’Tis the Season to Give. Back.

by Tom Shields
December 16, 2009

Recently, Secretary of State Terri Lynn Land announced plans to consolidate a number of offices into more regionally focused, customer-oriented branch offices. Lawmakers were heard bellowing about “losing” their local SoS offices.

As local governments and schools districts come to grips with the reality that the money once there is no longer, they have tried to avoid layoffs by offering furlough days and benefits reductions as options — most often rejected by local unions.

It’s tough to blame union officials or lawmakers for fighting for the people of their districts. It’s our natural inclination to fight for what we have and to never take a step backwards. Once we get something, we don’t want it taken away.

But at what point in time did a government program, job or benefit become sacrosanct? These are not written on tablets of stone and passed on to future government bodies.

Over the past year alone, while we have lost some 300,000 jobs in Michigan, including 20 percent of high-paying construction and manufacturing jobs, the number of people employed in government jobs has remained virtually unchanged.

As incomes continue to fall and tax income continues to plummet, government must finally wake up to the fact that it is not immune to the effects of the economy. While some want to raise taxes to protect the status quo, the public has no appetite for new taxes, and in some cases no resources to pay even if the appetite were there. The stark reality: too many families are one tax increase away from foreclosure, and too many businesses are one tax increase away from laying off more employees, or shutting their doors altogether.

Now is the time for state and local governments and school districts to take a hard look at the cost of the public sector and how it can be reined in.

Detroit Mayor Dave Bing said it best in response to the pushback he was getting from the unions in his efforts to balance the city’s books. Bing said people need to stop seeing government as a job provider, and instead see it as a service provider.

Most government wage scales are probably not out of line with the private sector. But government can no longer hand out benefits to employees while saddling the taxpayers with debt they will never be able to pay.

For years, the state, many local governments and school districts have handed out benefits and retirement bennies like they were running someone else’s candy store. Unable to afford raises, they doled out retirement benefits they stuck to the next generation of taxpayers and government officials. Early retirements, healthcare coverage, and pensions were a lot easier to negotiate away when they didn’t come out of the current budget.

The bills have now come due.

While the state finally moved away from a pension system that embarrassingly paid some legislators more than they ever earned while serving, many local governments and school districts are stuck with pension programs they can’t afford, or lifetime healthcare benefits that will need to be funded by future revenues.

Studies peg the State’s current obligation for healthcare benefits for state and school employees alone at $40 billion. There are more than twice as many local government workers.

Michigan’s constitution protects pension obligations to government employees. So, if we are going to start turning the ship around, it has to start now with current and new employees.

Private businesses are quickly moving towards average health insurance copays of 25 percent and eliminating pensions for defined contribution programs. Government needs to follow suit.

Oakland County has done just this by shifting employees to a 401(k)-type plan, and has used bonds to fully fund healthcare obligations. Every government in the state would be wise to heed Oakland County’s example.

Public support for increased revenues will be scarce until there is confidence that government is running as efficiently as possible. That said, government efficiency and government trust remain oxymoronic to most taxpayers.

It seems every day we open the paper — or our computers — to read about some abuse of taxpayers’ dollars by government employees. The Detroit Pension Fund Board members with their no-show jobs and exotic travel schedules. The Wayne County treasurer trying to collect a $70,000 bonus for collecting back taxes. Just two examples of improprieties that drive taxpayers crazy.

Just to be clear, misbehavior is not limited to metropolitan areas or one political party.

In little old Eaton County, the sheriff quit his post for a month last December — just after being re-elected — to enable him to collect his $60,000-a-year pension plus his $82,000 a year salary when he started his new term in January. Sheriffs of four other counties followed suit.

The Eaton County Road Commission provides full healthcare benefits to its commissioners, despite the fact they only work about 15 hours a month. When the chair of the road commission recently was asked to justify benefits unmerited by 15 hours a month of service and which taxpayers cannot afford, he simply replied that benefits can’t be taken away from someone.

Well, excuse me. If not now, when?

Tom Shields is founder and president of Marketing Resource Group (MRG), a Lansing-based political marketing and public relations firm.