Department of Education to Investigate the U? Click Here for Details
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Forced unionization bringing lots more money from employees to union bureaucrats Click Here for Story
The state’s teacher retirement system continues to increase burdens on taxpayers and local school districts. The costs exploded in the recent years, and without substantial reform there is no reason to expect that trend to change.
The explanation isn’t hard to find: Since 1988, the system has been close to “fully-funded” in just three years, all in the high-growth 1990s. Its unfunded liabilities are now $17.6 billion. To put this into perspective, it would take roughly all of the state’s annual tax revenue to fully fund the system.
School districts are required to contribute an amount to the retirement system based on their payroll expenses. The money is used to prefund benefits earned by employees during the year, pay the health care bills of current retirees’, and to “catch up” at least a little on the system’s unfunded liabilities.
The upward trend of these payments is striking: In 1984, they cost just 3.22 percent of school payroll expenses. Today they swallow nearly 25 percent of payroll.
This problem can be contained. Adopting the reforms made to the state pension plan is necessary to ensure that the state fix this problem over the long-term. Both taxpayers and public schools would appreciate this.
Seriously, how about all those who have given up or whose unemployment ran out? Click Here for Details
The Michigan Democrats’ plan to pay college tuition for Michigan students claims that “governmental belt-tightening has come only via state employees, who have given back over $500 million in concessions.”
But James Hohman, fiscal policy analyst at the Mackinac Center for Public Policy, questions where the concessions show up in the state workers’ compensation data.
In 2001, the state paid $3.9 billion to 62,057 full-time employees, an average of $63,474 in total compensation for each employee. In 2011, the state paid $4.7 billion to 47,818 full-time employees, meaning total compensation per worker jumped to $97,883. The Mackinac Center received the compensation data in a Freedom of Information Act request from the state’s Civil Service Commission.
When adjusted for inflation, the state spent $4.8 billion in 2001 on employee compensation and $4.5 billion in 2011 despite having 23 percent fewer workers. Average compensation increased from $78,999 in 2001 to $94,888 in 2011 when adjusted for inflation.
At the same time, base salary per state worker has increased from $45,108 in 2001 to $60,034 in 2011. Those numbers aren’t adjusted for inflation.
“State employee compensation has increased substantially due to the rising costs of insurance and the pension funds,” Hohman said. “Whatever they have given up has only slowed the rapid increase of employment costs.”
Robert McCann, communications director for the Michigan Senate Democrats, didn’t return an email seeking comment.
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A just-released Harris survey of small business executives commissioned by the U.S. Chamber of Commerce found that 74 percent say “the recent health care law makes it harder for their business to hire more employees.”
The survey contacted 1,322 individuals who hold an executive level position in a company with fewer than 500 employees and annual revenue less than $25M. It has a sampling error rate of plus-or-minus 2.5 percentage points.
Charles Owens, Michigan state director of the National Federation of Independent Business, told CapCon, "The study confirms what our members have been telling us; it’s sad that this president cannot connect the dots between his anti-employer initiatives and the resulting glacial pace of new job creation."
On to the Senate to see if Indiana will become the 23 Right to Work State Click Here for Details
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Michigan’s major government pension funds are underfunded and will require billions for the foreseeable future just to begin catching up. But some argue that multiple years of solid investment growth will eliminate this problem. While nothing would alleviate pension problems like a few years of solid returns, it is unlikely that such sufficient growth will occur.
A report from consultants R.V. Kuhns and Associates looks at the possibility that the state will return to full funding with investment growth. Currently, the state assumes that it will get an 8 percent return on the money it sets aside to pay for pensions (though a small percentage of the teachers' fund assumes a 7 percent return). The state, however, has received on average 5.5 percent to 5.7 percent since 1997. This is one of the main reasons why the state government's pension system for public school employees is underfunded by $17.6 billion. In order to catch up on liabilities, the report shows that returns would need to average 11.7 percent to 12.7 percent for the next decade.
The report also uses a series of assumptions about investment performance. Only under the rosiest of scenarios will the funds return to full strength by 2020, a “75th percentile” event (see report for more details).
The state can ensure that it has enough money to pay for retirement benefits already earned by closing its pension fund to new members. This contains the increase in unfunded liabilities while offering new employees affordable retirement benefits.
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Click Here for Details On Brazil Oil Financing
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INDIANAPOLIS — Indiana's right-to-work legislation stayed put today as the Democrats stalled for time and Republicans huddled to decide their next move.
This morning's scheduled House session did not take place, as the Democrats pulled a work stoppage for the fifth time this year. A quorum of at least two-thirds of the 100-member House is required to hold a session. Although the House Republicans hold a 60-40 majority, they can't start a session without at least seven Democrats being present.
At issue is whether or not Indiana will become the nation's 23rd right-to-work state. Under the legislation (House Bill 1001), companies and unions would be prohibited from negotiating contracts requiring employees to join unions and requirements that non-union employees pay union dues would be banned.
The latest line from the Indiana House Democrats is that they're not boycotting the House sessions, just the bill. They're claiming they need more time to prepare their referendum amendment.
The referendum amendment was one of 44 amendments the Democrats were expected to try to get attached to the bill in a scheduled debate on Tuesday. Just before the debate was supposed to take place, however, the Democrats bolted and the session came to a halt.
According to the nonpartisan Legislative Services Agency that serves the Indiana General Assembly, the Democrats' original version of the referendum amendment included violations of the Indiana Constitution.
House Speaker Brian Bosma, R-Indianapolis, has said the state's $1,000 per-day fines would be put into effect today if the Democrats failed to show up for the House session. House Democratic Leader B. Patrick Bauer, however, has told his colleagues and the news media that the fines can't be enforced.
A commonly reported context for the stalling tactics used by the Democrats is that they are trying to delay the issue until the Super Bowl, which takes place Feb. 5 in Indianapolis. In addition, it appears that a growing portion of the Indiana news media is reporting on the RTW battle with skepticism about the motives on both sides of the aisle.
Salem Township won't require its employees to pay anything for their health plans Click Here for Details
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Suttons Bay School district is small in size — but big on innovation.
This school district in northwest Michigan probably doesn't get much attention outside of Traverse City. That's unfortunate, because it is blazing a trail in education innovation through digital learning.
Superintendent Michael Murray says the district aims to shape school to fit the student, not the other way around — which, unfortunately, is how many schools have operated for decades. With digital learning, Suttons Bay is personalizing the learning experience for each student and in the process providing a wide variety of choices for all.
See the video below for more details:
A real problem for sunken ship's captain Click Here for Detailsand Audio
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A Department of Education report that said 48 school districts posted deficits in 2010-2011 is being used to blame Gov. Rick Snyder and the Legislature for cuts that are part of the state's 2011-2012 budget.
Michael Van Beek, director of education policy at the Mackinac Center for Public Policy, said Gov. Snyder’s cuts weren't in place at the time the districts were in the red, and that these districts were spending more than they were taking in before Gov. Snyder took office.
The article states: “The move comes after school districts absorbed cuts in state aid, with the minimum per-student grant dropping from $7,316 to $6,846 — which union leaders said is the main reason.”
Van Beek said it will not be possible to measure the impact of budget cuts on school district deficits until after the 2011-2012 fiscal year ends, which is June 30, 2012.
“Blaming Gov. Snyder and the Legislature for these budget deficits aligns nicely with the narrative the MEA would like to push on the public, but unfortunately for them, the data don’t justify their claims,” Van Beek wrote in an email. “Many of these school districts were overspending long before Gov. Snyder took office, with two-thirds of them operating in the red for at least three years.”
Thirty-eight of the districts had been in the red for more than one year and 16 of the districts had been outspending revenue for five or more years.
The Grand Rapids Press quoted a union official who blamed Snyder’s cuts for the deficits.
“What did the Legislature expect would happen when it cut $1 billion in school aid?” said Doug Pratt, the Michigan Education Association's public affairs director.
“I'm surprised there aren't more districts on the list, since so many were struggling because of declining enrollment and other things even before Gov. Snyder took money away to give businesses a $1.8 billion tax cut. And the reason there aren't more is because employees have given so much back through concessions.”
Grand Rapids Press Reporter Dave Murray, Grand Rapids Press Editor Paul Keep and the MEA’s Doug Pratt didn’t respond to emails seeking comment.
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Drivers are paying more at the pump than they have in any other January. While there are several reasons for the high prices, including increasing demand from developing countries and Iranian saber rattling, the federal government is doing its part to keep gasoline prices high by mandating the impossible.
According to The New York Times, companies that supply motor fuel paid $6.8 million in fines in 2011 for not using enough cellulosic derived biofuel in gasoline. The companies will face even steeper fines in 2012 when the congressional mandate to use cellulosic biofuels goes up from 6.6 million gallons to 8.65 million gallons. Companies could avoid paying the fines except for one thing — cellulosic biofuels only exist in small quantities in laboratories and are not commercially available.
There may be little sympathy for fuel companies from the motoring public, but the fines levied by the Environmental Protection Agency will invariably be passed on to motorists through higher gasoline prices. When federal lawmakers mandate the technically impossible and fine fuel companies for not complying, they are in effect levying a tax on gasoline.
It is not surprising that mistrust of the government is running high and polls show Congressional approval is in single digits when the political class abandons common sense and logic and adopts environmental ideology. No amount of wishful thinking on their part can change the realities of science and economics. Cellulosic biofuels may someday be able to compete in the marketplace, but it will be due to technical innovation and not unrealistic federal mandates.
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A little more than 74,000 people in Michigan exhausted their state unemployment benefits through the first 11 months of 2011. That still left about 232,000 receiving unemployment benefits through the end of November, the most recent data the state has released.
How long unemployed workers should receive benefits has been a hot topic. Michigan’s unemployed have had the opportunity to receive benefits up to 99 weeks via 26 weeks of state benefits and a combination of federal extensions.
Michigan recently reduced the number of weeks someone can claim state unemployment benefits from 26 weeks to 20 weeks before the federal extensions would kick in. For those newly unemployed as of Jan. 15, 2012, they will be eligible for up to 20 weeks of benefits, according to the state.
Michigan’s unemployment insurance is paid in full by employer-financed payroll taxes.
Charles Owens, state director of the National Federation of Independent Business, said that the original intent of the law was to provide people some assistance until they could find another job. Owens argues that unemployment benefits are now becoming an entitlement program.
“The longer you extend benefits, the more you deviate from the intent of the law,” Owens said. “The idea was folks would be out looking for a job and this would tide them over.”
Owens said in a tough economy, there would be some people who need extended time to find a job.
“But there are a lot of people who adjusted their lifestyle to survive on this benefit,” Owens said.
Owens said that members of the NFIB have reported that some job applicants said they could start work, but not until their unemployment benefits ran out.
Matthew Mitchell, a senior research fellow at the Mercatus Center at George Mason University, said that unemployment insurance decreases the incentive to look for another job.
“Absent the generous unemployment benefits, people will be willing to be underemployed,” Mitchell said.
Or, in sum, people respond to incentives.
Once state benefits are exhausted, unemployed workers are still eligible for benefits allowed by the federal government.
The federal Emergency Unemployment Compensation (EUC) program provides up to 53 weeks of unemployment benefits to workers who depleted their state unemployment benefits. The EUC program is scheduled to stop accepting applications on March 10, the same date the Extended Benefits program is scheduled to end, according to the state of Michigan.
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