Retirement Incentive Plan Approved

By: The Associated Press
By: The Associated Press

Michigan lawmakers approved a retirement incentive plan for state government employees late Thursday, a key step toward finishing a government spending plan for the fiscal year that starts Oct. 1.
The retirement proposal, which could save the state around $80 million in its first year, is a large part of a plan to erase a projected $484 million deficit for next fiscal year.
The retirement plan would allow eligible state employees to retire later this year with slightly better pension benefits. Those who stay on the job would be required to pay 3 percent of their salaries into retiree health care plans for three years.
That's a compromise that helped win the support of House Republicans, though many Democrats -- who hold the majority in the House -- remained opposed to the plan because it's drawn criticism from union leaders.
The bill passed the House by a 60-45 vote and cleared the Republican-led Senate by a 20-14 vote. Senate Democrats would not support a motion to give the bill immediate effect, which could delay implementation of the plan. But lawmakers have time before next week's budget deadline to clear that procedural hurdle.
Senate Republican Majority Leader Mike Bishop and Democratic House Speaker Andy Dillon were optimistic that the rest of the budget would fall into place next week.
"Now that this is done, we can get the other (budgets) moving," Dillon said.
Earlier Thursday, Gov. Jennifer Granholm signed budget bills for community colleges, state police and other Michigan agencies.
The Legislature has not finished budgets for universities, transportation, human services and a few other departments. But lawmakers appear to be on track to finish the budget before next week's deadline, which they have failed to do in two of the past three years.
Under bills signed into law Thursday, Michigan's 28 community colleges will receive the same amount of money they now get from the state for basic operations next budget year. Although some, including Montcalm Community College and the Wayne County Community College District, will lose reimbursement payments related to special tax zones.
The next Michigan State Police budget should not result in any state trooper layoffs or post closings.
Granholm also signed budgets for the Department of Agriculture, Department of Education, the Department of Military and Veterans Affairs and the state court system.
Granholm said in a statement that the bills "protect funding for critical priorities." A few weeks ago, the governor signed a bill that should protect Michigan's public schools from budget cuts.
Michigan's economic troubles and tax policy changes have caused revenues to state government to fall for the past few years. The state has been made its budget balance, as required by the Michigan constitution, with the help of extra federal aid.

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  • by Ricardo Location: Lansing on Sep 24, 2010 at 12:21 PM
    J makes a very good point. All of these "special" handouts are just a prop to keep who knows how many government employees on the payroll? If the federal government would stop coughing up tons of money (that they don't have), and the state would eave the local communities alone by making even more money available(that THEY don't have either), these assinine special interest projects would evaporate, and the economy would be forced to adjust downward. (as it must do). The financial system needs to be left alone to catch it's breath. All these slush funds do is prolong the eventual economic reductions in the cost of government operations that MUST occur! Thank you Ricardo
  • by JML Location: Lansing on Sep 24, 2010 at 10:05 AM
    Anyone see the "legislative" state emp retire plan? SB1500 MUCH SWEETER deal for the legislative, Office of the Auditor General, employees of the office of the Gov, Judicial,or unclassified employee within the civil service. Everybody but an "executive" employee in which you have been hearing on and in the news recently. This bill is EVIL! 1. The combined age and length of service is equal to or greater than 75 or if 20 years of service the combo needs to be equal to or greater than 65. (the state retirement bill is 80 years!!!!!). 2. The multiplier is a WHOPPING 1.75 (the state retirement bill is 1.6 or 1.55 depending on the combo of years and service up to $90,000. There is NO $90k CAP for these employees. 3. There is NOTHING in the bill that has these employees contributing 3% to so called health care.The legislature is at it again. They have no problem screwing the thousands of regular executive state employees while making sure they protect their own The legislature is at it again. They have no problem screwing the thousa
  • by J on Sep 24, 2010 at 09:02 AM
    And when the extra fed money is gone... cut and/or eliminate those programs. I'm already hearing about the "budget hole" that we'll have next year. No we won't... if the money is not there, the program shouldn't go on. Plain and simple. They just re-instated medicaid services for some because of fed money. Next year they won't have it... cut it again! As for employees... it's time you looked elsewhere. I don't care if you're private or public employees...they have been hit hard enough and been the scape goats of the Governor and the Legislature long enough. And remember... there are non union employees who just got screwed over double. Don't lump them all together anymore. It's not equal.
  • by Dorothea Location: michigan on Sep 24, 2010 at 07:44 AM
    I retired as of sept.1st.So are they retiring with 1.6 like we did or are they getting more than that? If so not will not be fair.I retired after 35 yrs.And if that is the case then we should get what they are going to be getting.
  • by zippiez Location: lansing on Sep 24, 2010 at 07:39 AM
    Why no pay cut? Employees will have to pay federal, state, and local taxes on the 3% they don't get! That's why! Thanks for nothing again worthless State Legislature!
  • by CJ Location: Haslett on Sep 24, 2010 at 04:29 AM
    Why don't they called it a 3% paycut for employees due to the financial crisis. Why try to bury it in a retirement program?
  • by D Location: Lansing on Sep 24, 2010 at 04:25 AM
    So is this going to end up in court like the teachers retirement plan?
  • by George Location: Jackson on Sep 24, 2010 at 03:13 AM
    So are the legislators also going to pay their 3% toward healthcare?
  • by Anonymous on Sep 24, 2010 at 12:30 AM
    If the unions do not like it, it must be good for the state.
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