GOP budget plan could cut faculty salaries
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State Rep. Joan Bauer, D-Lansing
Mike Bishop
Following last week’s announcement that Michigan will face a deficit as much as $1.7 billion next fiscal year, lawmakers from both sides of the aisle are searching for a solution to the state’s budget crisis.
Because federal stimulus dollars are drying up, lawmakers have to erase the deficit without much assistance, which could mean cuts affecting MSU faculty and students.
Michigan Senate Republicans proposed a budget plan Tuesday that would save the state between $2.24 billion and $2.6 billion, said Senate Majority Leader Mike Bishop, R-Rochester. The savings would be made with government reforms and cuts, including a 5 percent pay cut to all state employees, including MSU faculty and staff.
“The Michigan economy requires huge and immediate attention to the size of our government and the cost of our government,” Bishop said. “We have to stop treating the symptoms and treat the disease itself, and we believe that is the cost of government.”
The public servant pay cut would save an estimated $1.2 billion, Bishop said.
State Rep. Joan Bauer, D-Lansing, held a town hall meeting Tuesday night to address Michigan’s budget crisis and said raising revenue is the only long-term budget solution.
“We absolutely have to raise revenue in some way in our state,” she said.
Bauer, who chairs the Higher Education Appropriations Committee, said because higher education was so drastically cut in the 2010 fiscal year budget, the only remaining area to cut is need-based grants.
“Our financial aid already we went from $140 million to $80 million,” Bauer said. “Next year, if there is no money left in higher education, the only place you can maybe still cut is more financial aid.”
She said she wants to close tax loopholes, extend the sales tax to services and raise taxes to generate revenue for important services including universities and college scholarships.
However, Bishop said the Senate won’t pass any tax increases.
“Raising taxes when Michigan families and job providers are struggling is wrong,” Bishop said. “The people want a more efficient government that spends less money.”
Bishop’s plan also would save as much as $500 million in Medicaid costs by cutting optional services such as dental and chiropractic and eliminating some Medicaid recipients, such as 18-21 year olds. The plan also would reduces the number of state departments from 15 to 11 with an undetermined savings.
But if the state passes a 2011 fiscal year budget without new revenue sources, it would start the next fiscal year about $500 million in debt, said Mitch Bean, director of the House Fiscal Agency.
A viable long-term solution for Michigan’s budget crisis would include both new revenue sources and reforms, MSU economics professor Charles Ballard said.
“We have to do structural reforms all over the place and find new revenue,” he said.
If not, there will be a state budget crisis every year, Ballard said.
“The point I keep emphasizing is that because of structural defects in our tax system, (it) collects a smaller percentage of our economy year after year,” he said. “Those kind of cuts might get us through one budget year and then because of the erosion on the tax side you’d be back to another budget crisis.”






Commentary
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MSU Employee
(01/20/10 10:35am)Report
What Sen. Bishop may not realize is that most MSU employees are working under union contract. Each union at MSU would have to approve the changes to the contract in order to take effect.
Are you serious?
(01/20/10 10:42am)Report
Our “leaders” need to look in the mirror first. How about cutting the LIFETIME HEALTHCARE BENEFITS of state legislators that have served only SIX YEARS???????
Lucius
(01/20/10 11:15am)Report
State Legislators could set the moral tone here by agreeing to their own salary/benefit cuts, or better yet, changing their postions from full-time to part-time — something that would have substantial economic benefits and enormous symbolic benefits.
It won’t happen, of course. That kind of honor and self-sacrifice is something we’ll never see from an American politician — of either party, at any level — ever again.
Fine but.....
(01/20/10 1:37pm)Report
In principle, cutting state workers pay by 5% would be fine IF everyone is happy with services being cut by 5% also. Thus, we should expect 5% less of an education, 5% worse roads, 5% less effective fire-fighters, etc.
Statist News
(01/20/10 2:11pm)Report
The anti-liberty liberal propaganda machine is greased and oiled I see. The Board of Trustees (6 democrats, 2 republicans) and the unions are the only ones with the absolute power to lower faculty salaries. All the legislature can do is make approprations with what little money this state has.
Just so everyone knows, at least 30% of MSU is international students now, so who exactly are we appropriating this money for? It’s not Michiganders for much longer, that’s for sure.
Equal
(01/20/10 2:17pm)Report
Cutting salaries 5% equals a %5 increase in taxes, which Senate Republicans don’t support…
OK, but...
(01/20/10 3:24pm)Report
MSU workers aren’t technically considered state workers…
JRS
(01/20/10 3:26pm)Report
MSU employees are not state employees despite getting some
funding from the state.
Hey "Statist News"
(01/20/10 4:23pm)Report
Out of state students, including international, pay WAY more tuition than any in-state students. Even a racist like you should greet them with open arms.
EMPLOYEE
(01/20/10 4:44pm)Report
This is wrong, misguided, and unfair. Unbenownst to most, MSU employees have been making wage concessions and agreed to pay more of their health care costs for the last 8 years. Given the annual rates of inflation, in essence, the employees here have not had a raise in almost ten years. We have been sacrificing as everyone has. You can’t just look at wages you have to look at buying power against the rising cost of everything. Once again let’s balance the budget on someone else’s back. I agree with the above poster.We need a part time legislature because they do part time work. Serving as an elected official was meant to be temporary service, not a career and it was never meant for elected officials to get lifetime retirements and cadillac health care for life at the public’s expense. All retirements and “retirement” health care for legislators should be eliminated immediately. And term limits are a joke as they are currently structured. You can serve two terms in the hose, then run and get a senate seat. Diane Byrum is a perfect example. I’m guessing you can probably run for the house seat again afterwards and just go back and forth through the loophole. Wake up People of Michigan. All incumbants need to go. And Mr. Bishop, who might run for Attorney General, should think seriously about his chances before committing political suicide.
RU Confused?
(01/20/10 5:42pm)Report
Michigan State University isn’t the same entity as State of Michigan, folks.
Me
(01/20/10 9:58pm)Report
Two things —- a fairly small increase in taxes on the people in Michigan who are doing ok would close the budget shortfall. The Republicans don’t want to raise taxes because their big donors are RICH! Raising the income tax on the richest 1/4 isn’t going to hurt the unemployed and people not making it in this economy. Look around, plenty of people in Michigan can afford nice new cars and other luxuries, while we let the state crumble.
Point two —- as an MSU employee, I got to say, yes average wage increases have been right about the inflation level, but employees who have moved up in job rank or have had decent performance reviews have made pay gains in the last several years. Also, MSU has been giving decent average faculty pay increases. If you freeze or even cut faculty and staff pay, I don’t think you’ll see many additional people leave. However, good faculty are fairly mobile —- they can find jobs elsewhere (and take their grants with them). If you let the University itself deteriorate good people will leave.
Clarifications
(01/21/10 10:25am)Report
A few things.
1. This WOULD impact university employees. Generally, Michigan’s universities, are granted autonomy by the state constitution. However, what Senate Republicans are actually proposing is a constitutional amendment that would reduce the salaries of all public employees in the state by 5 percent. The State News doesn’t really explain this. Such an amendment would have to be placed on the ballot in November.
2. Lawmakers salaries are currently set by the State Officer Compensation Committee. Last year they voted to recommend a 10 percent reduction for future lawmakers, and SOCC approved that. In addition the 5 percent cut being proposed as a constitutional amendment would apply to lawmakers as well.
yes, you too
(01/21/10 1:26pm)Report
1. MSU employees are ‘state employees’ in the same way public school employees are ‘state employees’. The taxes collected by the state treasury and distributed by the legislature are the lion’s share of the salary budget. Know where your money is coming from.
2- The legislature does have the power to unilaterally reduce the salaries of ‘state employees’, including themselves. They can do this without contract ratifications, as the new constitutional provision they enact would supercede the contract language specifying wages.
3 – it is unlikely this will come to pass, as it is a minority (Republican) led effort.
Reality
(01/22/10 1:59pm)Report
Can you imagine if this went through? Chances are all unionized public employees would strike and the state would come to a grinding halt.
Tezcatlipoca
(01/27/10 11:32am)Report
THEY NEED TO CUT THE CHICANO/LATINO STUDIES PROGRAM. AND WHILE THEY ARE AT IT THEY SHOULD CUT JSRI!
THE REAL CHICANOS STUDIES PROGRAM!