Legislature Should Cut Corrections Costs to Save State Money

In the last ten years, Michigan’s per capita income has fallen from 19^th to 38^th, our population growth has been stagnant, and state revenues have declined some 30%.  We continue to be plagued by high unemployment and our tax system is uncompetitive for attracting and retaining jobs.

Our state leaders did not create the current economic crisis, and the options for solving the crisis represent admittedly difficult choices.  But the choices aren’t getting any easier.  The State Fiscal Agencies have identified a $300 million gap in the current year budget; the FY 2011 budget deficit could grow by an additional $500 million with the loss of federal Medicaid assistance; and, looking out to Fiscal Year 2012, the federal American Recovery and Reinvestment Act (stimulus) dollars will go away, adding another $1 billion to the deficit.

The proposed solutions we are hearing from our leaders are more cuts to our communities and universities – two areas that job providers consider critical for future growth.  In the last ten years state spending for our communities and universities has been cut 34% and 17% respectively.  During the same time, spending on corrections has increased 27%, giving Michigan a per prisoner incarceration cost that is 30% higher than the average of surrounding states.  Rather than making further cuts to areas that aid job creation, the Legislature should look for savings by bringing corrections spending in line with the region.

A Big Win! – Teacher Retirement Legislation Passes Legislature

While not perfect, legislation passed and has been signed by the Governor that will save taxpayers money by offering school teachers a modest early retirement bonus, enable top young teachers to find jobs in our state, and bring teacher health care premiums and retirement benefits more in line with that of other states. First year savings are pegged by the House and Senate Fiscal Agencies at $679 million. Click here to read an op-ed written by Doug Rothwell explaining why this is a big step forward for our state.

Legislative Action Alert: Bring State Corrections Spending Under Control

When the Michigan Legislature returns from recess on April 13, they will continue deliberations on the state’s FY 2011 budget, including Corrections.  Business Leaders for Michigan urges our state leaders to pass a budget that reduces Michigan’s annual per prisoner incarceration costs from over $32,000 to $25,000, the average for surrounding states.

Michigan is smaller and poorer today than it was in past decades and cannot support the same level of state spending it once did.   Please take a moment to contact your legislators to let them know that we can’t continue to spend money we don’t have and to bring corrections spending under control now. This would amount to roughly $350 million in savings for the state.

2010 Legislative Agenda

Two weeks ago, we announced our 2010 Legislative Agenda, which reflects the first phase of legislation necessary to implement the Michigan Turnaround Plan. These policy items begin to implement the first three steps of the Michigan Turnaround Plan – seen as the building blocks for the investment and economic development strategies that follow. 

Some of these goals may take longer to achieve, but Business Leaders for Michigan is committed to getting the legislative and policymaking dialogue process underway now. 

With Michigan’s 2011 deficit at almost $2 billion and growing through 2014, we believe structural budget reforms, like some of the items in our Legislative Agenda as well as others, must be passed and implemented as soon as possible.  We recognize that some of the needed legislation will draw robust debate, but we must find solutions to these difficult issues if we want to see our state turnaround.  This agenda is a framework. We will support these and other proposed solutions that support the Michigan Turnaround Plan.

Detroit News Continuing series: Ways to make Michigan better

The Detroit News' editorial board is highlighting ideas from various groups to promote discussion on reform and restructuring government and the economy..."50 Ways to Fix Michigan." Business Leaders of Michigan is a contributor to the series.  Take a look at some of the ideas we've submitted so far from our Michigan Turnaround Plan. Share these ideas with others to keep the dialogue going.

50 ideas to fix Michigan

Idea 7: Reduce Michigan Department of Corrections costs by enacting management and sentencing reforms.  - 9/29/09

Idea 6: Reduce state employee compensation to the average compensation of state workers in the nation or the average of Michigan private-sector workers.

Idea 2: Eliminate binding arbitration for municipal police and fire workers.