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Latest post 05-04-2009 2:57 AM by AdolfoM. 159 replies.
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01-01-2001 12:00 AM
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admin


- Joined on 11-22-2008
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2007 Senate Bill 689 (State employment early retirement )
Introduced in the Senate on August 22, 2007, to increase the pension benefits of state employees whose age and years of employment add up to at least 75 and who retire between Nov. 1, 2007 and Dec. 31, 2007 (or later for some employees). The bill would increase the multiplier used to calculate the retirement benefits of these employees from 1.5 percent to 1.75 percent, which would increase the cash portion of their pension benefits by 16.7 percent The vote was 21 in favor, 16 opposed and 1 not voting (Senate Roll Call 284 at Senate Journal 80) Click here to view bill details.
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Admin003


- Joined on 11-22-2008
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Sen. Brater's "no vote explanation"
Senator Brater's statement, in which Senator Scott concurred, is as follows:
I rise to register my deep opposition to this bill. This is a very shortsighted approach. We are still reeling from the effects of the last two rounds of downsizing of state government.
I understand that there are many people on the other side of the aisle for whom this is their exact intention to downsize state government; to continue reducing its scope. Yet when specific services come up in various department, we each have our pet projects and are very anxious to make sure that those services continue, but we seem to have an inability to understand the essential services as a whole when we take this kind of meat-cutter approach.
What we are doing is making the underperformance of state government a self-fulfilling prophecy when we reduce the work force below the level needed to provide essential services. Then we criticize our departments for getting sued, for not doing their jobs, and for overspending their budgets when all they are trying to do is comply with state and federal regulations. We really can't have it both ways.
One of the things I'm very concerned about is that we don't really know what we are voting on here today. Not only, as my colleagues have said earlier on General Orders in a very thorough discussion, we don't know department by department what the scope of these cuts is. We also don't know program by program what we are doing here. We know in certain essential services, as was said in Corrections, and one other example where we know that this won't have the same effect, but there are other essential services. For example, in the mental health field where we've already made such deep, drastic cuts, people with mental illness are not getting services. In the Mount Pleasant Center, 139 of 481 people will be eligible; that's 28.9 percent of that work force; at the Caro Center, 188 of 405; , that's 46.4 percent of that work force; at the forensic center, 170 of 460, 40 percent of that workforce; and the Hawthorn Center which is the only center still open which serves children with mental illness in this state in an inpatient setting, 125 of 214; 58 percent of that work force would be eligible for this early retirement. This list goes on and on. Walter Reuther, 295 of 432; 68percent of that work force.
This is unconscionable. We need to know there's a face on the citizens whose lives are being affected by these types of deep cuts.
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Admin003


- Joined on 11-22-2008
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Sen. Switalski's "no vote explanation"
Senator Switalski's statement is as follows:
This bill starts with the laudable goal of cutting $200 million from the state budget. That would be a good thing if it were a true cut. Unfortunately, Senate Bill No.689 repeats a pattern of behavior that has plagued Michigan's response to its fiscal crisis for six years now. Instead of a permanent structural fix to our deficit, Senate Bill No.689 is again a one-time fix that will cost us more tomorrow than we will appear to have saved today.
How will it cost us more? Well, let me quote from the Budget Office, the head of the retirement system in a letter from August 29, yesterday I suppose "In the next ten years, approximately 50 percent of all active state employees will be eligible for retirement, leads one to question whether an early retirement window is needed." If all of these people are going to be retiring, why are we having an early retirement window? "Most windows end up costing the employer money because employment levels return to their former level much more quickly than expected; vacancies are quickly filled. Two persons are on the health rolls, the retiree and the replacement employee, during the period between early retirement and when the employee would have retired without the window." By my estimate, people could retire as early as age 44. That's 21 years you're caring for them before they are eligible for Medicare. "Retirement costs are deferred to later years, so investment income is foregone." And, finally, "The incentives cost additional money in pension payouts compared with regular retirements, and they are so generous that more people retire than expected or desired."
Early retirement packages only make sense if they are used with the precision of a surgeon's scalpel, but Senate Bill No.689 does not excise a small growth. It takes a meat cleaver to the right arm, lops off three fingers on the left hand, removes the Achilles heel on the left foot, and the right leg at the knee cap. State government will limp on accordingly.
Projections indicate that Senate Bill No.689 will result in a 20 percent cut to the work force of 53,000, which is already 20 percent below the employee levels of 2001, which was after a decade, Mr.President, of John Engler and three years of total Republican control. I say that not for partisan reasons, but to illustrate that 2001 was not an artificially high number of employees. If we really believe state government can function with a 20 percent reduction in employees, we should commit to that. It makes no sense to replace employees lost through early retirement. That is how a budget cut becomes a short-term fix that worsens our structural deficit.
In past early outs, we promised to replace only 1 in 4 retirees. The reality has been closer to 1 in 2. Why will this time be any different? In fact, as you get to a lower level of employees, it gets harder to cut more because you've already cut to the bone. Think of it department by department. Are we going to cut the number of foster care workers who are already staggering under unreasonable caseloads? Are we going to cut the number of representatives available to serve you at the Secretary of State offices? No.We just put through an amendment saying they can't close any Secretary of State offices. Are we going to cut the number of people who issue permits and licenses and forms? Are we going to reduce the number of people who maintain our state parks, our campgrounds, and our trails, picnic and rest areas? Are we going to reduce the number of workers available to administer vaccinations and inoculations to our children? The number of people who follow-up on child support payments and unemployment compensation? The number of workers who are out inspecting our roads and bridges? Are we going to trim people who offer services to the aging, to seniors? I doubt that.
Mr.President, history indicates that we will replace these employees. I would submit to you Exhibit A, which this morning in the Appropriations Committee, right before we voted on this bill, we approved two transfers which would add ten employees to the state. So we are adding employees while on the other hand we are paying employees to leave and saying we are not going to replace them. It shows that these employees are essential; that we can't cut them.
Exhibit B would be the budgets we just passed out of this chamber last week. Those budgets did not reflect cuts in manpower. That's our opportunity to say, hey, we need to downsize state government. Did we cut employee levels? No, we didn't do that.
You do know, Mr.President, what Wall Street's reaction will be to yet, once again, a one-time fix because we've been through that for five years now. We've gone from the highest rating in the state of AAA to now we are AA- with a negative outlook. For six years we've been engaging in these one-time fixes like securitization, raiding the restricted funds, and selling assets and leasing buildings back. Wall Street has criticized this approach and lowered our rating.
If this was a good idea, we'd have met on it, we'd have discussed it, and gone into detail about how this would work instead of moving it through in one day all the way with very little time to consider or debate.
I will say that I find the $200 million estimate of savings wildly optimistic. I would note from the Senate Fiscal analysis that it's based on zero replacements. That hasn't been our history. It's based on the idea that people would retire on October 1 and we would get a full-year savings. Well, that's not going to happen. In fact, the amendment to the bill we put through this morning said they can retire as late as December 31, 2010. So there is very little savings upfront if people choose to take the early retirement, take the sweetener, but stay on the job.
To the extent that people are replaced, this assumes that they are going to be replaced at the minimum wage, at the lowest level for their position. That's not true. We will probably replace people from within by moving people up and then bring in people from outside. So you've got additional bumping increments, and the Senate Fiscal says that, yeah, that will occur, but they don't have a hard estimate of what that will amount to.
There is a huge increase in pension liabilities. I would quote from the pension office again: "This bill significantly increases the pension liability and retiree health care costs that we continue to pay today. If financed over 30 years, the annual payments would need to be $63.1 million and $126 million if everyone took it." $63 million if half take it. In the case of medical, it's $97 million over five years. Those are significant annual costs that will be taken on. I think cumulatively just the medical part is $1 billion by the pension office estimate.
So, Mr.Chair, in conclusion, I think this proposal is shortsighted, reckless, and will cost the state dearly and deepen our structural deficit. I oppose it.
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Admin003


- Joined on 11-22-2008
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Sen. Cherry's "no vote explanation"
Senator Switalski's statement is as follows:
This bill starts with the laudable goal of cutting $200 million from the state budget. That would be a good thing if it were a true cut. Unfortunately, Senate Bill No.689 repeats a pattern of behavior that has plagued Michigan's response to its fiscal crisis for six years now. Instead of a permanent structural fix to our deficit, Senate Bill No.689 is again a one-time fix that will cost us more tomorrow than we will appear to have saved today.
How will it cost us more? Well, let me quote from the Budget Office, the head of the retirement system in a letter from August 29, yesterday I suppose "In the next ten years, approximately 50 percent of all active state employees will be eligible for retirement, leads one to question whether an early retirement window is needed." If all of these people are going to be retiring, why are we having an early retirement window? "Most windows end up costing the employer money because employment levels return to their former level much more quickly than expected; vacancies are quickly filled. Two persons are on the health rolls, the retiree and the replacement employee, during the period between early retirement and when the employee would have retired without the window." By my estimate, people could retire as early as age 44. That's 21 years you're caring for them before they are eligible for Medicare. "Retirement costs are deferred to later years, so investment income is foregone." And, finally, "The incentives cost additional money in pension payouts compared with regular retirements, and they are so generous that more people retire than expected or desired."
Early retirement packages only make sense if they are used with the precision of a surgeon's scalpel, but Senate Bill No.689 does not excise a small growth. It takes a meat cleaver to the right arm, lops off three fingers on the left hand, removes the Achilles heel on the left foot, and the right leg at the knee cap. State government will limp on accordingly.
Projections indicate that Senate Bill No.689 will result in a 20 percent cut to the work force of 53,000, which is already 20 percent below the employee levels of 2001, which was after a decade, Mr.President, of John Engler and three years of total Republican control. I say that not for partisan reasons, but to illustrate that 2001 was not an artificially high number of employees. If we really believe state government can function with a 20 percent reduction in employees, we should commit to that. It makes no sense to replace employees lost through early retirement. That is how a budget cut becomes a short-term fix that worsens our structural deficit.
In past early outs, we promised to replace only 1 in 4 retirees. The reality has been closer to 1 in 2. Why will this time be any different? In fact, as you get to a lower level of employees, it gets harder to cut more because you've already cut to the bone. Think of it department by department. Are we going to cut the number of foster care workers who are already staggering under unreasonable caseloads? Are we going to cut the number of representatives available to serve you at the Secretary of State offices? No.We just put through an amendment saying they can't close any Secretary of State offices. Are we going to cut the number of people who issue permits and licenses and forms? Are we going to reduce the number of people who maintain our state parks, our campgrounds, and our trails, picnic and rest areas? Are we going to reduce the number of workers available to administer vaccinations and inoculations to our children? The number of people who follow-up on child support payments and unemployment compensation? The number of workers who are out inspecting our roads and bridges? Are we going to trim people who offer services to the aging, to seniors? I doubt that.
Mr.President, history indicates that we will replace these employees. I would submit to you Exhibit A, which this morning in the Appropriations Committee, right before we voted on this bill, we approved two transfers which would add ten employees to the state. So we are adding employees while on the other hand we are paying employees to leave and saying we are not going to replace them. It shows that these employees are essential; that we can't cut them.
Exhibit B would be the budgets we just passed out of this chamber last week. Those budgets did not reflect cuts in manpower. That's our opportunity to say, hey, we need to downsize state government. Did we cut employee levels? No, we didn't do that.
You do know, Mr.President, what Wall Street's reaction will be to yet, once again, a one-time fix because we've been through that for five years now. We've gone from the highest rating in the state of AAA to now we are AA- with a negative outlook. For six years we've been engaging in these one-time fixes like securitization, raiding the restricted funds, and selling assets and leasing buildings back. Wall Street has criticized this approach and lowered our rating.
If this was a good idea, we'd have met on it, we'd have discussed it, and gone into detail about how this would work instead of moving it through in one day all the way with very little time to consider or debate.
I will say that I find the $200 million estimate of savings wildly optimistic. I would note from the Senate Fiscal analysis that it's based on zero replacements. That hasn't been our history. It's based on the idea that people would retire on October 1 and we would get a full-year savings. Well, that's not going to happen. In fact, the amendment to the bill we put through this morning said they can retire as late as December 31, 2010. So there is very little savings upfront if people choose to take the early retirement, take the sweetener, but stay on the job.
To the extent that people are replaced, this assumes that they are going to be replaced at the minimum wage, at the lowest level for their position. That's not true. We will probably replace people from within by moving people up and then bring in people from outside. So you've got additional bumping increments, and the Senate Fiscal says that, yeah, that will occur, but they don't have a hard estimate of what that will amount to.
There is a huge increase in pension liabilities. I would quote from the pension office again: "This bill significantly increases the pension liability and retiree health care costs that we continue to pay today. If financed over 30 years, the annual payments would need to be $63.1 million and $126 million if everyone took it." $63 million if half take it. In the case of medical, it's $97 million over five years. Those are significant annual costs that will be taken on. I think cumulatively just the medical part is $1 billion by the pension office estimate.
So, Mr.Chair, in conclusion, I think this proposal is shortsighted, reckless, and will cost the state dearly and deepen our structural deficit. I oppose it.
Senator Cherry's statement is as follows:
Mr.President, I voted "no" on this bill because I believe that it is shortsighted and will do harm to the state of Michigan. This bill cuts employees if it's done in a way that might be intended. It's never really clear as to how many employees will actually be replaced. If all employees are to be replaced, it will cost the state money. It definitely will shift costs from the General Fund to the retirement fund, It seems to be that's something that this body has wanted to reform, and instead, we are adding costs to it.
If employees are not replaced at 100 percent, we are cutting vital services. The Senator from the 10th District outlined what those services will be, but don't assume that this will not have a cost. We have not been doing nothing for four years. We have been making government more efficient with less. You have seen that by the number of employees who have been cut, while at the same time we have been able to provide services, but it has not come without pain and hardship.
We cannot continue to cut the number of employees without seeing services have some effect. This bill will do that if employees are not replaced on a 1-for-1 basis. Again, if they are, it costs the state money. It is not a cost-saving bill. We have done it with less time and attention spent on this. We, in this body, don't even have the bravery to say where we want cuts to be made. We have cut budgets last week without having any ability to say what services are going to be cut. This is just another way to do that.
So I object to this bill being passed. That is why I voted "no."
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Admin003


- Joined on 11-22-2008
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Sen. Scott's "journal statement"
Senator Scott's statement is as follows:
Are we trying to just really cut out state government, period?
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Anonymous Citizen


- Joined on 11-22-2008
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Bill 689- State Retirement Bill
I am an Eligibility Specialist for the Department of Human Services in a Detroit area suburb. In regards to the comment of doing absolutely nothing I would like to enlighten you on some of my job responsibilities. Everyday I assist people with emergency food, medical, evictions, heat and electric shut-offs and many other things that come up. I have a case load size of 635 cases in which the majority have to be completely reviewed every year, averaging 65 a month. I would hardly say that this is doing absolutely nothing. I find it very rewarding to help those in need and have done so for 27 years. I only hope that if you ever have the misfortune to find yourself in the welfare line you will get a caseworker like myself that will treat you compassionately and help you with the benefits you need to get you through a rough time.
One item that is ofen overlooked is that State workers had to work 80 hours and receive pay for 76 hours for 2 years back in 2002/2003. I myself who am 50 with 27 years will be eligible to retire should this bill pass and I am for it passing. For one thing I could never continue to stay if it did pass because with the loss of workers we would absorb the work which increases our case load size. I fully understand that I have been very fortunate to have been employed by the State of Michigan for 27 years, but all I ask is give me the respect I deserve for the job I do, as you receive the respect for the job that you do.
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civilserpent


- Joined on 11-22-2008
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A GREAT way to save money
I've been working for the state for over 30 years. I've watched people retire and I've watched people retire early under Engler. It's a GREAT way to save a LOT of money. I've seen it. You can't argue with me. I'm in it every day. When people leave, things get streamlined, things move around, and the jobs change. Speaking of jobs, people that shoot off their opinion who know nothing about my job could never DO my job, and wouldn't ever WANT my job. Enough said. We deserve to retire. If the state REALLY wants to save money, 0689 needs to become a reality. 2 + 2 still equals 4. Retire 4 of us, and hire one for less - it's simple math. It's first grade math! And I wonder what the holdup is.
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Anonymous Citizen


- Joined on 11-22-2008
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Because of the economy, the State has now gone to a process of "pre-approval" for every item that is purchased for the State. That's good! This ensures that only essential things are being purchased. But someday, as in the past, after the fiscal crisis ends, the floodgates of spending will again be opened up for "business as usual". Why? If the State needs to get lean and run like a business, why isn't there a permanent scrutinization of everything purchased? Why should the State pay for employees' professional dues, conferences, associated travel, and magazines? Why should the State pay for pizza reward parties, eat-in working lunches, etc? Tight spending practices should be the norm. It would save a lot of money.
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drumcoach


- Joined on 11-22-2008
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SB 689 potential cost savings
Re; Senate Bill 689, for State Employees early retirement;
First of all, this will save the state money! There have been several early out retirements in the past (about one very 5 years,) that have saved the state millions of dollars. If this wasn't so there would have only been one and none following it.
Secondly, the State will save money even if they replace most of the workers who retire. How? By saving money on entry level wages vs. the top pay scale that the retiring workers are now paid. Also the retirement benefits have changed for workers hired after 1997. No longer do workers qualify for the defined pension or Tier one retirement system. The defined contribution or Tier Two system will cost the state 7% of a new workers wages, providing the worker contributes at least 3% themselves, while the defined pension, or Tier One pension required the state to contribute 21.5% to the pension fund. this alone would bring substantial savings to the state.
Thirdly, the state needs jobs for our younger workers and even if only 50% to 75% of the workers were replaced, that would give much needed jobs to our younger workers.
And lastly, most of the people who have taken an early out are still working at part time jobs. They are not just lying around doing nothing as some people claim. They are still contributing to the state by paying income taxes and also still paying into Social Security. THe retired workers are able to take these part-time jobs that don't have benefits, which saves money for their new employers.
I urge everyone to contact their Representative and ask them to support this bill.
Jack
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Anonymous Citizen


- Joined on 11-22-2008
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Thank God For Republicans
Yes, I am a state employee also. I need to retire after these many years. Someone else can have my job. Someone young with a family but of course, paid less than me. Hmm...sounds like money saved. I too was a "victim" of Granholm/AFSCME 's plan to be partially paid with vacation time instead of money. Didn't work. We tried to tell 'em - they didn't listen. I watched on TV as "Cool Cities" were getting big checks for being cool - Hey, there's nothing cool about getting shortchanged on your paycheck so your groceries run short and the kids' lunch money gets tight. THANKS AGAIN, but no thanks. Anything Republicans can come up with, I'll buy. Now bring in some young cheaper workers and let me go.
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Anonymous Citizen


- Joined on 11-22-2008
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This is a perfect idea. A friend from work (we are state employees) met up with our rep and he said there'd be no early out because the pension fund had to be built up. Your idea seems perfect, there are many employees here hoping for early retirement. Non state employees reading this, please understand, we deserve this, we work six days a week, not 5. We don't get to do normal things like others because we work weekends, sometimes the work conditons are life threatening and it's hard to get a vacation. When we get a measley 7 or 10 dollar a check raise, the whole state hollers. Our personal business has been posted by the Lansing State Journal, the governor paid us in the past with a few hours of vacation time instead of money, we are constantly mandated to work all or some of another shift and we cannot refuse. We are tired, worn out, and deserve to retire. And just so you know, the retirement isn't THAT great no matter what you've heard.
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Anonymous Citizen


- Joined on 11-22-2008
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Reservist and MDOC employee
Yes, for many selfish reasons I support the early out. As a parole and probation officer for almost 30 years in the job is at least five years to many. Between the job stress and the lack of appreciation from the politicians and taxpayers I am no longer committed to this field or support anyone going into public service. All politicians like to have their picture taken with law enforcement and firefighters etc. during the elections but we are just a bunch of donut eaters if we ask for a raise or benefits. I would leave now but at age 53 but would have to wait until age 60 to collect, so I am locked into waiting until I am 55, eventhough I have 29 years of service. I still care about the job and place the public safety 1st above all, to include my own health at time to say nothing of the stress on my family. While I support the governor on most issues. On this point let us retire, the state can hire new workers and I will find a job with a little less stress. Further, not many people can be involved and effective in the Parole and Probation field over 20 or 25 years, after that I beleive you get diminishing returns.
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rdjactor


- Joined on 11-22-2008
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In my first comment, I asked for anyone who opposes this legislation to provide the hard financial data supporting their position. To date no one has done so. The truth is this will save us money and jobs. The alternative is lay-offs, pay reductions, and bank leave hours for future pay. Each of these has a far greater detrimental effect on our state employees and services than an early out. If this did not make fiscal sense then why do other companies faced with decreased profits and failing sales find it to be such a wonderful solution?
Every legislator who does not support this and then comes to us asking for a pay-cut, reduced benefits, or lay-offs should be re-called.
As for the argument that state employees are at an all time low levels and make too much anyway. Well I say come stand in our shoes for a week and see what it looks like from the other side. In addition, we, as residents and tax payers must admit we can no longer afford the level of services and state employees we currently have, even if we are at all time low levels.
Lastly, this is only one of the many actions that must be taken to bring us back to financial health. The next big step is a truthful and honest inventory of every department, position, service, and its necessity. In my division alone we could save over $250,000 by eliminating politically appointees, their friends, duplicate job functions, and a hierarchy that is top heavy with administration and management versus the actual staff that provides critical services to our States residents.
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