by Gongwer News Service
July 31, 2009

As pressure to shore up a projected $2-billion budget shortfall for next year mounts, important players have started choosing sides over House Speaker Andy Dillon’s (D-Redford Twp.) health care proposal, which he said recently is not only about saving the state hundreds of millions of dollars, but about showing the public that in the midst of a crisis, government can adapt to fix what ails it.

While the largest teachers union, the Michigan Education Association, is still staunchly against Mr. Dillon’s idea to lump school employees’ health care in with other public employee health plans, 12 other school groups threw their support behind his proposal, saying that members of their organizations have the same benefits as teachers and understand major reforms are needed.

“Without meaningful reform, districts will be hard pressed to offer affordable benefits at all in the future,” said Michigan Association of School Administrators Executive Director William Mayes. “We want to reform the system before the system stops working for teachers and kids.”

While Mayes said he and officials from the MEA had met three times, Doug Pratt, communications director for the teachers union, said he could not confirm that those meetings have taken place.

Mr. Pratt said teachers have shouldered $700 million in higher premiums or reduced health care benefits over the past three years and “we’re still here in this same situation.”

He said the MEA would discuss the proposal, but such an open conversation has to be based “around facts.”

Mr. Dillon, reacting to the MEA’s strong opposition, said: “We’re not at war. We are working with them.”

But other education groups called Mr. Dillon’s proposal a “profile in courage.”

David Martell, executive director of Michigan School Business Officials, said although schools across the state have “been in reduction mode” since 2001, there is more to come, with possibly a $600 per-pupil cut by the 2011 school year because of the revenue shortfall and lack of federal stimulus.

And Kathy Hayes, executive director of the Michigan Association of School Boards, said handing off the task of negotiating health care benefits to the state would allow school boards to focus more on educating students.

A spokesperson for Superintendent of Public Instruction Mike Flanagan said he is also supportive of the concept of consolidation.

Other groups supporting the proposal include the Michigan Association of Intermediate School Administrators, Tri-County Alliance, Middle Cities Education Association, Michigan Association for Supervision and Curriculum Development, Michigan Association of Secondary School Principals, Michigan Elementary and Middle School Principals Association, Michigan Small and Rural Schools Association, Michigan African American School Administrators and Michigan Negotiators Association.

But former Rep. John Freeman, a Democratic candidate for governor, doesn’t agree that Mr. Dillon’s idea would be meaningful reform at all. In fact, he said in an opinion column last week, he thinks the proposal is unrealistic and would further burden hard-working government employees.

Mr. Freeman, who is the state director for Health Care for America Now, wrote in a Lansing State Journal column that the proposal would disregard existing contracts for police officers and firefighters, cut benefits to teachers and undermine collective bargaining.

He also criticized the measure for doing nothing to control the costs of health care, nor for helping cover the uninsured residents of Michigan.

“This isn’t real change. It’s the same old song with a different beat. Health care reform is vital for our state. With 1.3 million uninsured Michiganders, we need to focus on how to enable more, not fewer, people to pay their medical bills. But Dillon’s prescription is one we in Michigan can’t afford to fill,” he said.

Another gubernatorial hopeful on the other side of the aisle, Sen. Tom George (R-Kalamazoo), issued a statement as well, ironically less harsh of the Democratic leader.

Mr. George said the plan could achieve some savings, but he criticized the proposal for not putting enough emphasis on healthy lifestyles, which he said would offer the most long-term savings.

The fact that Mr. George, a Republican, was more willing to admit to the cost savings than was Mr. Freeman, a Democrat, is evidence that perhaps the idea of a cost savings could be used as leverage in bridging the gap between spending and revenues that still exists for next year’s budget.

While Mr. Dillon didn’t come right out and say that his proposal, projected to save government hundreds of millions of dollars, would be a bargaining chip in budgeting discussions, the timing of his announcement, combined with the fact that officials are still millions apart on how to spend the budget, is telling.

Legislative leaders and the governor have been huddled behind closed doors for nearly a month debating how to settle a $1.7-billion budget deficit in the 2009-10 fiscal year beginning October 1.

Mr. Dillon, speaking to reporters after a news conference on his health care proposal, said another quadrant meeting on the budget is scheduled, but officials are about $80 million apart on how much to spend out of the state’s main checkbook.

But debating whether or not to cut revenue sharing and the Promise Grants accounts for hundreds of millions of dollars in spending, noted Bill Nowling, spokesperson for House Minority Leader Kevin Elsenheimer (R-Kewadin).

While leaders are officially about $80 million apart on budgets, Mr. Nowling said without Democrats showing how they plan to pay for their proposed budgets, the difference in budgetary agreements is probably closer to $600 million.

As for where Mr. Dillon’s proposal stands, it seems he has more momentum than many cynics originally gave him credit for.

True, some have come out in opposition, but many more have signed on and some very important players have remained silent or seem to be reserving final judgment on the plan.

That includes Governor Jennifer Granholm, who has spoken about the proposal in vague detail and questioned the claimed savings, but who hasn’t really explained her position with any certainty.

In the meantime, Mr. Dillon said he is holding meetings with various labor unions to formulate a governance structure under the single pool plan that could continue the collective bargaining of benefits with the Office of State Employer.

He said he hopes to start circulating legislation by the end of August.

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