LANSING -- Michigan State University economics Professor Charles Ballard dispelled the myths that the public employee system in Michigan is bloated and that state workers are overpaid and have Cadillac health care benefits.
Ballard recently conducted a comprehensive study on the wages and benefits of state employees on behalf of the unions representing state employees, and he testified on Tuesday before the 13-member House Public Employee Health Care Reform Committee assigned to examine House Speaker Andy Dillon’s, D-Redford, plan to pool all public employees in state, including public school teachers. Dillon claims it will save the state up to $900 million a year.
The first myth he dispelled is that the system is bloated. The fact is state employees are dong more with less.
“We have a reduction of 11,000 workers, which is a reduction of 18 percent since 2001,” Ballard said.
Ballard earned his Ph.D. from Stanford University, and he has been on the faculty at MSU since 1983. He has served as a consultant with the U.S. Departments of Agriculture, Health & Human Services, Treasury and with research institutes in Australia, Denmark, and Finland. He is the author of two books, “Michigan at the Millennium” and “Michigan’s Economic Future.”
Ballard said state employees earn less than those in the private sector, especially those state workers with advanced degrees.
“As the skill level goes up, when you are talking about engineers and attorneys, public employees earn significantly less,” he said.
Ballard also dispelled the myth that state workers get Cadillac health care befits. The fact is they pay higher than average costs for their health care benefits. In fact, most state workers and their families have seen their health care costs double in the last couple of years.
“What I emphasize is that they are not as good as they once were,” he said. “They have made significant give backs.”
Ballard, who has spent more than 20 years looking at Michigan’s tax and budget process, said the tax revenue system is outdated. He said raising taxes made headlines in 2007, but the next day taxes were cut that didn’t make headlines.
“Our tax revenue system is broken,” he said. “To try and fix the budget with just spending cuts is irrational and draconian.”
