Legislative Commission on Government Reform Releases Recommendations for Schools & Govt

The Legislative Commission on Government Reform released its report to the state legislature this week which recommends cost savings measures for schools and government, per a Michigan Radio report.

The Commission's members include Mitch Bean, Director of House Fiscal Agency, and Gary Olson Director of Senate Fiscal Agency. It is chaired by James Patrick Curran from Karoub Associates, a firm which according to their web site specializes in "Legislative Consultants: Government Affairs". (I am personally not familiar with Mr. Curran or his firm.)

Some of the findings of the study that relate to K-12 include:

K-12

• Re-allocate $300 million of School Aid Fund to community college funding in order to
realize General Fund savings to be phased in over three years
• Offset a portion of this reduction in state aid to schools by creating local savings by
offering $5,000 state cash retirement incentives to be matched by local school districts
and phased in over a three year period for school employees already eligible to retire;
with a goal of inducing 10,000 employees to retire would cost the state $50 million per
year but districts would save as much as $30,000 per year and perhaps more if they
chose not to replace those employees
• Achieve further cost reductions at the school district level through consolidation
- Allowing the State Superintendent the option of requiring consolidation of school
districts or ISDs if savings of at least 5% can be shown
- Providing a monetary incentive to ISDs that continue to consolidate non-instructional
services among ISDs and school districts beyond what was reported to the DOE as
required in PA 63 of 2007

Higher Ed
• Recommend the elimination or the restructuring of the Michigan Promise Grant Program.
This is the only major financial aid program whose eligibility is not based on financial
need.

Health Care Costs
• Consider the option of conditioning a portion of the revenue sharing payments to units of
local government, aid to K-12 school districts, and aid to public universities and
community colleges on these governmental entities (a) requiring that their employees
are charged a premium for their employee health benefits at least the same premium
level State Civil Service employees are charged for health insurance; and (b) offering
benefit packages no richer than those offered to State Civil Service employees.
• Conduct a complete review of the structure of public health plans in Michigan. This
would include plan design and other issues such as employee incentives for healthy
behavior.
• Consider ways to pre-fund retiree health benefits, including the option of selling bonds to
finance the long-term cost of retired employee health benefits.

Other Recommendations That Should Be Considered
• Implement a Pay-Go System in the Michigan Budget Process
The State should consider implementing, by State law, a Pay-Go system of budgeting. A
Pay-Go budgeting system would require the Governor and the Legislature to identify the
funding sources for new programs or expansion of existing programs, or to identify
spending reductions to pay for any proposed tax policy changes. Such a Pay-Go
system, patterned after systems used periodically by the Federal government, would
bring spending and revenue discipline to the State budget and should lessen the
occurrence of budget shortfalls resulting from program increases or tax reductions
without a specific funding source.


The full report can be found at:

http://council.legislature.mi.gov/files/lcge/summary_potential_recommendations.pdf