As a senator, I put the long-term economic interests of Michigan first. When I took office, we faced serious challenges, including a $1.5 billion state budget deficit, high unemployment and a failed economic and tax policy, namely the Michigan Business Tax and its surcharge.
We made many tough choices to end the status quo in Lansing and put Michigan on the road to recovery. July’s news about Michigan’s bond rating improving from stable to positive indicates we are on that path, and recent reforms to public sector health benefits costs will help us stay true to a plan for sustained economic prosperity.
In August, state lawmakers finalized reforms to give schools and local governments the tools they need to address the rising cost of benefits. The reform caps public employer contributions to health care costs at a fixed dollar amount, and gives local units the ability to share the costs with the employees at an 80/20 ratio.
On average, private sector workers in the Midwest currently cover 21 percent of the cost of their health care for singles and 30 percent for families. At the same time, the average public sector employee contributes 10 percent for single coverage and 15 percent for a family plan.
It is unfair for taxpayers, burdened with high unemployment and lower personal income, to pay more to maintain public employee benefits. This reform will improve government and school efficiency and bring benefit contribution levels of public employees more in line with those of their private sector peers.
Most importantly, this change will save more than $550 million, which includes savings in upwards of $452 million for our schools. Those are dollars that will stay with the schools and local units of government and can be directed toward improving classroom instruction and keeping our communities safe.
It is an overdue reform that focuses funding on our priorities and helps address Michigan’s long-term budget sustainability.
Darwin L. Booher
State Senator – 35th District