of their health insurance and pension...and have been for years. Maybe we should look into some of private industry's perks and benefits...and how our taxpayer dollars were provided to them through bailouts and government contracts and how it is misused in the name of "business."
  • by lynn Location: Lansing on Feb 23, 2011 at 10:33 AM
    I would ask then, what does it cost the tax payers for the salary of the Legislatures along with their lavish pension and health care coverage? They exempt themselves from every HB/SB that affects all the other public employees. When a legislative body works parttime at best and draw the salary of fulltime person, only has to fullfill one term and then they reason that salary in a lifetime pension, something is wrong. No other state/public or private pensioner can do that, unless you own the company. No other private, public or state employee can receive a 38% pay increase, unless you are our legislative body. Wonder what they are getting this year?
  • by Anonymous on Feb 22, 2011 at 08:41 PM
    What's so hard to understand about how much the benefits that (most, not all) union employees cost their employers, the taxpayers and/or the consumer. Some of these people get 5 weeks paid vacation, several paid holidays, a dozen sick days and better then average health benefits. They work for 20-25 years and retire at 45-50 and want a pension so they can live at the same standard of living as while they were working, until they die at, what's the current life expectancie 75-ish?. That's not too much to ask for is it? /-50 years of income and health care for 20-25 years of service (minus 6-8 weaks a year in vacation, holiday, sick and personal days). Oh not to mention that some of these postions are no more difficult or demanding than the thankless jobs many teenagers start out with, while wearing a paper hat. When the States, the Schools, the Feds, GM, or whoever are out of money it's just hard for me to see how anyone can justify some of the pay and benefits that are expected.
  • by Ahmed Location: Lansing on Feb 22, 2011 at 12:18 PM
    I find the whole thing baffling. Am I to understand that a state with a 45 billion budget cannot handle a payout of 18 billion dollars over a 50 year period? That's like saying Bill Gates cannot take out an auto loan on a used car. Why is the study combining state,local gverment and school benefits? Aren't state benefits a state issue and local government a local issue? Do state employee's even get pensions anymore? Is there such a thing as private sector firefighters and police departments? Do private teachers, get more money than their public conterparts? How could they even come up with figures like these? Why do contracted IT state workers always get such high salaries? Are contracted government employees consider state employees? To sum up: What?
  • by Bill Location: Delta Twp. on Feb 22, 2011 at 12:03 PM
    Mr. Gov. and staff, do your homework. The only state workers that are overly compensated and are a burden on the budget are the "good old boy, fat cats" that do nothing but pretend to supervise the real workers. Most were promoted because they played the game or golf to work their way up. The same ones that did nothing when they were first hired. Leave the real working state workers alone. And no I am not a state worker but I know many that are hard working and dedicated to this state.
  • by working for the public Location: Lansing on Feb 22, 2011 at 09:08 AM
    Without government workers, you would not be able to get your car registered, your driver's licence, your birth or death certificates, your WIC and Medicaid benefits, and all of the other services that state workers provide for the public. Oh, and you would not have a lottery to gamble away your money on.
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