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By Jack McHugh
The backers of the "Reform Michigan Government Now!" initiative claim it would "streamline Michigan government." Spokesperson Dianne Byrum says, "What we are doing, we're having less government, less bureaucracy ..." The treasurer of the official ballot committee says it would "give us a smaller ... government." The word "downsize" appears frequently in news coverage of the measure.
Just how much "downsizing" and savings would Michigan really get with the proposal? In the executive branch of government the proposed changes are all organizational and procedural, but some spending reductions would come in the legislative and judicial branches.
Under the initiative there would be 38 fewer legislators — a reduction of 28 in the House and 10 in the Senate. At the proposed new salary of $57,000 for each remaining legislator, plus a $10,000 expense allowance, those empty seats would save $2.5 million annually. Cutting the pay of the remaining 110 legislators would save another $2.8 million. The measure does not require a reduction in the Legislature’s overall budget, however, so it’s unlikely that all the staffers and other resources employed by those 38 lawmakers would be eliminated. If half those expenses were actually returned to the treasury it would save around $2.6 million. All told these legislative savings would be around $7.9 million annually.
The provision on legislative retirement benefits limits these to "the highest benefit payable" to retired civil service employees for future lawmakers only. This is unlikely to make much, if any, difference in spending. Legislators currently get a 401(k) contribution but no pension, and their retiree health benefits probably do not exceed the proposed cap by much, if anything.
In the judicial branch the initiative would eliminate two Supreme Court justices at $165,000 each. Throw in the cost of their benefits and various payroll taxes, and the total savings probably approach $400,000 annually.
Seven Appeals Court judges would be eliminated. At $151,500 each that comes to $1,060,500 in savings. Round that up to $1.3 million to reflect other payroll expense savings. But then there are those 10 new circuit court judges at a proposed rate of $117,531 each. With bennies and payroll taxes these would add around $1.3 million in new expenses, canceling out the Appeals Court savings.
Michigan employs some 582 district, probate and circuit court judges who are paid either $138,272 (district) or $139,919 (circuit and probate). The savings from the proposed 15 percent reduction in their pay would be approximately $12.1 million, and the pay cuts to remaining Appeals and Supreme Court members would add another $600,000 to that. The combined annual savings from compensation and membership changes at all levels of the judiciary would be $13.1 million.
The total savings from all these legislative and judiciary changes would be approximately $21 million annually. Michigan’s state budget for the current fiscal year is $42.9 billion. So the potential savings come to 0.049 percent of the budget, or a bit less than of five-hundredths of 1 percent. The reduction in state government’s approximately 56,000-member workforce would be 0.07 percent — seven-hundredths of 1 percent. This "downsizing" would be less than 5 percent of just the increase in next year’s Department of Community Health budget.
How about "streamlining" in the executive branch of government? The initiative would cap the number of "boards and commissions" at no more than 200. No one is sure yet how many of these exist currently, but aside from modest per-diems when they actually meet, their members don’t get paid, so there’s no significant savings here.
RMGN would also reduce the maximum number of state departments from 20 to 18. Departments are often merged or split up, and functions within them are constantly shifted around. These rearrangements never involve actual reductions in the number of government employees, and nothing in the initiative requires that. So this provision basically amounts to cosmetic reshuffling.
In sum, while the proposal takes comparatively significant bites from the judicial and legislative arms of state government, the executive branch gets off scot-free. However, the executive is where the real money is, which is why big changes in the other two branches make so little difference in overall government spending.
The bottom line is that at most RMGN would save each Michigan resident just 4 pennies a week. Even if one ignores recently revealed insider documents explaining that the measure’s real purpose is to prevent future "budget cuts," these savings amount to little more than a rounding error in the $42.9 billion state budget — a spending reduction of less than one-twentieth of 1 percent.
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Jack McHugh is senior legislative analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.
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