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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